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As filed with the Securities and Exchange Commission on June 4, 2002
                                               Registration No. 333-87106







SECURITIES AND EXCHANGE COMMISSION

FORM S-4/A
                  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

---

ACTIONPOINT, INC.

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|Delaware
                                   (State or other jurisdiction
                                  of incorporation or organization) | 7372
                                  (Primary standard industrial
                                  Classification code number) | 77-0104275
                                  (I.R.S. employer
                                  Identification no.)
|-------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------

__________________

1299 Parkmoor Avenue
                      San Jose, CA 95126
                         (408) 325-3800

(Address, including zip code, and
telephone number, including area code, of Registrant's principal executive
offices)

__________________

Stephen S. Francis
                  President and Chief Executive Officer
                  ActionPoint, Inc.
                   1299 Parkmoor Avenue
                  San Jose, CA 95126
                  (408) 325-3800

(Name, address, including zip code, and
telephone number, including area code, of agent for service)

__________________

Copies to:

|Jay K. Hachigian, Esq.
                  Christopher D. Dillon, Esq.
                  Gunderson Dettmer Stough Villeneuve
                   Franklin & Hachigian, LLP
                         610 Lincoln Street
                  Waltham, Massachusetts 02451
                  (781) 890-8800 | Lance W. Bridges, Esq.
                  Deyan P. Spiridonov, Esq.
                  Cooley Godward LLP
                  4401 Eastgate Mall
                  San Diego, CA 92121-1909
                  (858) 550-6000
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

__________________

Approximate date of commencement of
the proposed sale to the public:

If the securities being registered on this form are being
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box.  

If this form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Securities Act"), check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.  

If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. 

__________________



The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act, or until this Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.



The information in this prospectus may be changed.  The
Registrant may not sell these securities until the Registration Statement filed
with the Securities and Exchange Commission is effective.  This prospectus is
not an offer to sell these securities and the Registrant is not soliciting
offers to buy these securities in any state where the offer or sale is not
permitted.









ActionPoint, Inc.
                  1299 Parkmoor Avenue
                  San Jose, California 95126

June        , 2002

Dear ActionPoint Stockholders:

I am pleased to include the notice and joint proxy statement/prospectus for
the 2002 annual meeting of the stockholders of ActionPoint, Inc. to be held at
ActionPoint's corporate headquarters at 1299 Parkmoor Avenue, San Jose,
California 95126 on July       , 2002 at
            a.m., local time.

This is a
very important annual meeting that affects your investment in ActionPoint.

At the meeting, you will be asked to consider and
vote upon a proposal to approve the issuance of shares of ActionPoint common
stock in connection with the merger of ActionPoint and Captiva Software
Corporation.  As a result of the merger, ActionPoint will issue, or be required
to issue in the future pursuant to warrants and options, up to approximately
6,639,873 shares of ActionPoint common stock in the aggregate to the holders of
Captiva stock, subordinated notes, warrants and options.  At the time of the
merger, up to approximately 4,374,873 of those shares will be issued by
ActionPoint in exchange for all of the outstanding Captiva common stock or will
be issuable by ActionPoint upon the exercise of warrants to acquire Captiva
common stock that will be assumed by ActionPoint in the merger and converted
into warrants to purchase ActionPoint common stock.  Additionally, following the
merger, up to 2,265,000 of the aggregate ActionPoint shares to be issued in the
merger will be issuable upon the exercise of the options to purchase Captiva
common stock that will be assumed by ActionPoint in the merger and converted
into options to purchase ActionPoint common stock.

In the merger, a wholly-owned subsidiary of ActionPoint will merge with
Captiva, Captiva will become a wholly-owned subsidiary of ActionPoint and
ActionPoint will change its name to Captiva Software Corporation.  Following the
merger, the current holders of Captiva stock, subordinated notes and warrants
will own or have the right to acquire up to approximately 49.9% of the
outstanding common stock of ActionPoint.

After careful consideration, your board of directors unanimously approved
this transaction and concluded that it is in the best interests of ActionPoint
and its stockholders.  Your board of directors unanimously recommends that you
vote FOR the issuance of shares of ActionPoint common stock pursuant to
the merger agreement.

At the 2002 annual meeting, you will also be asked to consider and vote
upon:

- the amendment to ActionPoint's certificate of incorporation changing
ActionPoint's name to Captiva Software Corporation if the merger is
completed;
- the election of ActionPoint's directors;
- the ratification of ActionPoint's independent public accountants;
- the amendment and restatement of ActionPoint's employee stock purchase
plan; and
- an amendment to ActionPoint's 1993 stock option/stock issuance plan.

Attached is a notice of the 2002 annual meeting of stockholders and a joint
proxy statement/prospectus relating to the merger and the other proposals to be
voted on at the meeting.  This document describes Captiva, ActionPoint and the
merger in detail.  We encourage you to read the entire document carefully.

The merger involves risks.  You should carefully consider the discussion in
the section entitled "Risk Factors" on page 20 of the attached joint
proxy statement/prospectus.

Whether or not you plan to attend the meeting, please complete, sign and date
the enclosed proxy and return it to us in the enclosed envelope.  We encourage
you to attend the annual meeting.  Your vote is very important regardless of
the number of shares you own.

Sincerely,

Stephen S. Francis
   President, Chief Executive Officer and Director

__________________

Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the ActionPoint common stock to be issued in the merger or determined
if this joint proxy statement/prospectus  is truthful or complete.  Any representation to the
contrary is a criminal offense.

__________________



This joint proxy statement/prospectus is dated June         , 2002
and is first being mailed to ActionPoint stockholders on or about June        , 2002.

---



Captiva Software Corporation
                  10145 Pacific Heights Blvd.
                  San Diego, CA 92121

June        , 2002

Dear Shareholders:

I am pleased to report that the boards of directors of Captiva Software
Corporation and ActionPoint, Inc. have unanimously approved a merger agreement,
which provides for the merger of a subsidiary of ActionPoint into Captiva.  If
we complete the merger, Captiva will become a wholly-owned subsidiary of
ActionPoint, you will become a shareholder of ActionPoint and your shares of
Captiva common stock will be converted into the right to receive shares of
ActionPoint common stock and cash in lieu of fractional shares of ActionPoint
common stock.
Assuming that immediately prior to the closing of the merger there are 4,374,874
shares of ActionPoint common stock outstanding and 280,228,624 shares of Captiva
common stock outstanding or issuable upon conversion of all Captiva promissory notes and
upon exercise of all Captiva warrants, each share of Captiva common stock issued and
outstanding immediately prior to the merger will be converted into the right to
receive 0.0156 shares of ActionPoint common stock.  If the merger is completed,
our current shareholders, subordinated noteholders and warrantholders
will own or have the right to acquire up to approximately 49.9% of the outstanding
common stock of ActionPoint immediately after the merger.

After careful consideration, our board of directors unanimously approved and
adopted the merger agreement, the merger and other actions on which you are
requested to vote in connection with the merger agreement.  Further, our board
of directors determined that the merger is in the best interests of our
shareholders and unanimously recommends that Captiva's common and preferred
shareholders vote "FOR" the merger, the principal terms of the merger
agreement, the amendment and restatement of Captiva's articles of incorporation,
the approval of the Captiva 2002 equity incentive plan and the amendment to
Captiva's amended and restated stock option/stock issuance plan, and that
Captiva's preferred shareholders also vote "FOR" the conversion of all
of the shares of Captiva preferred stock into shares of Captiva common
stock.

The proposed merger is more fully described in this joint proxy
statement/prospectus. ActionPoint's common stock is listed on The
Nasdaq National Market under the trading symbol "ACTP."  After the
merger, ActionPoint will be renamed Captiva Software Corporation, and its common
stock will be listed on The Nasdaq National Market under the trading symbol
"CPTV."

We are asking our shareholders to approve the merger, the principal terms of
the merger agreement, the amendment and restatement of Captiva's articles of
incorporation, the adoption of the Captiva 2002 equity incentive plan and the
amendment to Captiva's amended and restated stock option/stock issuance plan by
way of an action by written consent, which will have the same force and effect
as though taken at a meeting duly and validly noticed and held.  In addition, we
are asking our preferred shareholders to approve the conversion of all of the
shares of Captiva preferred stock into shares of Captiva common stock prior to
the merger.

Your vote is very important regardless of the number of shares you
own.  We cannot complete the proposed transaction unless the holders of a
majority of the outstanding shares of our common stock, voting as a separate
class, and the holders of a majority of the outstanding shares of our Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock, each voting separately as a
series, vote to approve the merger, the principal terms of the merger agreement
and the amendment and restatement of Captiva's articles of incorporation, and
the holders of a majority of the outstanding shares of preferred stock, voting
together as a single class, vote to convert all of the shares of Captiva
preferred stock into shares of Captiva common stock.  We would also like you to
approve the adoption of the Captiva 2002 equity incentive plan and the amendment
to Captiva's amended and restated stock option/stock issuance plan.  We
appreciate your consideration of these matters.

Please vote as soon as possible to make sure that your shares are
represented.  You may vote your shares by completing, signing, dating and
returning the enclosed Action by Written Consent as promptly as possible and, in
any event, no later than July         , 2002, in the enclosed postage prepaid
envelope.

Sincerely,

Reynolds C. Bish
President, Chief Executive Officer and
Director

---

ACTIONPOINT, INC.
                  1299 Parkmoor Avenue
                  San Jose, California 95126

NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON  JULY

To Our Stockholders:

You are cordially invited to attend the 2002 annual meeting of stockholders
of ActionPoint, Inc. that will be held at         a.m., local time, on
July         , 2002 at ActionPoint's corporate headquarters at 1299 Parkmoor Avenue, San
Jose, California 95126.  At this annual meeting, you will be asked to consider
and vote on the following proposals:

1. To approve the issuance of shares of ActionPoint common stock to the
stockholders of Captiva, the holders of all of the outstanding options and
warrants to purchase Captiva stock, which will be assumed by ActionPoint, and to
the holders of subordinated notes who elect to convert their notes to Captiva
common stock immediately prior to the merger in accordance with the merger
agreement.
2. To approve an amendment to ActionPoint's certificate of incorporation
changing ActionPoint's name to Captiva Software Corporation if the merger is
completed.
3. To elect Patrick Edsell, John Finegan, Stephen Francis, Kimra Hawley, Thomas
van Overbeek, Bruce Silver and Daniel Tompkins as directors of ActionPoint.
4. To ratify the appointment of PricewaterhouseCoopers LLP as the independent
public accountants for ActionPoint for 2002.
5. To approve the amendment and restatement of ActionPoint's employee stock
purchase plan.
6. To approve the amendment to ActionPoint's 1993 stock option/stock
issuance plan.
7. To transact such other business as may properly come before the annual
meeting or any adjournment or postponement thereof.

These proposals are more fully described in the joint proxy
statement/prospectus that accompanies this notice.  We encourage you to read the
joint proxy statement/prospectus carefully.

Your board
of directors has approved and adopted the merger agreement and the merger and
unanimously recommends that you vote FOR the issuance of shares of ActionPoint
common stock in connection with the merger and the other proposals included in
this notice.

Only ActionPoint stockholders of record at the close
of business on June 4, 2002 are entitled to notice of, and to vote
at, the 2002 annual meeting or any adjournment or postponement thereof.

Your vote
is important.  To ensure that your shares are represented at the 2002 annual
meeting, you are urged to complete, date and sign the enclosed proxy card and
mail it promptly in the postage-paid envelope provided.  We encourage you to do
this whether or not you plan to attend the 2002 annual meeting in person.  You
may revoke your proxy in the manner described in this joint proxy
statement/prospectus at any time before it has been voted at the 2002 annual
meeting.  It may be possible for you to vote in person at the 2002 annual
meeting even if you have returned a proxy.  Please review the joint proxy
statement/prospectus for more information.

By Order of the Board of Directors,

John Finegan
Secretary

---

The information in this joint proxy statement/prospectus is not complete and may be
changed.  We may not distribute ActionPoint common stock to Captiva stockholders pursuant
to the merger agreement until this registration statement on Form S-4 filed with the
Securities and Exchange Commission containing the joint proxy statement/prospectus
is effective.

REFERENCE TO ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates by reference important business and
financial information about ActionPoint from ActionPoint's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission on May 15, 2002, ActionPoint's annual
report for the year ended December 31, 2001, both of which are being delivered with this
joint proxy statement/prospectus, and ActionPoint's current report on Form 8-K, filed
with the Securities and Exchange Commission on March 20, 2002 and
from documents that are not included in or delivered with this joint proxy statement/prospectus.
  ActionPoint will furnish to you all other documents that it files with the Securities and
Exchange Commission pursuant to section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior
to ActionPoint's 2002 annual meeting.  Information not delivered with this joint proxy
statement/prospectus is available to you without charge upon your written or oral request.
You can obtain documents incorporated by reference in this joint
proxy statement/prospectus by requesting them in writing or by telephone from ActionPoint
at the following address and telephone number:

ActionPoint, Inc.
                 John Finegan, Corporate Secretary
                  1299 Parkmoor Avenue
                  San Jose, California 95126
                   (408) 325-3800

If you would like to request documents, please do so by              , 2002
in order to receive them before the 2002 annual meeting.

In addition, see "Where you Can Find More ActionPoint Information" on page 176 of this
joint proxy statement/prospectus.

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TABLE OF CONTENTS

Page



|QUESTIONS AND ANSWERS ABOUT THE MERGER	
1

SUMMARY	6
SELECTED HISTORICAL AND SELECTED UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION	16ActionPoint's Selected Historical Consolidated Financial
Information	17
Captiva's Selected Historical Consolidated Financial
Information	16
Selected Unaudited Pro Forma Condensed Combined Financial
Information of ActionPoint and Captiva
18
Comparative Historical and Pro Forma Per Share
Information	19

RISK FACTORS	20Risks Related to the Merger	
20
Risks Related to the Business of the Combined
Company	24CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS	31
MARKET PRICE AND DIVIDEND INFORMATION	
32ActionPoint Common Stock
32
Captiva Capital Stock	
32THE ACTIONPOINT ANNUAL MEETING	
34General	34
Purpose of Annual Meeting
34
ActionPoint Board of Directors' Recommendations	
34
Record Date and Voting35
Voting and Revocation of Proxies	36
Appraisal and Dissenters' Rights	37THE CAPTIVA ACTION BY WRITTEN CONSENT	38Matters to be Acted Upon by Written Consent	38
Board of Directors Recommendation	38
Record Date	38
Stockholders Entitled to Vote	38
Vote Required	39
Revocability of Action By Written Consent	39
Dissenters' Rights	39
Solicitation of Written Consents and Expenses	39THE MERGER	41Background of the Merger	41
Joint Reasons for the Merger	47
ActionPoint's Reasons for the Merger	47
Recommendation of the Board of Directors of
ActionPoint	49
Opinion of ActionPoint Financial Advisor	49
Interests of ActionPoint Financial Advisor	55
Captiva's Reasons for the Merger	56
Recommendation of the Board of Directors of Captiva	57
Interests of C.E. Unterberg, Towbin	57
Interests of Executive Officers and Directors of ActionPoint and
Captiva in the Merger	58
Accounting Treatment of the Merger	61
Form of Merger	61
Merger Consideration; Exchange Ratio	61
Effective Time of the Merger	62
Material United States Federal Income Tax
Considerations	62
Appraisal and Dissenters' Rights	65
Quotation on The Nasdaq National Market	67
Shares Eligible For Future Sale	67THE MERGER AGREEMENT	69General	69
Merger Consideration; Determination of the Exchange
Ratio	69
Treatment of Captiva Stock Options	71
Treatment of Captiva Warrants	71
Exchange of Shares	72
Appraisal and Dissenters' Rights	72
Representations and Warranties	72
Conduct Prior to the Effective Time	74
Limitations on Considering Other Takeover Proposals	76
Other Covenants	78
Conditions to Completion of the Merger	79
Termination	81
Termination Fee and Expense Reimbursement	82
Amendment and Waiver	83
Related Matters after the Merger	83OTHER AGREEMENTS	84Voting Agreements	84
Affiliate Agreements	85
Lock-Up Agreements	85
Employment Offer Letters	86
Severance Agreements	87
Amendment to Rights Agreement	88THE NOTE CONVERSION	89General	89
Background of the Note Conversion	89
Reasons for the Note Conversion	91
Fairness Opinion of Houlihan Lokey Howard and Zukin	92
Principal Terms of the Note Amendment	96
The Amended Senior Notes	96
The Amended Convertible Notes	97
Principal Terms of the Note Conversion Agreement	97ADOPTION OF CAPTIVA'S NEW OPTION PLAN, AMENDMENT OF CAPTIVA'S
AMENDED AND RESTATED STOCK OPTION/STOCK ISSUANCE PLAN AND REPRICING OF CAPTIVA
OPTIONS	99Assumption of Options by ActionPoint	99
The 2002 Equity Incentive Plan and the Amendment to the Amended
and Restated Stock Option/Stock Issuance Plan	99
Repricing of Existing Options	100
Accounting Charges Related to Assumption of Captiva
Options	100AMENDMENT TO CAPTIVA'S ARTICLES OF INCORPORATION	101Recommendation of the ActionPoint Board of
Directors	101AMENDMENT TO ACTIONPOINT'S CERTIFICATE OF
INCORPORATION	102Recommendation of the ActionPoint Board of
Directors	102INFORMATION CONCERNING ACTIONPOINT	103ActionPoint's Business	103
Board Meetings and Committees	103
Director Remuneration	103
Executive Compensation and Related Information for ActionPoint's
Executive Officers	104
Stock Options	105

Equity Compensation Plan Information	107

Compensation Committee Interlocks and Insider
Participation	108
Change in Control Arrangements and Employment
Contracts	108
Existing Severance Agreements	108
Report of ActionPoint's Compensation Committee	109
Comparison of ActionPoint Stockholder Return	111
Report of ActionPoint's Audit Committee	112
ActionPoint's Related-Party Transactions	113
Compliance with Section 16(a) of the Securities Exchange Act of
1934	114INFORMATION CONCERNING CAPTIVA	116Captiva's Business	116
Captiva Management's Discussion and Analysis of Financial
Conditions and Results of Operations	124
Director Remuneration	133
Executive Compensation and Related Information for Captiva's
Executive Officers	133
Stock Options	134
Option Exercises and Holdings	134
Change in Control Arrangements and Employment
Contracts	135
Captiva's Related-Party Transactions	135
Voting Securities	136INFORMATION CONCERNING THE COMBINED COMPANY	137Management of the Combined Company after the Merger	137
Management Integration and Retention after the
Merger	139
Equity Compensation Plans of the Combined Company	139UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION	140Unaudited Pro Forma Condensed Combined Balance Sheet as of
March 31, 2002	141
Unaudited Pro Forma Condensed Combined Statement of Operations
for the Three Months Ended March 31, 2002	142
Unaudited Pro Forma Condensed Combined Statement of Operations
for the Year Ended December 31, 2001	143
Notes To Unaudited Pro Forma Condensed Combined Financial
Statements	144SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF ACTIONPOINT PRIOR TO THE MERGER
	148
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
OF CAPTIVA PRIOR TO THE MERGER	150
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
OF THE COMBINED COMPANY FOLLOWING THE MERGER	154
DESCRIPTION OF ACTIONPOINT CAPITAL STOCK	157Common Stock	157
Preferred Stock	157
Anti-Takeover Effects of Certain Provisions of Delaware Law and
ActionPoint's Certificate of Incorporation and Bylaws	157
Limitation of Liability and Indemnification Matters	158
Transfer Agent and Registrar	158
Stockholder Rights Plan	159SELLING STOCKHOLDERS	160
COMPARISON OF RIGHTS OF HOLDERS OF CAPTIVA COMMON STOCK AND
ACTIONPOINT COMMON STOCK	165Limitation of Director Liability	165
Indemnification	166
Restrictions on Certain Business Combinations	166
Classification of Board of Directors	167
Size of Board of Directors	167
Cumulative Voting for Directors	167
Removal of Directors	167
Board of Directors Vacancies	168
Notice of Special Meetings of the Board of
Directors	168
Special Stockholder Meetings; Stockholder Action by Written
Consent	168
Amendment of Certificate or Articles of
Incorporation	169
Amendment of Bylaws	169
Stockholder Vote for Mergers and Other Corporate
Reorganizations	169
Appraisal and Dissenters' Rights in Mergers and
Reorganizations	170
Loans to Directors; Officers and Employees	170
Inspection of Stockholder Lists	170
Dividends	170
Interested Director Transactions	171
Notice of Board of Directors Nominations and Other Stockholder
Business-Annual Meetings	171
Notice of Board of Directors Nominations and Other Stockholder
Business-Special Meetings	172
Derivative Suits	172
Dissolution	172OTHER STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF ACTIONPOINT STOCKHOLDERS
	173Proposal to Elect Directors	
173
Proposal to Ratify the Selection of ActionPoint's Independent
Public Accountants	174
Proposal to Amend and Restate ActionPoint's Employee Stock
Purchase Plan	174
Proposal to Amend ActionPoint's Stock Option/Stock
Issuance Plan	176
Other Matters	181STOCKHOLDER PROPOSALS FOR ACTIONPOINT'S 2003 ANNUAL MEETING OF STOCKHOLDERS
	182
LEGAL MATTERS	182
EXPERTS	182
WHERE YOU CAN FIND MORE ACTIONPOINT INFORMATION	182
INDEX TO CAPTIVA FINANCIAL STATEMENTS	F-1
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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





ANNEXES

ANNEX A:  AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, AS AMENDED
   ANNEX B:  OPINION OF PACIFIC CREST SECURITIES INC.
   ANNEX C:  OPINION OF HOULIHAN LOKEY HOWARD AND ZUKIN
   ANNEX D:  CHAPTER 13 OF THE CALIFORNIA GENERAL CORPORATION LAW
   ANNEX E:  FORM OF VOTING AGREEMENT FOR ACTIONPOINT OFFICERS AND DIRECTORS
   ANNEX F:  FORM OF VOTING AGREEMENT FOR CAPTIVA OFFICERS, DIRECTORS AND AFFILIATED STOCKHOLDERS
   ANNEX G:  FORM OF AFFILIATE AGREEMENT
   ANNEX H:  FORMS OF LOCK-UP AGREEMENTS FOR ACTIONPOINT AND CAPTIVA AFFILIATES
   ANNEX I:  FORM OF NOTE AMENDMENT AGREEMENT AND FORMS OF SECOND AMENDED AND RESTATED SUBORDINATED
             CONVERTIBLE PROMISSORY NOTE AND AMENDED AND RESTATED SUBORDINATED CONVERTIBLE PROMISSORY NOTE
   ANNEX J:  FORM OF NOTE CONVERSION AGREEMENT
   ANNEX K:  AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CAPTIVA
   ANNEX L: CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF ACTIONPOINT
   ANNEX M: CAPTIVA 2002 EQUITY INCENTIVE PLAN AND 1994 STOCK OPTION/ STOCK ISSUANCE PLAN AMENDMENT

---

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q:	Why are ActionPoint and Captiva proposing to merge?

A:	The merger will create a combined company that will be
a provider of a
complete information capture solution.  ActionPoint and Captiva believe that a
more complete solution will drive the combined company's market growth by better
satisfying user requirements.  ActionPoint's and Captiva's reasons for the
merger also include, among other reasons, the following:

- the merger may enhance the opportunity for the realization of the strategic
objective of the combined company to expand its market share and increase the
combined company's ability to compete effectively in the information capture
software market;
- the merger may provide the combined company with the opportunity to expand
its product offerings which could increase its global customer base to obtain
advantages and efficiencies in the marketing, selling and pricing of its
products and to achieve profitability;
- the merger may provide the opportunity for certain operational cost
efficiencies for the combined company;
- the combined company will have an experienced management team that has the
breadth and depth to effectively lead and manage the combined company's growth;
and
- the combined company's larger business and stockholder base may allow the
combined company to attract greater attention in the investment community than
either of ActionPoint or Captiva operating alone.

Q:	Who will own Captiva following the merger?

A:	If the merger is completed, Captiva will become a wholly-owned
subsidiary of ActionPoint and its assets and liabilities will remain intact.

Q:	What percentage of ActionPoint will Captiva stockholders and
subordinated noteholders own following the merger?

A:	The holders of Captiva's common stock immediately prior to the
merger will own up to approximately 49.9% of ActionPoint's common stock
following the merger.  The holders of Captiva's subordinated notes (also
referred to in this joint proxy statement/prospectus as the promissory notes),
who are expected to agree to convert their notes into common stock immediately
prior to the merger, will hold up to approximately 80% of Captiva's common stock
at that time and will, therefore, own up to approximately 40% of ActionPoint's
common stock following the merger.

Q:	What will happen to Captiva's assets and liabilities?

A:	As of March 31, 2002, Captiva had total assets equal to
approximately $6.8 million and total liabilities equal to approximately $12.1
million excluding Captiva's promissory notes in the principal amount of $8.1
million, which are expected to convert to Captiva common stock prior to the
merger.  In the event that up to approximately $2.0 million in principal amount
of the notes are not converted, the principal amount of those notes and any
accrued but unpaid interest will become an outstanding liability of the combined
company and will become due and payable in 2007.  At March 31, 2002,
Captiva's liabilities included approximately $4.5 million of deferred revenues
associated with software maintenance agreements and approximately $2.3 million
of bank debt that is expected to remain outstanding after the merger.

Q:	What is the makeup of the resulting entity and will it be a public
company?



A:	The combined company will be a public company and all of its
common stock, including the shares issued to

1

---



Q:	How is the transaction structured?



A:	ActionPoint has formed a wholly-owned subsidiary that will be
merged with and into Captiva.  When ActionPoint's subsidiary is merged with and
into Captiva, ActionPoint will then legally own Captiva, and ActionPoint will
change its name to Captiva Software Corporation.  In the merger, between 75% and
100% of Captiva's promissory notes will be converted into Captiva common stock,
all of Captiva's preferred stock will be converted into Captiva common stock and
then all of Captiva's common stockholders will receive shares of ActionPoint
common stock in exchange for their shares of Captiva common stock.  In the
merger, ActionPoint will also assume any outstanding options and warrants to
purchase Captiva stock.

Q:	Who will be the directors of the combined company following the
merger?

A:	After the merger, three members of ActionPoint's board of
directors, John Finegan, Thomas van Overbeek and Daniel Tompkins, will resign
and be replaced by three members of Captiva's board, Jim Berglund, Reynolds Bish
and Mel Lavitt.  ActionPoint's other four directors, Patrick Edsell, Stephen
Francis, Kimra Hawley and Bruce Silver, will remain on the board of directors of
the combined company.

Q:	Why are the ActionPoint stockholders being asked to re-elect
ActionPoint's current directors if they will not be the directors of the
combined company following the merger?

A:	ActionPoint's stockholders are being asked to approve the re-
election of ActionPoint's current directors in case the necessary approvals for
the merger are not obtained.  If the merger is not completed, the directors
elected at the ActionPoint 2002 annual meeting will continue as the directors of
ActionPoint until their resignation or the election of their successors.

Q:	Are there risks I should consider in deciding whether to vote for
the merger?

A:	Yes.  The merger of ActionPoint and Captiva involves a variety of
significant risks.  You should carefully consider the factors discussed in the
section entitled "Risk Factors" on page 20.

Q:	What do Captiva stockholders need to do now?

A:	Captiva isasking its stockholders to approve the merger,
the principal terms of the merger agreement, the amendment and restatement of
Captiva's articles of incorporation, the conversion of all of the shares of
Captiva preferred stock into shares of Captiva common stock, the adoption of the
Captiva 2002 equity incentive plan and the amendment to Captiva's amended and
restated stock option/stock issuance plan by way of an action by written
consent, which will have the same force and effect as though taken at a meeting
duly and validly noticed and held.  After carefully reading and considering the
information contained in this joint proxy statement/prospectus, please complete,
sign, date and return the enclosed action by written consent in the enclosed
postage-paid return envelope as soon as possible.

Q:	What do ActionPoint stockholders need to do now?

A:	ActionPoint is asking its stockholders to approve the issuance of
up to approximately 6,639,873 shares of ActionPoint common stock to Captiva's
stockholders, optionholders and warrantholders in connection with the merger.
After carefully reading and considering the information contained in this joint
proxy statement/prospectus, please complete and sign your proxy and return it in
the enclosed postage-paid return envelope as soon as possible so that your
shares may be represented and voted at the ActionPoint 2002 annual meeting.  If
you sign and send in your proxy and do not indicate how you want to vote,
ActionPoint will count your proxy as a vote for the proposal to approve the
issuance of shares of ActionPoint common stock in

2

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Q:	What rights do Captiva stockholders have if they oppose the merger?

A:	If you oppose the merger, you may seek appraisal of the fair
value of your shares of Captiva stock by complying with all of the California
law procedures explained in the section entitled "The Merger Agreement--
Appraisal and Dissenters' Rights" on page 72 and in Annex D.  Since
the procedures for perfecting appraisal rights are complicated, you are urged to
read Annex D in its entirety.

Q:	What rights do ActionPoint stockholders have if they oppose the
merger?

A:	If a majority of the ActionPoint stockholders casting votes at
the ActionPoint 2002 annual meeting vote to approve the issuance of shares of
ActionPoint common stock in connection with the merger, those ActionPoint
stockholders voting against the issuance of shares will have no recourse with
respect to such vote.  The ActionPoint stockholders have no appraisal rights or
dissenters' rights in connection with the approval of the share issuance.

Q:	What if the merger is not completed?

A:	It is possible the merger will not be completed.  This might
happen if, for example, Captiva's stockholders do not approve the merger, the
principal terms of the merger agreement, the amendment and restatement of
Captiva's articles of incorporation or the conversion of all of the shares of
Captiva preferred stock into shares of Captiva common stock, or ActionPoint's
stockholders do not approve the issuance of shares of ActionPoint common stock
in connection with the merger.  Should that occur, neither ActionPoint nor
Captiva is under any obligation to make or consider any alternative proposal
regarding the purchase of stock held by Captiva stockholders.  In certain
circumstances, either party may owe the other party a termination fee and
reimbursement of certain expenses.  For example, if the board of directors of
either party were to reverse its recommendation that its stockholders approve
the transaction and then that party were to enter into an agreement to complete
an alternative transaction, such party would pay the other party a termination
fee of up to $350,000.  For a discussion of each circumstance where termination
fees or expenses shall be paid, see the section entitled "The Merger
Agreement-Termination Fee and Expense Reimbursement" on page 82.

Q:	If my shares are held in `street name' by my broker, will my broker
vote my shares for me?

A:	Shares held in `street name' are shares held in brokerage
accounts or held by other nominees on a stockholder's behalf.  Your broker or
nominee will vote your shares only if you provide instructions on how to vote.
You should follow the directions provided by your broker or nominee regarding
how to instruct your broker to vote your shares.  If you do not instruct your
broker or nominee, your shares will not be voted.

Q:	Can ActionPoint stockholders change their votes after they have
mailed their signed proxies?

A:	Yes.  You can change your vote at any time before your proxy is
voted at the ActionPoint 2002 annual meeting.  If you hold your shares in your
own name, you can do this in one of three ways.  First, you can send a written
notice stating that you would like to revoke your proxy.  Second, you can
complete and submit a new proxy.  If you choose either of these two methods, you
must deliver your notice of revocation or your new proxy before the meeting to
the address set forth in the answer to the last question below.  Third,
stockholders can attend the meeting and vote in person.  If your shares are held
in `street name,' you should follow the directions provided by your broker or
nominee regarding how to change your vote.

3

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Q:	When and where will the 2002 annual meeting of ActionPoint's
stockholders be held?

A:	The ActionPoint annual meeting will be held on July        
, 2002 at                     a.m., local time at:

ActionPoint, Inc.
                  1299 Parkmoor Ave.
                  San Jose, CA 95126
                Telephone: (408) 325-3800
                 Fax: (408) 325-3800



Q:	Where do I return Captiva's action by written consent and by when?

A:	The completed and executed action by written consent must be
received by mail or fax no later than July        , 2002 at:

Captiva Software Corporation
                  10145 Pacific Heights Blvd.
                  San Diego, CA 92121
                  Attention:  Rick Russo
                  Telephone: (858) 320-1000
                  Fax: (858) 657-0889

Q:	Can Captiva stockholders change their votes after they have mailed
their signed action by written consent?

A:	Yes.  Captiva stockholders can change their votes at any time
before a sufficient number of written consents to take a corporate action have
been filed with Captiva's corporate secretary by delivering a signed written
revocation or a later-dated signed written consent to the address set forth in
the answer to the previous question.

Q:	When do you expect the merger to be completed?

A:	The transaction is anticipated to close early in the third quarter
of 2002, and no integration can begin until after the closing.  Prior to the
closing of the merger, the ActionPoint and Captiva leadership teams will work
closely together to plan the smooth integration of the two organizations.

Q:	Should Captiva stockholders send in their stock certificates
now?

A:	No.  After the merger is completed, Captiva stockholders will
receive written instructions for exchanging Captiva stock certificates.  Please
do not send in your stock certificates with your signed action by written
consent.

Q:	What do I do if I have questions?

A:	If you have any questions about the merger or if you need
additional copies of this joint proxy statement/prospectus and you are an
ActionPoint stockholder, you should contact:

ActionPoint, Inc.
                  1299 Parkmoor Ave.
                  San Jose, CA 95126
                  Attention:  John Finegan
                  (408) 325-3800

4

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If you have any questions about the merger or if you need additional copies
of this joint proxy statement/prospectus and you are a Captiva stockholder, you
should contact:

Captiva Software Corporation
                  10145 Pacific Heights Blvd.
                  San Diego, CA 92121
                  Attention:  Rick Russo
                  (858) 320-1000

5

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SUMMARY

This summary highlights selected information from this document and
may not contain all of the information that is important to you.  To understand
the merger fully and for a more complete description of the legal terms of the
merger, you should read carefully this entire document and the documents to
which you have been referred.  See "Where You Can Find More ActionPoint
Information" on page 182.  Page references have been provided
parenthetically to direct you to a more complete description of the topics in
this summary.

ActionPoint provided the information in this joint proxy
statement/prospectus about ActionPoint and Captiva provided the information in
this joint proxy statement/prospectus about Captiva.

The Companies (page 103 and page 116)

ActionPoint, Inc.
   1299 Parkmoor Ave.
   San Jose, California 95126
   (408) 325-3800

ActionPoint, Inc. develops, markets and services information capture
software.  Information capture software enables organizations to collect,
organize and input paper and fax-based information into their installed
computing systems, providing a critical bridge between the paper world and the
digital world.  The result is improved customer satisfaction, increased
productivity and cost control.  ActionPoint's customers have traditionally been
large global 1000 businesses and governmental agencies.  ActionPoint's
InputAccel family of information capture software helps automate the conversion
of paper and fax documents into electronic format thus allowing improved
operating efficiencies.  ActionPoint's customers use InputAccel to convert
transaction-related documents, such as order forms, claim forms, or loan
applications, into an appropriate electronic format and to transport images of
and information from these documents to storage on Web sites, compact disks, or
internal databases for subsequent search, retrieval or further processing.
Additionally, ActionPoint markets software tools under its Pixel Translations
brand to various hardware and software providers.

Captiva Software Corporation
   10145 Pacific Heights Blvd.
   San Diego, California 92121
   (858) 320-1000

Captiva Software Corporation is a provider of forms information
capture software and related services.  The company's products are used to
manage business critical information from paper, faxed and scanned forms and
documents, Internet forms and XML data streams into an enterprise in a more
accurate, timely and cost-effective manner. These products automate the
processing of billions of forms and documents annually, converting their
contents into information that is usable in database, document, content and
other information management systems.  Captiva's technology serves over 600
customers in the insurance, financial services, government, business process
outsourcing, direct marketing and other markets.

The Reasons for the Merger (pages 47 and 56)

The merger of ActionPoint and Captiva will create a combined company that
will be a
provider of a complete information capture solution.  ActionPoint and Captiva
believe that a more complete solution will drive the combined company's market
growth by better satisfying user requirements.  ActionPoint's and Captiva's
reasons for the merger, among other reasons, also include the following:

- the merger may enhance the opportunity for the realization of the strategic
objective of the combined company to expand its market share and increase the
combined company's ability to compete effectively in the information capture
software market;
- the merger may provide the combined company with the opportunity to expand
its product offerings which could increase its global customer base to obtain
advantages and efficiencies in the marketing, selling and pricing of its
products and to achieve profitability;
- the merger may provide the opportunity for certain operational cost
efficiencies for the combined company;
- the combined company will have an experienced management team that has the
breadth and depth to effectively lead and manage the combined company's growth;
and
- the combined company's larger business and stockholder base may allow the
combined company to attract greater attention in the investment community than
either of ActionPoint or Captiva operating alone.

The Merger and the Merger Agreement (pages 41 and 69)

ActionPoint and Captiva have entered into a merger agreement that
provides for the merger of Captiva and a wholly-owned subsidiary of ActionPoint.
As a result of the merger, Captiva will become a wholly-owned subsidiary of
ActionPoint.  Captiva stockholders, warrantholders and optionholders will
receive ActionPoint stock, warrants and options in exchange for their respective
Captiva stock, warrants and options.  At the effective time of the merger,
ActionPoint will be renamed Captiva Software Corporation.  The merger agreement,
as amended, is attached to this joint proxy statement/prospectus as
Annex A.  You are encouraged to read the entire merger agreement, as
it is the legal document that governs the merger.

ActionPoint Share Issuance Vote Required (page 35)

The issuance of shares of common stock by ActionPoint, in connection with
the merger, must be approved by the stockholders of ActionPoint holding a
majority of the shares voted at the ActionPoint 2002 annual meeting.

As of the record date, the executive officers and directors of ActionPoint
held  10.1% of the outstanding shares of ActionPoint common stock entitled to
vote on the share issuance proposal at the 2002 annual meeting.  Those executive
officers and directors have entered into voting agreements with Captiva in which
they agreed to vote their shares in favor of the share issuance.

Recommendation to ActionPoint Stockholders (page 34)

The ActionPoint board of directors believes that the terms of the merger
and the merger agreement are fair to, and in the best interests of, ActionPoint
and its stockholders and unanimously recommends that you vote FORthe
issuance of shares of ActionPoint common stock to the stockholders of Captiva
and the holders of all outstanding Captiva options and warrants, which will be
assumed by ActionPoint in accordance with the merger agreement.

Captiva Merger Vote Required (page 39)

The following Captiva stockholders must approve the merger agreement, the
merger and the amendment and restatement of Captiva's articles of incorporation
in order for Captiva to enter into the merger:

- the holders of a majority of the outstanding shares of Captiva common stock,
voting as a separate class; and
- the holders of a majority of the outstanding shares of Captiva's Series A
preferred stock, Series B preferred stock, Series C preferred stock, Series D
preferred stock and Series E preferred stock, each voting separately as a
series.

Prior to the merger, the holders of the majority of the outstanding shares of
Captiva's preferred stock, voting together as a single class on an as-if-
converted to common stock basis, must also approve the conversion of all of the
shares of Captiva preferred stock to shares of Captiva common stock.

As of the record date, the executive officers, directors and certain
stockholders and affiliates of Captiva held
            
  % of the outstanding shares of Captiva common stock,                 % of the
outstanding shares of Series A preferred stock,                   % of the outstanding shares
of Series B preferred stock,                   % of the outstanding shares of Series C
preferred stock,                  % of the outstanding shares of Series D preferred stock
and                  % of the outstanding shares of

7

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Recommendation to Captiva Stockholders (page 38)

The Captiva board of directors believes that the terms of the merger and
the merger agreement are advisable and fair to, and in the best interests of,
Captiva and its stockholders and unanimously recommends that you vote FORthe approval of the merger, the principal terms of the merger agreement, the
amendment and restatement of Captiva's articles of incorporation and the
conversion of all of the shares of Captiva preferred stock into shares of
Captiva common stock.  The board of directors of Captiva also unanimously
recommends that you vote FOR the approval of the Captiva 2002 equity
incentive plan and the amendment to Captiva's amended and restated stock
option/stock issuance plan.

What Will Holders of Captiva Stock Receive in the Merger?
(page 61)

Captiva has two series of subordinated notes outstanding in the
aggregate principal amount of approximately $8,087,877.  As required by the
merger agreement, the holders of the subordinated notes, also referred to in
this joint proxy statement/prospectus as Captiva's promissory notes, are being asked
to amend and convert their promissory notes into Captiva common stock immediately
prior to the merger. The merger agreement requires that all of Captiva's
promissory notes be amended and that at least 75% of the aggregate principal
amount of promissory notes be converted into common stock prior to the merger.  Any amended
promissory notes that are not converted into Captiva common stock will remain
outstanding after the merger.

The amended promissory notes will be convertible into shares of Captiva common stock
at a conversion price of approximately $0.03751 per share. Pursuant to the merger, the shares
of Captiva common stock received by noteholders upon conversion will be exchanged for shares of
ActionPoint common stock based on the exchange ratio of 0.0156 shares of ActionPoint common
stock for each share of Captiva common stock, which is calculated based on the
assumption that all of the amended promissory notes will be converted prior to the merger.
The following table illustrates the approximate value of the shares of ActionPoint common
stock that will be issued upon conversion of a promissory note of Captiva in the principal
amount of $1,000 pursuant to the merger assuming an ActionPoint common stock price of $2.03,
the closing price of ActionPoint common stock on the Nasdaq National Market as of May 31, 2002.

`Shares of Captiva Common      Shares of       Value of Shares of
                     Stock Received Upon     ActionPoint Common  ActionPoint Common
Principal Amount   Conversion of Note Prior     Stock Received   Stock Received in
   of Note             to the Merger            in the Merger      in the Merger
-----------------  ------------------------  -----------------   -------------------
       $1,000.00                    26,662                415               $842.45`

What Will Holders of Subordinated Notes Issued by Captiva Receive in the
Merger? (page 61)

The holders of subordinated notes issued by Captiva, also referred to in
this joint proxy statement/prospectus as Captiva's promissory notes, may receive
up to approximately 80% of the shares of ActionPoint common stock to be issued
in the merger and, therefore, own up to approximately 40% of ActionPoint's
outstanding common stock following the merger.  In connection with the merger,
the holders of Captiva's promissory notes are being asked to approve a note
amendment and enter into a note conversion agreement.  The note amendment
agreement will amend the outstanding promissory notes and entitle the promissory
noteholders to elect to convert their amended promissory notes into shares of
Captiva common stock by entering into the note conversion agreement.

8

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Although Captiva expects substantially all of the promissory noteholders to
elect to convert their amended promissory notes, the election of the holders of
only 75% of the aggregate outstanding principal amount under the notes is
required as a condition to the closing of the merger.  Any amended promissory
notes that are not converted into
Captiva common stock will remain outstanding after the
merger.  The fact that all of the amended promissory notes are not converted
prior to the merger will not affect the exchange ratio of approximately 0.0156
shares of ActionPoint common stock for each share of Captiva common stock, which
is calculated based on the assumption that all of the amended promissory notes
will be converted prior to the merger.

Are there Risks Related to the Merger? (page 20)

The merger of ActionPoint and Captiva involves a variety of significant risks.
These risks include, among others, the risk that the revenues of the combined company
may be adversely affected should any decline in the demand for either ActionPoint's or
Captiva's products occur, as the revenues of both ActionPoint and Captiva are heavily
derived from sales and services related to a limited group of products.
Currently, substantially all of ActionPoint's revenues are derived from sales of the
InputAccel product family, which in 2001 accounted for 72% of ActionPoint's total
revenues, and the Pixtools software tools, which in 2001 accounted for 28% of ActionPoint's
total revenues. Nearly all of Captiva's revenues are derived from sales and services
related to the FormWare family of software products. In 2001, software license revenues
accounted for 43% of Captiva's total revenues and services revenues accounted for 54%.
Other risks include:

- ActionPoint and Captiva may be unable to successfully integrate their respective
existing business operations;
- the merger could harm key third party relationships;
- the issuance of additional shares of ActionPoint common stock may reduce the combined
company's share price;
- the combined company may be unable to meet its future capital requirements;
- the combined company may be unable to compete successfully against current and potential
competitors; and
- the combined company may be unable to maintain its listing on The Nasdaq National Market.

Please see the section entitled "Risk Factors" beginning on page 20 for a more complete
discussion of the risks related to the merger.

Management and Directors of the Combined Company after the Merger
(page 137)

Following the merger, the management team for the combined company will
be significantly different from the current management team of ActionPoint.
Reynolds Bish, the chief executive officer of Captiva, and Rick Russo, the chief
financial officer of Captiva, will become the chief executive officer and chief
financial officer, respectively, of the combined company following the merger.
Stephen Francis and John Finegan, the current chief executive officer and chief
financial officer, respectively, of ActionPoint, will become the chief operating
officer and executive vice president of finance, respectively, of the combined
company.  Other Captiva executive officers will become executive officers of the
combined company and some of the current executive officers of ActionPoint will
serve as executive officers of the combined company in different capacities, or
not at all.

Also, three of the current seven directors of ActionPoint, John Finegan,
Daniel Tompkins and Thomas van Overbeek, will resign at the effective time of
the merger and be replaced by three of the current directors of Captiva, Jim
Berglund, Reynolds Bish and Mel Lavitt.

9

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Conditions to Completion of the Merger (page 79)

The completion of the merger depends upon a number of conditions being
met, including:

- the approval of the merger, the principal terms of the merger agreement, the
amendment and restatement of Captiva's articles of incorporation and the
conversion of all of the shares of Captiva preferred stock into shares of
Captiva common stock by the requisite vote of Captiva's stockholders;
- the approval of the share issuance by ActionPoint's stockholders;
- the approval for quotation on The Nasdaq National Market of the shares of
ActionPoint common stock to be issued in the merger;
- the agreement of the holders of a majority of the aggregate outstanding
principal amount under Captiva's promissory notes to amend the promissory notes
issued by Captiva;
- the election by the holders of at least 75% of the aggregate outstanding
principal amount under Captiva's promissory notes to convert their amended
promissory notes into shares of Captiva common stock;
- the change of ActionPoint's name to Captiva Software Corporation; and
- other customary contractual conditions specified in the merger
agreement.

No Solicitation of Alternative Transactions by ActionPoint or Captiva
(page 76)

With certain exceptions and subject to applicable fiduciary duties to the
respective stockholders of the ActionPoint and Captiva boards of directors to
recommend superior proposals to their stockholders, each of ActionPoint and
Captiva has agreed that neither it nor its representatives will (1) solicit,
initiate or encourage any proposal that might lead to an alternative
transaction, (2) enter into discussions or negotiations concerning, or provide
any non-public information to a third party relating to, an alternative
transaction or (3) agree to recommend an alternative transaction to their
stockholders.

Additionally, ActionPoint may comply with the Securities and Exchange
Commission's tender offer requirements with respect to an alternative
transaction.

Termination of the Merger Agreement (page 81)

ActionPoint and Captiva can mutually agree to terminate the merger
agreement without completing the merger, and either ActionPoint or Captiva can
terminate the merger agreement upon the occurrence of a number of events,
including:

- the other party breaches any material representation, warranty or covenant
in the merger agreement and fails to cure the breach within 30 days of receiving
notice of the breach;
- the merger is not completed by July 31, 2002;
- the other party's stockholders do not provide the necessary approvals at a
meeting of stockholders or by way of an action by written consent;
- ActionPoint's failure to hold a meeting of its stockholders or Captiva's
failure to distribute and collect action by written consents within 45 days
after the registration statement, which this joint proxy statement/prospectus is
a part of, is declared effective by the Securities and Exchange Commission;
- the other party's board of directors fails to recommend approval of the
merger agreement and the merger to its stockholders or withdraws or modifies its
recommendation;
- the other party's board of directors fails to reconfirm its recommendation
of the merger agreement and the merger to its stockholders within 5 business
days after being requested to do so;
- the other party's board of directors approves or recommends to its
stockholders an alternative transaction with a third party meeting the
requirements set forth in the merger agreement;
- the other party's board of directors fails to reject, or takes no position
with respect to, a third party acquisition offer within 10 days after the third
party offer is made; or
- the holders of less than 75% of the aggregate outstanding principal amount
under Captiva's promissory notes elect to convert their amended promissory notes
into Captiva common stock in accordance with the terms of the amended promissory
notes.

Termination Expenses (page 82)

Each of ActionPoint or Captiva must pay the other party its merger-
related expenses up to $250,000 if the merger agreement is terminated upon the
occurrence of a number of events, including:

- the other party breaches any material representation, warranty or covenant
in the merger agreement and fails to cure the breach within 30 days of receiving
notice of the breach;
- the other party's stockholders do not provide the necessary approvals at a
meeting of stockholders or by way of an action by written consent;
- ActionPoint's failure to hold a meeting of its stockholders or Captiva's
failure to distribute and collect action by written consents within 45 days
after the registration statement, which this joint proxy statement/prospectus is
a part of, is declared effective by the Securities and Exchange Commission;
- the other party's board of directors fails to recommend approval of the
merger agreement and the merger to its stockholders or withdraws or modifies its
recommendation;
- the other party's board of directors fails to reconfirm its recommendation
of the merger agreement and the merger to its stockholders within 5 business
days after being requested to do so;
- the other party's board of directors approves or recommends to its
stockholders an alternative transaction with a third party meeting the
requirements set forth in the merger agreement; or
- the other party's board of directors fails to reject, or takes no position
with respect to, a third party acquisition offer within 10 days after the offer
is made.

Captiva has also agreed to pay to ActionPoint up to $250,000 of ActionPoint's
merger expenses in the event either party terminates the merger agreement based
on Captiva's failure to obtain the conversion of at least 75% of
the aggregate
outstanding principal amount under Captiva's promissory notes in accordance with
the amended promissory notes.  Additionally, each of Captiva or ActionPoint will
be obligated to pay the other party an additional $100,000 if, within 4 months
of the termination of the merger agreement for specified reasons, either party
enters into an agreement to complete an alternative transaction.  The merger-
related expenses of each of Captiva and ActionPoint will exceed $350,000.  Each
of Captiva and ActionPoint will otherwise pay its own legal, accounting and
investment banking fees and other expenses related to the merger.

Interests of Executive Officers and Directors of
ActionPoint and Captiva in the Merger (page 58)

When considering the recommendations of the ActionPoint and Captiva
boards of directors, you should be aware that some directors and executive
officers of ActionPoint and Captiva have interests in the merger that are
different from, or in addition to, other ActionPoint and Captiva stockholders.
These include, among other interests:

- some ActionPoint and Captiva executive officers will receive retention and
severance benefits;
- several ActionPoint directors are currently beneficial owners of approximately 4.1%
of Captiva's capital stock;
- a Captiva director beneficially owns less than 1% of ActionPoint's common
stock;
- options to purchase up to 4,945,000 shares of Captiva common stock, pursuant
to Captiva's stock option plans, that are held by Captiva executive officers and
directors will have the benefit of fully accelerated vesting and reduced or
waived exercise prices;
- certain Captiva directors are affiliates of entities that own Captiva
promissory notes and will beneficially own approximately 48.7% of the shares of
Captiva's outstanding common stock immediately prior to the merger as a result
of the conversion of the promissory notes;
- in connection with the merger, Captiva executive officers have received
options to purchase approximately 79,106,834 shares of Captiva common stock
which will convert into options to purchase approximately 1,235,000 shares of
ActionPoint common stock in the merger;
- a Captiva director represents an investment bank, which will be paid
compensation for financial advisory and investment banking services related to
the merger;
- an Actionpoint director also serves as a director and chief executive
officer of a company that has as one of its principal investors a limited
partnership that is affiliated with an investor that will beneficially own
6.6% of Captiva's common stock immediately prior to the merger; and
- Captiva officers and directors have customary rights to indemnification
against specified liabilities.

The boards of directors of ActionPoint and Captiva were aware of these
interests and took them into consideration when they considered the fairness of
the merger.  Based on these interests, the board of directors of ActionPoint
formed a special committee of disinterested and independent directors to review
the proposed merger and actions related to the merger and to recommend
appropriate action for ActionPoint to take.  The board of directors of Captiva
formed a special committee to review the terms of the proposed note amendment in
the context of the merger and recommended appropriate action for Captiva to
take.

Opinion of ActionPoint Financial Advisor (page 49)

In deciding to approve the merger and actions related to the merger,
ActionPoint's board of directors and its special committee considered an opinion
from its financial advisors, Pacific Crest Securities Inc., that, from a
financial point of view, the exchange ratio is fair to the holders of
ActionPoint common stock.  The full text of this
opinion is attached to this
joint proxy statement/prospectus as Annex Band should be read carefully.
Pacific Crest Securities' opinion is directed to ActionPoint's board of
directors and the board's special committee and does not constitute a
recommendation as to how any holder of ActionPoint common stock should vote on
any matter relating to the merger.

Effect of the Merger on Liquidity of Captiva (page 124)

Captiva's outstanding promissory notes and bank credit line become due in 2002.
If the merger does not occur, Captiva's ability to continue as a going concern may be
jeopardized by these maturing debt obligations. Captiva's independent accountants
included an explanatory paragraph regarding this matter in their report on the consolidated
financial statements at December 31, 2001 and for the years then ended.

If the merger is consummated, at least 75% of the promissory notes will have
been converted to Captiva common stock.  Any notes that remain outstanding after the
merger will not become due until 2007, and the bank credit line will be renegotiated
or paid in full.  The combined company will be run as a single consolidated business and
will have adequate capital to cover Captiva's debt obligations.

12

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Interests of ActionPoint's Financial Advisor (page 55)

Pursuant to the terms of Pacific Crest Securities' engagement letter with
ActionPoint, ActionPoint has paid Pacific Crest Securities $150,000 for services
rendered in connection with the delivery of its fairness opinion and agreed to
pay Pacific Crest Securities an additional fee of $200,000, payable in cash upon
the closing of the merger, for its financial advisory services in connection
with the merger to the special committee.

Opinion of Captiva Financial Advisor to the Special
Committee (page 92)

In deciding to approve the merger and actions related to the merger,
Captiva's board of directors and special committee considered an opinion from
its financial advisors, Houlihan Lokey Howard and Zukin (Houlihan Lokey), that,
from a financial point of view, the ratio for the conversion of Captiva's
promissory notes into Captiva common stock is fair to the stockholders of
Captiva who are not holders of the promissory notes.  The full text of this
opinion is attached to this joint proxy statement/prospectus as Annex C
and should be read carefully.Houlihan Lokey's opinion is directed to
the special committee of Captiva's board of directors and does not constitute a
recommendation as to how any Captiva stockholder should vote on any matter
relating to the merger.

Interests of Captiva's Financial Advisor to the Special
Committee (page 95)

Pursuant to the terms of Houlihan Lokey's engagement letter with Captiva,
Captiva will pay Houlihan Lokey $75,000 and reasonable out-of-pocket expenses
for services rendered in connection with the delivery of its fairness opinion
and is required to pay an additional $75,000 and reasonable out-of-pocket
expenses upon the completion of the merger.

Lock-Up Agreements (page 85)

The executive officers and directors of ActionPoint and the executive
officers, directors and certain stockholders and affiliates of Captiva have
entered into lock-up agreements with ActionPoint.  Captiva will ask the holders
of Captiva's preferred stock to enter into lock-up agreements prior to the
merger.  The lock-up agreements provide that each person entering into the lock-
up agreement will not sell, transfer or otherwise dispose of certain shares of
ActionPoint common stock owned or later acquired by that person in the merger or
otherwise for a specified period of time after the closing of the merger.  Under
the lock-up agreements, one-half of each person's shares are so restricted
during the 90-day period after the closing of the merger, and the other half are
so restricted during the 180-day period following the closing of the merger.  It
is within the sole discretion of ActionPoint to release any of the parties to
the lock-up agreements from those agreements prior to the expiration of the 180-
day period.

Restrictions on the Ability of Captiva Affiliates to Sell
ActionPoint Stock (page 85)

Subject to the provisions of the lock-up agreements, all shares of
ActionPoint common stock that Captiva stockholders receive in connection with
the merger will be freely transferable unless the holder is considered an
"affiliate" of Captiva prior to the merger or of ActionPoint following
the merger for purposes of the federal securities laws.  Shares of ActionPoint
common stock held by these affiliates may be sold only pursuant to a
registration statement or an exemption under the Securities Act.  The
registration statement, of which this joint
proxy statement/prospectus forms a
part, is a registration statement for the resale of the ActionPoint common stock
that will be owned after the merger by individuals and entities that are
affiliates of Captiva and will not be affiliates of ActionPoint.  Those former
Captiva affiliates will therefore be able to freely sell the shares they receive
in the merger, subject to the lock-up agreement restrictions and existence of an
effective registration statement for the shares.

Accounting Treatment of the Merger (page 61)

The merger will be accounted for as a purchase under United States
generally accepted accounting principles, which means ActionPoint will
consolidate Captiva's operating results with ActionPoint's beginning at the
closing of the merger.

13

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Material United States Federal Income Tax Considerations
(page 62)

The merger has been structured so as to qualify as a reorganization for
United States federal income tax purposes.  If the merger qualifies as a
reorganization, Captiva stockholders will not recognize gain or loss for United
States federal income tax purposes upon receipt of ActionPoint common stock in
exchange for Captiva capital stock in the merger, except for taxes payable
because of cash they receive instead of fractional shares.  It is a condition to
the completion of the merger that ActionPoint and Captiva receive legal opinions
from their respective outside counsel that the merger constitutes a
reorganization within the meaning of the Internal Revenue Code.

Tax matters are very complicated, and the tax consequences of the merger to
you will depend on the facts of your own situation.  You should consult your tax
advisor for a full understanding of the tax consequences of the merger to
you.

Appraisal and Dissenters' Rights (page 65)

Any holder of Captiva capital stock who does not wish to accept
ActionPoint common stock in the merger has the right under California law to
receive the fair value of the holder's shares as determined pursuant to

Chapter 13 of the California General Corporation Law.  This right to receive
the fair value for their shares is subject to a number of restrictions and
technical requirements.  Generally, in order to exercise dissenters' rights,
each holder of Captiva capital stock seeking to exercise the holder's
dissenters' rights must `perfect' the holder's dissenters' rights by:

- sending a written demand to Captiva for appraisal in compliance with
California law before the vote on the merger;
- not voting in favor of the merger; and
- continuously holding the Captiva capital stock from the date of the holder's
written demand for appraisal through the closing of the merger.

Merely voting against the merger will not perfect the dissenters' rights of
Captiva stockholders.  Annex D to this joint proxy statement/prospectus
contains a copy of Chapter 13 of the California General Corporation Law
governing dissenters' rights.  A holder of Captiva capital stock that does not
follow all the steps required by California law may lose the holder's
dissenters' rights.

ActionPoint stockholders are not entitled to appraisal or dissenters' rights
in connection with the merger.

Forward-Looking Statements May Prove Inaccurate (page 31)

ActionPoint and Captiva have made forward-looking statements in this
joint proxy statement/prospectus (and in documents that are incorporated by
reference in this joint proxy statement/prospectus) that are subject to risks
and uncertainties.  Forward-looking statements include the information
concerning possible or assumed future results of operations of ActionPoint and
Captiva.  Also, words such as "believes," "expects,"
"anticipates" or similar expressions indicate that a forward-looking
statement is being made.  Stockholders should note that many factors could
affect the future financial results of ActionPoint and Captiva, and could cause
these results to differ materially
from those expressed in forward-looking
statements.  For a description of these factors that could affect the future
financial results of ActionPoint and Captiva, see "Risk Factors" on
page 20.

ActionPoint Market Price Information (page 32)

Shares of ActionPoint common stock are quoted on The Nasdaq National
Market.  On March 1, 2002, the last full trading day prior to the public
announcement of the merger, ActionPoint common stock closed at $2.43 per share.
On                      , 2002,
ActionPoint common stock closed at $                  per share.

Captiva Market Price Information (page 32)

Market prices of Captiva stock are not available, as it is a privately
held company.

14

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How the Rights of Captiva Stockholders Will Differ as ActionPoint
Stockholders (page 165)

When Captiva stockholders become ActionPoint stockholders after the
merger, their rights will be governed by ActionPoint's certificate of
incorporation and bylaws.  Those rights differ from the current rights of
Captiva stockholders under Captiva's articles of incorporation and bylaws, as
well as under the laws governing the two corporations.  Captiva is incorporated
in California, and ActionPoint is and will continue to be incorporated in
Delaware.  In general, preferential rights of the Captiva preferred stock will
no longer exist, and all stockholders will have similar rights as holders of
ActionPoint common stock.

The ActionPoint 2002 Annual Meeting (page 34)

When ActionPoint holds its 2002 annual meeting of stockholders, it will
ask its stockholders to approve the issuance of ActionPoint common stock in
connection with the merger and to vote on the following additional
proposals:

- an amendment to ActionPoint's certificate of incorporation changing
ActionPoint's name to Captiva Software Corporation if the merger is
completed;
- the election of the directors of ActionPoint;
- the ratification of the appointment of PricewaterhouseCoopers, LLP as the
independent public accountants for ActionPoint for the fiscal year 2002;
- the amendment and restatement of ActionPoint's employee stock purchase plan;
- the amendment of ActionPoint's stock option/stock issuance plan;
and
- such other business as may properly come before the annual
meeting.

The Captiva Action by Written Consent (page 38)

In addition to the merger proposal and related actions, including the
approval of the amendment and restatement of Captiva's articles of incorporation
and the conversion of all of the shares of Captiva preferred stock into shares
of Captiva common stock, the Captiva stockholders are also being asked to
approve the adoption of the Captiva 2002 equity incentive plan and the amendment
to Captiva's amended and restated stock option/stock issuance plan by
completing, signing, dating and returning the enclosed action by written
consent.

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SELECTED HISTORICAL AND SELECTED UNAUDITED

PRO FORMA COMBINED FINANCIAL INFORMATION

ActionPoint's Selected Historical Consolidated Financial
Information

(In thousands, except per share information)

You should read the following table in conjunction with ActionPoint's
historical consolidated financial statements and related notes and ActionPoint's
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in ActionPoint's annual reports, quarterly reports and
other information on file with the Securities and Exchange Commission.  See
"Where You Can Find More ActionPoint Information" on page 182.

The consolidated statements of operations data for the fiscal years ended
December 31, 1999, 2000, and 2001 and the consolidated balance sheet data as of
December 31, 2000 and 2001 have been derived from the audited consolidated
financial statements of ActionPoint incorporated by reference in and furnished
with this joint proxy statement/prospectus.  The consolidated statements of
operations data for the fiscal years ended December 31, 1997 and 1998 and the
consolidated balance sheet data as of December 31, 1997, 1998 and 1999 are
derived from ActionPoint's audited financial statements not incorporated by
reference in this joint proxy statement/prospectus.
The consolidated statements of operations data for the three months ended
March 31, 2001 and 2002 and the consolidated balance sheet data as of March 31, 2002
have been derived from the unaudited financial statements of ActionPoint incorporated by
reference in and furnished with this joint proxy statement/prospectus.  The consolidated
balance sheet data as of March 31, 2001 is derived from ActionPoint's unaudited
financial statements not furnished with or incorporated by reference in this joint
proxy/prospectus.

`Three Months Ended
                                       March 31,                    Fiscal Year Ended December 31,
                                  --------------------    ----------------------------------------------------
                                    2002       2001         2001      2000       1999        1998      1997
                                  ---------  ---------    --------- --------- ----------- ---------- ---------
Statements of Operations Data:  
----------------------------    
For continuing operations:      
Net revenues....................    $5,792     $6,595      $22,035   $25,042     $22,178    $17,409   $12,240
Gross profit....................     4,882      5,566       18,296    20,621      18,964     15,661    11,359
Operating income (loss).........         4       (350)      (2,551)   (8,353)       (848)       832       (91)
Net income (loss)...............        17       (315)      (1,915)   (8,758)       (141)     1,039       394
Basic and diluted net income
   (loss) per share.............     $0.00      $0.07       ($0.45)   ($2.09)     ($0.03)     $0.18     $0.05
                                
For discontinued operations:    
Net income (loss)...............                                                            ($1,351)     $687
Basic and diluted net income
   (loss) per share.............                                                             ($0.24)    $0.10

Net income (loss)...............       $17      ($315)     ($1,915)  ($8,758)      ($141)     ($312)   $1,081
Basic and diluted net income
   (loss) per share.............     $0.00     ($0.57)      ($0.45)   ($2.09)     ($0.03)    ($0.06)    $0.15
Shares used in per share
   calculations.................     4,429      4,275        4,300     4,190       4,370      5,657     7,285
                                


                                       March 31,                     December 31,
                                  --------------------    ----------------------------------------------------
                                    2002       2001         2001      2000       1999        1998      1997
                                  ---------  ---------    --------- --------- ----------- ---------- ---------
Consolidated Balance Sheets Data:            
----------------------------
Working capital *...............    $8,153     $4,786       $8,099    $4,960     $13,863    $19,030   $16,981
Total assets....................    14,064     15,590       15,328    17,801      23,178     26,877    37,693
Stockholders' equity............     8,174      9,616        8,157     9,922      17,378     21,357    33,923`



* Working capital is current assets minus current liabilities including
the current portion of deferred revenue.

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Captiva's Selected Historical Consolidated Financial
Information

(In thousands, except per share information)

You should read the following table in conjunction with Captiva's
consolidated financial statements and related notes and "Captiva
Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in this joint proxy statement/prospectus.  The
following information, insofar as it relates to each of the fiscal years 1998-
2001, has been derived from audited financial statements, including the
consolidated balance sheets at December 31, 2001 and 2000 and the related
consolidated statements of operations and of cash flows for the three years
ended December 31, 2001 and the related notes which are included in this joint
proxy statement/prospectus.  The consolidated statement of operations data for
the fiscal year ended December 31, 1997 and the consolidated balance sheet data
as of December 31, 1997 are derived from Captiva's unaudited financial
statements, which are not included in this joint proxy
statement/prospectus. The data for the three months ended March 31, 2002
and 2001 has been derived from unaudited financial statements also included in this joint
proxy statement/prospectus and which, in the opinion of management, include all
adjustments, consisting only of normal recurring adjustments, necessary for a fair
statement of the results for the unaudited interim period.

`Three Months Ended
                                       March 31,                    Fiscal Year Ended December 31,
                                  --------------------    ----------------------------------------------------
                                    2002       2001         2001      2000       1999        1998      1997
                                  ---------  ---------    --------- --------- ----------- ---------- ---------
Consolidated Statements of
    Operations Data:            
----------------------------
Net revenues....................    $6,100     $5,275      $24,261   $19,731     $18,492    $18,325   $10,055
Gross profit....................     3,759      3,301       15,413    11,396       9,345     11,809     5,236
Operating income (loss).........        57       (102)       1,007    (6,012)     (4,928)    (1,140)    4,687
Net loss........................      (279)      (467)        (422)   (6,975)     (6,199)    (1,717)   (4,964)

                                

                                     At March 31,                     At December 31,
                                  --------------------    ----------------------------------------------------
                                    2002                   2001      2000       1999        1998      1997
                                  ---------               --------- --------- ----------- ---------- ---------
Consolidated Balance
   Sheet Data:                  
----------------------------
Working capital deficit*........  ($13,974)               ($13,616)  ($3,358)    ($1,920)     ($628)  ($3,397)
Total assets....................     6,845                   8,005     8,444       7,804     10,394     6,307
Long-term debt..................         0                       0    10,136       6,928      3,257       111
Stockholders' deficit...........   (21,746)                (21,446)  (21,031)    (13,447)    (7,343)   (6,882)`

*Working capital deficit is current assets minus current liabilities
including the current portion ofdeferred revenue.

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Selected Unaudited Pro Forma Condensed Combined Financial
Information of ActionPoint and Captiva

(In thousands, except per share amount)

The following selected unaudited pro forma condensed combined financial
information is being provided to give you a better picture of what the results
of operations and the financial position of the combined businesses of
ActionPoint and Captiva might have looked like had the merger occurred on
January 1, 2001 for statement of operations purposes and on March 31,
2002 for balance sheet purposes.  This information is provided for illustrative
purposes only and is not necessarily indicative of what the results of
operations or financial position of the combined company would have been if the
merger with Captiva actually occurred on the dates assumed.  In addition, this
information is not necessarily indicative of what the combined company's future
consolidated results of operations or consolidated financial position will be.
Please refer to the unaudited pro forma condensed combined financial information
on page 140.

`Three Months Ended      Year Ended
                                                          March 31, 2002    December 31, 2001
                                                         ----------------  --------------------
                                                         (in thousands, except per share data)


Unaudited Pro forma Combined Statements of Operations Information:
Net revenues...........................................          $11,892               $46,296
Gross Profit...........................................            8,004                31,159
Operating Loss.........................................             (577)               (4,094)
Net Loss...............................................             (619)               (3,763)
Net loss per share-basic and fully diluted.............            (0.08)                (0.48)
Shares used in per share calculation...................            7,867                 7,792

                                                              At
                                                          March 31, 2002
                                                         ----------------                      

Unaudited Pro forma Combined Balance Sheet Information:
Cash...................................................           $8,866
Working Capital Deficit*...............................          ($1,107)
Total Assets...........................................           39,111
Stockholder's Equity...................................           17,741`

*Working capital is current assets minus current liabilities including
deferred revenue.

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Comparative Historical and Pro Forma Per Share Information

The following table presents certain unaudited historical per share and
combined pro forma per share information of ActionPoint and Captiva after giving
effect to the merger using the purchase method of accounting.  The pro forma
information does not purport to be indicative of the results of future
operations or the results that would have occurred had the merger been
consummated at the beginning of the periods presented.  The information set
forth below should be read in conjunction with the historical consolidated
financial statements and notes thereto of ActionPoint incorporated by reference
in this joint proxy statement/prospectus and of Captiva included in this joint
proxy statement/prospectus and the unaudited pro forma condensed combined
consolidated financial information included elsewhere in this joint proxy
statement/prospectus.  The unaudited pro forma combined and unaudited pro forma
equivalent per share information combine the results of operations of
ActionPoint and Captiva for the year ended December 31, 2001 and the three months
ended March 31, 2002 and ActionPoint's financial position at March 31, 2002  with Captiva's
financial position at March 31, 2002.  No cash dividends have ever been declared or paid on
ActionPoint common stock or Captiva common stock.

The following calculations were used in deriving the per share
information:

- Book value per share is computed by dividing total stockholder's equity by
the number of shares outstanding at March 31, 2002.
- ActionPoint unaudited pro forma combined book value per share is computed by
dividing pro forma stockholder's equity by the pro forma number of shares of
common stock which would have been outstanding had the merger been consummated
as of the balance sheet date.
- Captiva equivalent unaudited pro forma combined amounts are calculated by
multiplying the ActionPoint pro forma combined per share amount and book value
by the estimated exchange ratio of approximately $0.0156 per share.

`At and for the
                                                          Quarter Ended      For the Year Ended
                                                          March 31, 2002     December 31, 2001
                                                         ----------------  --------------------
ActionPoint
Historical Per Common Share Information:                                   
Net loss-basic and diluted.............................            $0.00                ($0.45)
Book value.............................................             1.87


Unaudited Pro forma Combined Per Common Share Information:
Net loss-basic and diluted.............................           ($0.08)               ($0.48)
Book value.............................................            $2.26


Captiva
Historical Per Common Share Information:                                   
Net loss-basic and diluted.............................           ($0.01)               ($0.01)
Book value.............................................            (0.46)


Equivalent Unaudited Pro forma Combined Per Common Share Information:
Net loss-basic and diluted.............................            (0.00)                (0.01)
Book value.............................................             0.04`

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RISK FACTORS

You should carefully consider the following risk factors relating to
the merger before you decide whether to vote to approve the merger, the
principal terms of the merger agreement, the amendment and restatement of
Captiva's articles of incorporation and the conversion of all of the shares of
Captiva preferred stock into shares of Captiva common stock, or the proposed
issuance of shares of ActionPoint common stock in connection with the merger.
You should also consider the other information incorporated by reference, information
included in this joint proxy statement/prospectus and furnished to you and the additional
information in ActionPoint's other reports on file with the Securities and Exchange
Commission, including ActionPoint's annual report for the year
ended December 31, 2001 and ActionPoint's quarterly report on Form 10-Q for the period ended
March 31, 2002, both of which are incorporated herein by reference.

Risks Related to the Merger

If ActionPoint and Captiva cannot successfully integrate
their respective existing business operations, the combined company may not
achieve the anticipated benefits of the merger.

Integrating Captiva and ActionPoint involves a number of risks,
including:

- the difficulties of the potential introduction of new or enhanced
products;
- the diversion of management's attention from ongoing operations;
- the difficulties and expenses in combining the operations, technology and
systems of the two companies;
- the difficulties in integrating the companies' key revenue-generating
products and/or services in a way that would be accepted in the market;
- the difficulties in the creation and maintenance of uniform standards,
controls, procedures and policies;
- the different geographic locations of the principal operations of
ActionPoint and Captiva; and
- the challenges in keeping and attracting customers.

Importantly, Captiva has never operated as a publicly-held company and will
now be subject to rigorous disclosure and reporting obligations.  Further, the
process of combining the companies could create uncertainty among employees
about their future roles with the combined company, thereby negatively affecting
employee morale.  This uncertainty may adversely affect the ability of the
combined company to retain some of its key employees after the merger.

If the combined company is to realize the anticipated benefits of the merger,
the operations of Captiva and ActionPoint must be integrated and combined
efficiently and effectively.  There can be no assurance that the integration
will be successful, or that the anticipated benefits of the merger will be
realized.

ActionPoint's stock price is volatile, and the exchange
ratio for ActionPoint common stock to be received in the merger will not be
adjusted in the event of any change in ActionPoint's stock price.

Under the merger agreement, the exchange ratio used to determine the
number of shares of ActionPoint common stock that Captiva stockholders will
receive in the merger will not be adjusted in the event of any increase or
decrease in the price of ActionPoint common stock as reflected on The Nasdaq
National Market.  The price of ActionPoint common stock at the closing of the
merger may vary from its price on the date of this joint proxy
statement/prospectus and on the date of ActionPoint's stockholder meeting and
during the period in which Captiva stockholders must return their action by
written consents.  Further, under the merger agreement, neither ActionPoint nor
Captiva will have the right to terminate or renegotiate the merger agreement or
to resolicit proxies as a result of any increase or decrease in the value of
ActionPoint common stock.  The market price of ActionPoint common stock, like
that of many other software companies, has been and may continue to be volatile.
Recently, the stock

20

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- changes in the business, operations or prospects of ActionPoint;
- the timing of the completion of the merger;
- the prospects of post-merger operations; and
- general market and economic conditions.

Some Captiva stockholders will be prohibited from selling
ActionPoint stock received in the merger for a period of 90-180 days.

The executive officers and directors of ActionPoint and the executive
officers, directors and certain stockholders and affiliates of Captiva have
entered into lock-up agreements with ActionPoint.  Captiva will also request all
of the holders of its preferred stock to enter into lock-up agreements prior to
the merger.  The lock-up agreements provide that each person entering into a
lock-up agreement will not sell, transfer or otherwise dispose of certain shares
of ActionPoint common stock owned or later acquired by that person in the merger
or otherwise for a specified period of time after the merger.  Under the lock-up
agreements, one-half of each person's shares are so restricted during the 90-day
period after the closing of the merger, and the other half are so restricted
during the 180-day period following the closing of the merger.  During this
period, the price of ActionPoint common stock may fluctuate significantly.
These holders will be prohibited from selling their ActionPoint common stock at
a time they may consider appropriate, resulting in reduced liquidity and selling
opportunities for a period of 180 days following the merger.  However,
these shares of ActionPoint common stock will become eligible for sale to the
public upon the expiration of the 90- and 180-day periods.  The sale of a large
amount of shares in the public market after each of the lock-up periods, or the
appearance that a large number of shares are available for sale, may cause the
market price of ActionPoint common stock to decline.

Failure to complete the merger could negatively affect
ActionPoint's and Captiva's operating results and their ability to enter into
alternative transactions.

If the merger is not completed for any reason, ActionPoint and Captiva
may experience a number of adverse consequences, including the following:

- the price of ActionPoint common stock may decline to the extent that the
current market price of ActionPoint common stock reflects a market assumption
that the merger will be completed;
- an adverse reaction from investors and potential investors of both companies
may reduce future financing opportunities;
- the parties' costs related to the merger, including legal and accounting
fees, must be paid even if the merger is not completed; and
- either party may be obligated to pay the expenses of the other party, up to
$350,000, if the merger agreement is terminated for certain reasons.

If the merger is terminated and Captiva or ActionPoint determines to seek
another merger or business combination, there can be no assurance that it will
be able to find a suitable partner at an attractive price.  In addition, while
the merger agreement is in effect, each of ActionPoint and Captiva is prohibited
from soliciting, initiating or encouraging or entering into extraordinary
transactions, such as a merger, sale of assets or other business combination,
with any third party.  As a result of this prohibition, each company will be
precluded from seeking other potential transactions and, should the merger not
occur, may lose an opportunity for a transaction with another potential partner
at a favorable price.

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The merger could harm key third party relationships.

The present and potential relationships of ActionPoint and Captiva with
customers and other third parties with whom they have relationships may be
harmed by the merger.  Uncertainties following the merger may cause these
parties to delay decisions regarding these relationships.  Any changes in these
relationships could harm the combined company's business.  In addition,
customers of Captiva and ActionPoint and other third parties may, in response to
the announcement of the merger, delay or defer decisions concerning Captiva or
ActionPoint.  Captiva or ActionPoint could experience a decrease in expected
revenue as a consequence of uncertainties associated with the merger.  Any delay
or deferral in those decisions by customers of Captiva and ActionPoint or other
third parties could have a material adverse effect on the business of the
combined company.

Most of the officers and directors of Captiva and
ActionPoint have different interests from yours that may have influenced them to
approve and adopt the merger and the merger agreement.

Most of the officers and directors of Captiva and ActionPoint have
interests in the merger and participate in arrangements that are different from,
or are in addition to, those of Captiva and ActionPoint stockholders generally.
These include the following interests that arise from the merger:

- ActionPoint has entered into new severance agreements with each of Stephen
Francis, John Finegan, John Stetak, Matthew Albanese, James Vickers and David
Sharp that may provide them with benefits if they resign or if their employment
is terminated after the merger;
- three directors of ActionPoint, Thomas van Overbeek, Kimra Hawley and Daniel
Tompkins, are beneficial owners of shares of Captiva preferred stock held by
Novus Ventures, L.P.;
- ActionPoint has entered into offer letters of employment with each of
Reynolds Bish and Rick Russo, Captiva's chief executive officer and chief
financial officer, respectively;
- executive officers of Captiva have received options to purchase
approximately 79,106,834 shares of Captiva common stock in connection with the
merger, which options will be assumed by ActionPoint in the merger and become
exercisable for approximately 1,235,000 shares of ActionPoint common stock;
- options to purchase up to 4,945,000 shares of Captiva common stock, pursuant
to Captiva's stock option plans, that are held by Captiva executive officers and
directors will have the benefit of fully accelerated vesting and reduced or
waived exercise prices;
- ActionPoint is registering for resale the shares of ActionPoint common stock
to be delivered to certain Captiva executive officers and directors who will not
be executive officers or directors of ActionPoint after the merger;
- three Captiva directors, James Berglund, Shirley Cerrudo and Mel Lavitt, are
affiliated with stockholders which have agreed to convert approximately
$3,941,301 in principal amount of Captiva's promissory notes into approximately
48.7% of Captiva's outstanding common stock immediately prior to the
merger;
- one Captiva director, Mel Lavitt, has agreed to convert $100,000 of
Captiva's promissory notes directly or beneficially owned by him into shares of
Captiva common stock contingent upon the occurrence of and effective immediately
prior to the merger.
- a Captiva director and stockholder, Mel Lavitt, is Vice Chairman and
Managing Director of C.E. Unterberg, Towbin, which will be paid compensation to
provide financial advisory and investment banking services to Captiva related to
the merger;
- ActionPoint has agreed that Reynolds Bish, Mel Lavitt and Jim Berglund,
current members on Captiva's board of directors, will be elected to the
ActionPoint board of directors prior to the merger;
- ActionPoint has agreed to indemnify and provide director and officer
liability insurance coverage for Captiva's directors and officers; and
- a director of Actionpoint, Patrick Edsell, serves as a director and chief executive
officer of a company that has as one of its principal investors a limited
partnership that is affiliated with an investor that will beneficially own
6.6% of Captiva's common stock immediately prior to the merger; and
- James Berglund, a Captiva director, beneficially owns shares of ActionPoint
common stock.

As a result, these officers and directors could be more likely to vote to
approve and adopt the merger and the merger agreement than if they did not hold
these interests.  Stockholders of ActionPoint and Captiva should consider
whether these interests may have influenced these officers and directors to
support or recommend the merger or the actions related to the merger.

Issuance of additional shares of ActionPoint common stock
may reduce the combined company's share price.

At the closing of the merger, ActionPoint estimates that up to 4,347,873
shares of ActionPoint common stock will be issued to Captiva stockholders or be
required to be issued in the future pursuant to warrants.  Up to an additional
2,265,000 shares of ActionPoint common stock will be issuable to Captiva
optionholders in connection with the assumption of their options by ActionPoint.
The issuance of the additional ActionPoint common stock as a result of the
merger will reduce ActionPoint's earnings per share, if any.  This dilution
could reduce the market price of ActionPoint common stock unless and until the
combined company achieves revenue growth or cost savings and other business
economies sufficient to offset the effect of this issuance.  There can be no
assurance that the combined company will achieve revenue growth, cost savings or
other business economies, or that you will achieve greater returns as a
stockholder of the combined company than as a stockholder of ActionPoint or a
stockholder of Captiva.

The possible termination of employment by the combined
company's executive officers following the merger may prevent the combined
company from achieving the anticipated benefits of the merger.

The merger of ActionPoint and Captiva will be followed by a period of
integration and transition.  This process may result in the loss of members of
the management team of the combined company.  Any changes in the management team
of the combined company prior to the time when ActionPoint's and Captiva's
businesses are fully integrated could make it significantly more difficult to
integrate the critical functions of these two businesses and create a combined
company that can compete effectively against other information capture software
providers.

Also, as a result of the merger, each of ActionPoint's executive officers,
Stephen Francis, John Finegan, James Vickers, John Stetak, David Sharp and
Matthew Albanese, may be entitled to significant severance benefits if they
resign or if their employment is terminated under certain circumstances after
the merger.  Mr. Francis may be entitled to resign and collect severance
payments as soon as one month after the merger and the other executive officers
may be entitled to resign and collect severance payments as soon as three months
following the merger, if they have suffered a material reduction in their
authority or responsibility.  In addition, Reynolds Bish, Rick Russo, Steven
Burton and Blaine Owens are employees at will and may terminate their employment
at any time

Merger-related charges against earnings will reduce the
combined company's earnings, if any, in the quarter in which the merger is
consummated and during the post-merger integration period.

ActionPoint expects to incur charges of approximately $1.1 million in
outside costs, including legal, accounting and financial advisory fees.  These
costs may be higher than anticipated.  In addition, the combined company may
incur other additional integration costs associated with the merger, including
the payment of employee severance benefits.  Some of these nonrecurring costs
will be charged to operations in the fiscal quarter in which the merger is
consummated, thereby increasing expenses for such quarter, while others will be
expensed as incurred during the post-merger integration period.

23

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Accounting charges resulting from the merger will have a
negative effect on earnings over future quarters.

The merger will result in approximately $19 million of goodwill and other intangible
assets being recorded on the books of the combined company.  Of this amount, up to
approximately $9 million will be amortized to cost of revenues and operating
expenses over the next five years.  In addition, a deferred compensation charge
may be recorded by the combined company based upon the excess of the ActionPoint
stock price at the effective date of the merger over the exercise price of the
unvested Captiva options assumed by Action Point.  This charge will be amortized
to operating expenses over the remaining vesting period of the applicable
options.  The non-cash charges related to these items will negatively affect
earnings during the amortization period, which could have a negative effect on
the stock price of the combined company.

Captiva's liabilities, including outstanding bank debt of
approximately $2.5 million and promissory notes in the principal amount of up to
approximately $2.0 million, will have a considerable negative impact on the
balance sheet of the combined company.

Captiva's liabilities exceed its assets and Captiva's independent accountants
included an explanatory paragraph in their report on the consolidated financial
statements at December 31, 2001 and for the years then ended regarding Captiva's ability
to continue as a going concern if the merger does not occur. As a result of the merger, the
balance sheet of the combined company will be weaker than that of ActionPoint
alone.  This may impair the combined company's future ability to obtain debt or
equity financing in the capital markets.  The failure to obtain necessary debt
or equity financing will adversely affect financial operations and cause the
market price of the combined company's common stock to decline.

Risks Related to the Business of the Combined Company

ActionPoint and Captiva have each incurred substantial losses
in the past, may continue to incur additional losses in the future and will not
be successful until the combined company reverses this trend.

ActionPoint incurred losses of $1.9 million for the year ended December
31, 2001, and Captiva incurred losses of $422,000 for the same period.  In
recent periods, ActionPoint and Captiva have not generally generated cash from
operations.  Even if the combined company achieves profitability, given the
competitive and evolving nature of the industry in which it operates, the
combined company may not be able to sustain or increase profitability on a
quarterly or annual basis.  As a result, the combined company will need to
generate higher revenues while containing costs and operating expenses to become
and remain profitable.  The failure to do so may cause the stock price of the
combined company to decline.

Because of the unpredictability of operating results from
ActionPoint and Captiva products, the combined company may not accurately
forecast revenues or match expenses to revenues which could harm quarterly
operating results and cause volatility or declines in the stock price of the
combined company.

Each company's quarterly revenues, expenses and operating results have
varied significantly in the past and are likely to vary significantly in the
future due to a variety of factors, including:

- the introduction of new or enhanced products;
- fluctuations in the size and timing of significant orders;
- uncertainty in the budgeting cycles of customers; and
- possible delays in recognizing licensing revenues and the trend within the
software industry for a large portion of orders to be booked late in a given
calendar quarter.

Each company currently operates with virtually no order backlog because
software products are shipped shortly after orders are received.  This fact
makes product revenues in any quarter substantially dependent on orders booked
and shipped throughout that quarter.  In addition, each company obtains a
significant portion of revenues from indirect sales channels over which it has
little control.  Moreover, expense levels are based to a significant extent on
expectations of future revenues and therefore are relatively fixed in the short
term.  If revenue levels are

24

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As a result of these factors, ActionPoint and Captiva believe that
quarter-to-quarter comparisons of revenue, expenses and operating results are likely to
vary significantly in the future and period-to-period comparisons of operating
results are not necessarily meaningful.  As such, these comparisons should not
be relied upon as indications of the combined company's future performance.  In
addition, operating results of the combined company in one or more future
quarters may fail to meet the expectations of securities analysts or investors.
If this occurs, the combined company could experience an immediate and
significant decline in the trading price of its stock.

The combined company may not be able to compete
successfully against current and potential competitors.

Each of ActionPoint and Captiva believes competition in the information
capture software industry may intensify in the future.

The market for forms processing and document capture solutions is very
competitive and subject to rapid change.  In addition, because there are
relatively low barriers to entry in the software market, the combined company
may encounter additional competition from established and emerging companies.
Many potential competitors have longer operating histories, significantly
greater financial, technical, marketing and other resources than either of
ActionPoint or Captiva, significantly greater name recognition and a larger
installed base of customers.  As a result, these potential competitors may be
able to respond more quickly to new or emerging technologies and changes in
customer requirements or to devote greater resources to the development,
promotion and sale of competitive products than the combined company can.  There
is also a substantial risk that announcements of competing products by potential
competitors could result in the delay or postponement of customer orders in
anticipation of the introduction of the competitors' new products.

In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to
increase the ability of their products to address customer needs.  These
cooperative relationships may limit the combined company's ability to sell its
products through particular reseller partners.  Accordingly, new competitors or
competitive cooperative relationships may emerge and rapidly gain significant
market share.  ActionPoint and Captiva also expect that competition will
increase as a result of software industry consolidation.  Increased competition
is likely to result in price reductions, fewer customer orders, reduced margins
and loss of market share, any of which could harm the combined company's
revenues and business.

If the market for information capture software does not
grow, revenues of the combined company may not grow.

The market for information capture software is fragmented and extremely
competitive.  Both ActionPoint and Captiva have spent, and intend to continue to
spend, considerable resources educating potential customers about their software
products and the information capture market generally.  These expenditures may
fail to achieve any additional degree of market acceptance for the products of
the combined company.  The rate at which organizations have adopted each
company's existing products has varied significantly, and ActionPoint and
Captiva expect to continue to experience such variations in the future.  If the
market for information capture products grows more slowly than ActionPoint and
Captiva currently anticipate, the combined company's revenues will not grow and
its operating results will suffer.

If the combined company is unable to respond in an
effective and timely manner to technological change and new products in the
industry, its revenues and operating results will suffer.

If the combined company faces material delays in introducing new
services, products and enhancements, its customers may forego the use of its
services and use those of its competitors.  The market for information capture
is characterized by rapid technological change, frequent new product
introductions and enhancements, uncertain product life cycles, changes in
customer demands and evolving industry standards.  The introduction of products
embodying new technologies and the emergence of new industry standards can
render existing products obsolete and unmarketable.  The future success of the
combined company will depend upon its ability to continue to enhance its current
products while developing and introducing new products on a timely basis that
keep pace with technological developments and satisfy increasingly sophisticated
customer requirements.  As a result of the complexities inherent in each
company's software, new products and product enhancements can require long
development and testing periods.  As a result, significant delays in the general
availability of such new releases or

25

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Software defects that are discovered in ActionPoint or
Captiva products could harm the combined company by damaging its reputation,
causing loss of customers and resulting in significant costs and
liabilities.

Each company's software products are complex and may contain errors or
defects, particularly when first introduced or when new versions or enhancements
are released.  In the past, both ActionPoint and Captiva have discovered
software errors in certain of their new products after their introduction.  In
addition, ActionPoint and Captiva products are combined with complex products
developed by other vendors.  As a result, should problems occur, it may be
difficult to identify the source of the problem.  Defects and errors, or end-
user perception of defects and errors, found in current versions, new versions
or enhancements of these products after commencement of commercial shipments may
result in:

- loss of customers;
- damage to brand reputation;
- delay in market acceptance of current and future products;
- diversion of development and engineering resources; and
- legal actions by customers.

The occurrence of any one or more of these factors could harm the combined
company's operating results and financial condition.

If the combined company cannot manage and expand
international operations, its revenues may not increase and its business and
results of operations would be harmed.

In 2001, ActionPoint's international sales represented approximately 30%
of its revenues, and Captiva's international sales represented approximately 14%
of its revenues.  Both ActionPoint and Captiva anticipate that, for the
foreseeable future, a significant portion of revenues will be derived from
sources outside the United States.  The combined company intends to continue to
expand sales and support operations internationally.  In order to successfully
expand international sales, the combined company may establish additional
foreign operations, expand international sales channel management and support
organizations, hire additional personnel, customize its products for local
markets, recruit additional international resellers and attempt to increase the
productivity of existing international resellers.  If the combined company is
unable to do any of the foregoing in a timely and cost-effective manner, its
sales growth internationally, if any, will be limited, and its business,
operating results and financial condition would be harmed.  Even if the combined
company is able to successfully expand international operations, it may not be
able to maintain or increase international market demand for its products.  The
combined company's international operations are generally subject to a number of
risks, including:

- costs of customizing products for foreign countries;
- protectionist laws and business practices favoring local competition;
- greater difficulty or delay in accounts receivable collection;
- difficulties in staffing and managing foreign operations;
- foreign currency exchange rate fluctuations; and
- political and economic instability.

To date, the majority of ActionPoint's and Captiva's revenues and costs have
been denominated in United States dollars.  However, the combined company
expects that in the future an increasing portion of revenues and costs will be
denominated in foreign currencies.  Although the combined company may undertake
foreign exchange hedging transactions to reduce foreign currency transaction
exposure, it does not currently intend to eliminate all foreign currency
transaction exposure.

The future success of the combined company is dependent on
the services of its key management, sales and marketing, technical support and
research and development personnel, and those persons' knowledge of the combined
company's business and technical expertise would be difficult to replace.

ActionPoint's and Captiva's products and technologies are complex, and
the combined company will be substantially dependent upon the continued service
of existing key management, sales and marketing, technical support and research
and development personnel.  All of these key employees are employees "at
will" and can resign at any time.  Moreover, some of these key employees
may be entitled to receive severance benefits upon their termination or
resignation.  Mergers like that of ActionPoint and Captiva are followed by a
period of transition which often results in changes in key employees.  The loss
of the services of one or more of these key employees could harm the business of
the combined company and slow product development processes or sales and
marketing efforts.

If the combined company fails to recruit and retain a
significant number of qualified technical personnel, it may not be able to
develop, introduce or enhance products on a timely basis.

Each company requires the services of a substantial number of qualified
technical support and research and development personnel.  The market for these
highly skilled employees is characterized by intense competition, which is
heightened by their high level of mobility.  These factors make it particularly
difficult to attract and retain the qualified technical personnel required.
Each company has experienced, and expects to continue to experience, difficulty
in hiring and retaining highly skilled employees with appropriate technical
qualifications.  If the combined company is unable to recruit and retain a
sufficient number of technical personnel, it may not be able to complete
development of, or upgrade or enhance, its products in a timely manner.  Even if
the combined company is able to expand its staff of qualified technical
personnel, it may require greater than expected compensation packages which
would increase operating expenses.

The combined company could be subject to potential product
liability claims and third party liability claims related to its products and
services, and as a result its reputation and operating results may suffer.

Each company's products are used in connection with critical business
functions and may result in significant liability claims if they do not work
properly.  Limitation of liability provisions included in each company's license
agreements may not sufficiently protect them from product liability claims
because of limitations in existing or future laws or unfavorable judicial
decisions.  Although neither company has experienced any material product
liability claims to date, the sale and support of their products may give rise
to claims which may be substantial in light of the use of those products in
business-critical applications.  Liability claims could require expending
significant time and money in litigation or to pay significant damages.  Any
claims for damages, whether or not successful, could seriously damage the
combined company's reputation and business.

To manage its expected growth and expansion, the combined
company needs to continue to improve and implement financial and managerial
controls and continue to improve its reporting systems and procedures.  If the
combined company is unable to do so successfully, it may not be able to manage
growth effectively and its operating results would be harmed.

The combined company's expected growth will place a significant strain on
its management, information systems and resources.  In order to manage this
growth effectively, the combined company will need to continue to improve its
financial and managerial controls and reporting systems and procedures.  Any
inability of the combined company's management to integrate employees, products,
technology advances and customer service into operations and to eliminate
unnecessary duplication may have a materially adverse effect on its business,
financial condition and results of operations.

27

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If the combined company is unable to build awareness of
its respective brand, it may not be able to compete effectively against
competitors with greater name recognition and its sales could be adversely
affected.

If the combined company is unable to economically achieve or maintain a
leading position in information capture software or to promote and maintain its
brand, its business, results of operations and financial condition could suffer.
Development and awareness of the combined company's brand will depend largely on
its success in increasing its customer base.  In order to attract and retain
customers and to promote and maintain its brand in response to competitive
pressures, the combined company plans to maintain its marketing and advertising
budget.

Significantly all of ActionPoint's revenues are currently
derived from sales of two software products and significantly all of Captiva's
revenues are generated from sales and service of one software product, and if
demand for these products declines or fails to grow as expected, revenues of the
combined company will be harmed.

ActionPoint derives substantially all of its revenues from the InputAccel
product family and Pixtools software tools, and substantially all of Captiva's
revenues are generated from the FormWare product family.  Therefore, future
operating results of the combined company depend heavily upon continued and
widespread market acceptance for the InputAccel, Pixtools and FormWareproducts and enhancements to those products.  A decline in the demand for
any of these products as a result of competition, technological change or other
factors would cause the combined company's revenues to suffer.

The combined company may be unable to meet its future
capital requirements.

The combined company cannot be certain that financing will be available
to it on favorable terms when required, or at all.  If the combined company
raises funds through the issuance of equity, equity-related or debt securities,
the securities may have rights, preferences or privileges senior to those of the
rights of its common stock and its stockholders may experience dilution.  The
combined company will require substantial working capital to fund its business.
Each of ActionPoint and Captiva has frequently experienced negative cash flows
from operations in the past, and the combined company may experience negative
cash flow from operations in the future.

ActionPoint's and Captiva's reliance upon contractual
provisions and domestic copyright and trademark laws to protect their
proprietary rights may not be sufficient to protect their intellectual property
from others who may sell similar products.

ActionPoint and Captiva believe that the steps they have taken to
safeguard their intellectual property afford only limited protection.
ActionPoint and Captiva rely primarily on a combination of copyright, trademark
and trade secret laws, confidentiality procedures and contractual provisions to
protect their proprietary rights.  They license their software products
primarily under license agreements.  Competitors may develop technologies that
are similar or superior to ActionPoint's and Captiva's technology or design that
do not infringe ActionPoint's or Captiva's copyrights and trade secrets, and
this could reduce demand for the combined company's products.  Despite the
companies' efforts to protect proprietary rights, unauthorized parties may
attempt to copy aspects of their products or to obtain and use information that
the companies regard as proprietary.  Policing the unauthorized use of
ActionPoint's and Captiva's products is difficult and, although neither company
is able to determine the extent to which piracy of its software products exists,
software piracy is be expected to be a persistent problem.  In addition, the
laws of many foreign countries do not protect proprietary rights as fully as the
laws of the United States.

ActionPoint and Captiva depend upon software they license
from third parties, the loss of which could harm the revenues of the combined
company.

Each of ActionPoint and Captiva relies upon certain software licensed
from third parties, including software that is integrated with the companies'
internally developed software and used in their products to perform key
functions.  There can be no assurance that these third-party software licenses
will continue to be available to the combined company on commercially reasonable
terms, if at all.  The loss of or inability to maintain any such software
licenses could result in shipment delays or reductions until equivalent software
could be developed, identified, licensed and integrated.  Such delays would
materially adversely affect the combined company's business, operating results
and financial condition.

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ActionPoint and Captiva have invested substantial
resources in developing their respective products and brands; if the combined
company were subject to a protracted infringement claim or one with a
significant damage award, the operating results of the combined company would
suffer.

Substantial litigation regarding intellectual property rights and brand
names exists in this industry.  Both companies expect that software product
developers increasingly will be subject to infringement claims as the number of
products and competitors in this industry segment grows and the functionality of
products in different industry segments overlaps.  Neither ActionPoint nor
Captiva is aware that any of its products infringe any proprietary rights of
third parties.  However, third parties, some with far greater financial
resources than either ActionPoint or Captiva, may claim infringement of their
intellectual property rights by ActionPoint's or Captiva's products.  Any such
claims, with or without merit, could:

- be time consuming to defend;
- result in costly litigation;
- divert management's attention and resources;
- cause product shipment delays; or
- require the combined company to enter into royalty or licensing agreements.

If the combined company is required to enter into royalty or licensing
agreements to resolve an infringement claim, it may not be able to enter into
those agreements on terms favorable to it.  A successful claim of product
infringement against the combined company, or its failure or inability to either
license the infringed or similar technology or develop alternative technology on
a timely basis, may harm the combined company's operating results.  This result
could lead to the combined company's financial condition and liquidity being
harmed because it was not be able to sell the impacted product without
redeveloping it or incurring significant additional expenses.

ActionPoint and Captiva have depended heavily on service
revenues to increase overall revenues, and the combined company may not be able
to sustain the existing levels of profitability of this part of its
business.

Many ActionPoint and Captiva customers have entered into service
agreements, which make up a portion of each company's revenue.  Service revenues
represented 30%, 22% and 19% of ActionPoint's total revenues for the years ended
December 31, 2001, 2000 and 1999, respectively.  Service revenues represented
54%, 48% and 55 % of Captiva's total revenues for the years ended December 31,
2001, 2000, and 1999, respectively.  The level of service revenues will depend
largely upon the combined company's implementation services and ongoing renewals
of customer support contracts by its growing installed customer base.
Implementation revenues of the combined company could decline if third-party
organizations such as systems integrators compete for the installation or
servicing of the combined company's products.  In addition, the combined
company's customer support contracts might not be renewed in the future.  Due to
the increasing costs of operating a professional services organization, the
combined company may not be able to sustain profitability in this part of its
business in the near future, or ever.

Executive officers and directors of the combined company,
and entities affiliated with them, will have substantial control over the
combined company, which could delay or prevent a change in the corporate control
favored by its other stockholders.

Following the merger, the combined company's executive officers and
directors, and entities affiliated with them, will beneficially own
approximately 31% of the combined company's common stock.  These persons acting
together would be able to significantly influence all matters requiring approval
by the stockholders of the combined company, including the election of directors
and the approval of mergers or other business combination transactions.

29

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Provisions of ActionPoint's charter documents, Delaware
law and ActionPoint's rights plan may have anti-takeover effects that could
discourage or prevent a change in control, which may suppress the combined
company's stock price or cause it to decline.

Provisions of ActionPoint's certificate of incorporation and bylaws and a
rights plan adopted by the board of directors of ActionPoint may discourage,
delay or prevent a merger or acquisition that the common stockholders of the
combined company may consider favorable.  Provisions of ActionPoint's
certificate of incorporation and bylaws:

- prohibit cumulative voting in the election of directors;
- eliminate the ability of stockholders to call special meetings; and
- establish advance notice requirements for nominations for election to the
board of directors or for proposing matters that can be acted on by stockholders
at stockholder meetings.

The terms of the rights plan are set forth in the rights agreement entered
into by ActionPoint and the rights agent.  The rights granted pursuant to the
rights agreement have anti-takeover effects, which may cause substantial
dilution to a person or group that attempts to acquire the combined company on
terms that its board of directors determines are not in the best interests of
the combined company's stockholders.  Certain provisions of Delaware law also
may discourage, delay or prevent someone from acquiring or merging with the
combined company, which may cause the market price of its common stock to
decline.

The combined company may not be able to maintain its
listing on The Nasdaq National Market, in which event the liquidity and share price
of the combined company's common stock will be adversely affected.

ActionPoint's common stock is presently authorized for quotation on The
Nasdaq National Market.  Accordingly, ActionPoint is subject to, and the
combined company will be subject to, all requirements of its listing agreement
with Nasdaq.  Among the events that could cause the combined company to have its
status as a National Market Issuer terminated are:

- failure to maintain a minimum bid price for the combined company's common
stock of either $1.00 per share or $5.00 per share, depending on, among other
things, whether or not tangible net assets of the combined company are greater
than or less than $4 million;
- failure to maintain an audit committee that comports to the independence and
other standards of The Nasdaq National Market and the Securities and Exchange
Commission; and
- failure to timely hold annual meetings of stockholders and comply with other
corporate governance requirements.

ActionPoint's common stock has not traded below the $1.00 minimum bid, but on
September 16, 2001 the closing trading price was $1.16. If the common
stock price of the combined company drops below $1.00, it could result in the
delisting of the combined company's stock on The Nasdaq National Market or the
need to complete a reverse stock split.  If the combined company's stock is
delisted and thus no longer eligible for quotation on The Nasdaq National
Market, it would trade either as a Nasdaq Small Cap issue or in the over-the-
counter market, both of which are viewed by most investors as less desirable and
less liquid marketplaces.  The loss of the combined company's listing on The
Nasdaq National Market would reduce the liquidity and share price of the common stock
of the combined company, as well as complicate compliance with state blue-sky laws.

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Cautionary Statement Concerning Forward-Looking
Statements

ActionPoint and Captiva believe this document contains "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995.  These statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of the management of ActionPoint and
Captiva, based on information currently available to each company's management.
The use of words such as "believes," "expects,"
"anticipates," "intends," "plans,"
"estimates," "should," "likely" or similar
expressions indicates that a forward-looking statement is being made.  Forward-
looking statements include, among other things, the information concerning
possible or assumed future results of operations of ActionPoint set forth under:

- "Summary";
- "Risk Factors";
- "The Merger"; and
- "Unaudited Pro Forma Financial Statements."

Forward-looking statements are not guarantees of performance.  They involve
risks, uncertainties and assumptions.  The future results and stockholder values
of ActionPoint or Captiva may differ materially from those expressed in the
forward-looking statements.  Many of the factors that will determine these
results and values are beyond ActionPoint's or Captiva's ability to control or
predict.  Stockholders are cautioned not to put undue reliance on any forward-
looking statements.  Those statements are made in reliance on the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.  For a discussion of some of the
factors that may cause actual results to differ materially from those suggested
by the forward-looking statements, please read carefully the information under
"Risk Factors" on page 20.  This list of factors that may affect
future performance and the accuracy of forward-looking statements is
illustrative, but by no means exhaustive.  Accordingly, all forward-looking
statements should be evaluated with the understanding of their inherent
uncertainty.  ActionPoint and Captiva expressly disclaim any obligation to
update or alter forward-looking statements, whether as a result of new
information, future events or otherwise.

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MARKET PRICE AND DIVIDEND INFORMATION

ActionPoint Common Stock

ActionPoint's common stock is traded on The Nasdaq National Market under
the symbol "ACTP."  ActionPoint's common stock began trading in
September 1993.  The following table sets forth the range of high and low sales
prices reported on The Nasdaq National Market for ActionPoint common stock for
the periods indicated.

`Common Stock Price
                                       ------------------------
                                           High          Low
                                       ------------   ---------
Year ended December 31, 2000:       
Second Quarter......................        $20.25       $7.00
Third Quarter.......................          8.44        4.13
Fourth Quarter......................          5.38        2.00

                                    
Year ended December 31, 2001:       
First Quarter.......................         $6.19       $1.75
Second Quarter......................          5.16        2.59
Third Quarter.......................          3.00        1.16
Fourth Quarter......................          1.80        1.25

                                    
Year ended December 31, 2002:       
First Quarter.......................         $2.77       $1.58
Second Quarter (through June   , 2002).`

On March 1, 2002, the last full trading day prior to the public announcement
of the merger agreement, the last reported sale price of ActionPoint common
stock on The Nasdaq National Market was $2.43 per share.  On
June        , 2002,
the last reported sale price of ActionPoint common stock on The Nasdaq National
Market was $        per share.

Because the market prices of ActionPoint common stock may fluctuate, the
market prices per share of the shares of ActionPoint common stock that holders
of Captiva capital stock will receive in the merger, as reported on The Nasdaq
National Market, may increase or decrease prior to the merger.

Captiva
stockholders are urged to obtain current market quotations for ActionPoint
common stock.

No assurances can be made as to what the market price
will be at the effective time of the merger.  The number of shares to be issued
by ActionPoint in the merger will not fluctuate based on changes in the market
price of ActionPoint's common stock.  Accordingly, the market value of the
shares of ActionPoint common stock that holders of Captiva Stock will receive
may vary significantly from the prices shown above.

ActionPoint has not paid any cash dividends on its common stock and currently
intends to retain any future earnings for use in its business.  ActionPoint does
not anticipate that any cash dividends will be declared or paid on the common
stock in the foreseeable future.  As of  June
           , 2002, the
most recent practicable date prior to the printing of this joint proxy
statement/prospectus, there were approximately        
record owners of ActionPoint common stock.

Captiva Capital Stock

There is no established public trading market for Captiva common stock.
In the opinion of Captiva management, due to a lack of an established public
trading market for shares of Captiva capital stock, transactions in Captiva
capital stock of which Captiva is aware have not occurred frequently enough to
provide representative prices.

Captiva has never declared or paid any cash dividends on its capital stock.
Captiva currently intends to retain any future earnings to finance the growth
and development of its business and therefore does not anticipate paying

32

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For restrictions that currently and materially limit
Captiva's ability to pay dividends or that are reasonably likely to materially
limit future dividends, other than the sufficiency of current or future
earnings, see "Comparison of Stockholder Rights-Dividends" on page
170.

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THE ACTIONPOINT ANNUAL MEETING

General

This joint proxy statement/prospectus is being furnished to the
stockholders of ActionPoint as part of the solicitation of proxies by the
ActionPoint board of directors for use at the annual meeting of stockholders of
ActionPoint to be held on July
         , 2002, at
      a.m., local time, at 1299 Parkmoor Avenue, San
Jose, California, or at any adjournment or postponement of such meeting.  This
joint proxy statement/prospectus and the enclosed form of proxy are first being
mailed to stockholders of ActionPoint on or about June
         , 2002.

Purpose of Annual Meeting

The purpose of the ActionPoint annual meeting is to:

- approve the issuance of shares of ActionPoint common stock to the
stockholders of Captiva and the holders of all the outstanding options and
warrants of Captiva which will be assumed by ActionPoint in accordance with the
merger agreement;
- approve an amendment to ActionPoint's certificate of incorporation to change
the name of ActionPoint to Captiva Software Corporation if the merger is
completed;
- elect Patrick Edsell, John Finegan, Stephen Francis, Kimra Hawley, Thomas
van Overbeek, Bruce Silver and Daniel Tompkins as directors of ActionPoint;
- ratify the appointment of PricewaterhouseCoopers LLP as the independent
public accountants for ActionPoint for 2002;
- approve the amendment and restatement of ActionPoint's employee stock
purchase plan;
- approve the amendment to ActionPoint's 1993 stock option/stock
issuance plan; and
- transact such other business as may properly come before the annual meeting
or any adjournment or postponement of the meeting.

ActionPoint Board of Directors' Recommendations

The ActionPoint board of directors, after careful consideration, has
unanimously approved and adopted the merger, and the merger agreement and the
related transactions.  The ActionPoint board believes that the terms of the
merger are fair to, and in the best interests of, ActionPoint and its
stockholders and unanimously recommends that the ActionPoint stockholders vote
FOR the approval of the share issuance in connection with the merger.

The ActionPoint board of directors also recommends that ActionPoint
stockholders vote FOR:

- the approval of the name change amendment to ActionPoint's certificate of
incorporation, if the merger is completed;
- the nominated directors;
- the ratification of the appointment of PricewaterhouseCoopers LLP as the
independent public accountants for ActionPoint for 2002; and
- the amendment and restatement of ActionPoint's employee stock purchase
plan; and
- the amendment to ActionPoint's 1993 stock option/stock
issuance plan.

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Record Date and Voting

In General.  Holders of record of shares of ActionPoint common
stock at the close of business on June 4
, 2002, referred to in
this joint proxy statement/prospectus as the ActionPoint record date, are
entitled to notice of and to vote at the ActionPoint annual meeting.  On the
record date, there were outstanding 4,374,873
shares of ActionPoint
common stock, each of which will be entitled to one vote.  A majority of the
shares of ActionPoint common stock entitled to vote must be present in person or
represented by proxy and cast either affirmatively or negatively on the proposal
to constitute a quorum.  Shares of ActionPoint common stock present in person or
represented by proxy at the ActionPoint annual meeting and entitled to vote will
be counted for the purposes of determining whether a quorum is present.

The Share Issuance.  Pursuant to applicable rules of The Nasdaq
National Market, the holders of a majority of the shares of ActionPoint common
stock voted in person or by proxy and cast either affirmatively or negatively at
the annual meeting must approve the issuance of up to approximately 6,639,873
shares of ActionPoint common stock in connection with the merger, including the
issuance of up to 2,265,000 shares pursuant to options held by Captiva
employees, the majority of which were granted to the executive officers of
Captiva in anticipation of the merger.

Abstentions and broker "non-votes" will not be counted as having
been voted on the proposal and have the effect of reducing the number of
affirmative votes required to achieve a majority for such approval and adoption
by reducing the total number of shares from which the majority is calculated.  A
broker non-vote occurs when a broker holding shares for a beneficial owner does
not vote on a proposal because the broker does not have discretionary voting
power and has not received instructions from the beneficial owner with respect
to the proposal.  Abstentions and broker non-votes will not be considered voted
for or against the approval of the share issuance.

As of the record date, the executive officers and directors of ActionPoint
held 10.1% of the outstanding shares of ActionPoint common
stock entitled to vote on the share issuance at the 2002 annual meeting.  Those
executive officers and directors have entered into voting agreements with
Captiva in which they agreed to vote their shares in favor of the share
issuance.

Amendment to Certificate of Incorporation.  The proposed amendment of
ActionPoint's certificate of incorporation, changing ActionPoint's name to
Captiva Software Corporation if the merger is completed, requires the
affirmative vote of a majority of the outstanding shares of ActionPoint common
stock as of the record date.  Abstentions and broker non-votes will not be
counted as having been voted for the proposal and have the same effect as a vote
against the proposal.  The name change amendment is subject to the completion of
the merger, and accordingly, the name of ActionPoint will not change if the
merger is not completed.

If this proposal is not approved by the ActionPoint stockholders but the
share issuance is approved and the merger is completed, ActionPoint will change
its name by completing a merger with a newly formed and wholly-owned subsidiary
that will not require the approval of the ActionPoint stockholders and will not
change any provisions of ActionPoint's certificate of incorporation or bylaws
other than the ActionPoint name.

Pursuant to the voting agreements, all of ActionPoint's executive officers
and directors are required to vote their shares in favor of the amendment of
ActionPoint's certificate of incorporation.

Election of Directors.  ActionPoint's directors are elected by a
plurality of the affirmative votes cast by those shares present in person, or
represented by proxy, and entitled to vote at the annual meeting.  Therefore,
the seven nominees for director receiving the highest number of affirmative
votes will be elected.  Abstentions and broker "non-votes" will not be
considered voted for or against a nominee and thus will have no effect on the
outcome of the vote.  Stockholders may not cumulate votes in the election of
directors.  If the merger is completed, ActionPoint has agreed that Messrs.
Finegan, Tompkins and van Overbeek will resign and Reynolds Bish, Mel Lavitt and
Jim Berglund, current members of Captiva's board of directors, will be elected
to ActionPoint's board of directors prior to the merger.  If the merger is not
completed, the ActionPoint directors elected at the ActionPoint 2002 annual
meeting will continue as the directors of ActionPoint.

Ratification of Independent Public Accountants.  Ratification of the
appointment of PricewaterhouseCoopers LLP as the independent public accountants
for ActionPoint for 2002 requires the affirmative vote of a majority of those
shares present in person, or represented by proxy, and cast either affirmatively
or negatively at the annual meeting.  Abstentions and broker non-votes will not
be counted as having been voted on the proposal and thus will have no effect on
the outcome of the vote.

Amendment and Restatement of ActionPoint's Employee Stock Purchase Plan
and Amendment to ActionPoint's 1993 Stock Option/Stock Issuance Plan.
Approval of the amendment and restatement of ActionPoint's
employee stock purchase plan and amendment to ActionPoint's 1993 stock
option/stock issuance plan requires the affirmative vote of a majority of

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Voting and Revocation of Proxies

All shares of ActionPoint common stock that are entitled to vote and are
represented at the ActionPoint annual meeting by properly executed proxies
received by ActionPoint prior to or at the meeting, and not revoked, will be
voted at the meeting or any adjournment or postponement thereof in accordance
with the instructions indicated on the proxies.  If no instructions are
indicated (other than broker non-votes), the proxies will be voted FOR
approval and adoption of:

- the share issuance;
- the amendment to ActionPoint's certificate of incorporation providing for
the change of ActionPoint's name to Captiva Software Corporation if the merger
is completed;
- the election of the directors nominated by ActionPoint's board of
directors;
- the ratification of PricewaterhouseCoopers LLP as ActionPoint's independent
public accountant for 2002; and
- the amendment and restatement of ActionPoint's employee stock purchase
plan;and
- the amendment to ActionPoint's 1993 stock option/stock
issuance plan.

The persons appointed as proxies by ActionPoint stockholders (Stephen Francis
and John Finegan) may propose and vote for one or more adjournments of the
annual meeting, including adjournments to permit further solicitation of proxies
in favor of the share issuance if ActionPoint stockholders have granted such
authority to the proxies by checking the appropriate box on the ActionPoint
proxy.

The ActionPoint board of directors does not know of any matters other than
those described in the notice of the ActionPoint 2002 annual meeting that are to
be presented for action at such meeting.  If any other matters are properly
presented at the ActionPoint 2002 annual meeting for consideration, the persons
appointed as proxies generally will have discretion to vote on such matters in
accordance with their judgment.

The person giving a proxy pursuant to this solicitation may revoke it at any
time before it is voted.  Proxies may be revoked by:

- filing with the Secretary of ActionPoint, at or before the taking of the
vote at the ActionPoint 2002 annual meeting, a written notice of revocation
bearing a later date than the proxy;
- duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of ActionPoint before the taking of the vote at
the ActionPoint 2002 annual meeting; or
- attending the ActionPoint 2002 annual meeting and voting in person, although
attendance at the ActionPoint 2002 annual meeting will not in and of itself
constitute a revocation of a proxy.

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Any written notice of revocation or subsequent proxy should be sent to
ActionPoint, Inc., 1299 Parkmoor Avenue, San Jose, California 95126, Attention:
Corporate Secretary, or hand-delivered to the Secretary of ActionPoint at or
before the taking of the vote at the ActionPoint 2002 annual meeting.

ActionPoint may retain a third party to solicit proxies from ActionPoint
stockholders in connection with the merger.  All expenses of ActionPoint's
solicitation of proxies for the ActionPoint 2002 annual meeting will be borne by
ActionPoint.  In addition to solicitation by use of the mails, proxies may be
solicited from ActionPoint stockholders by the directors, officers and employees
of ActionPoint in person or by telephone, facsimile, electronic mail or other
means of communication.  These directors, officers and employees will not be
additionally compensated, but may be reimbursed for reasonable out-of-pocket
expenses in connection with the solicitation.  Arrangements will also be made
with brokerage houses, custodians, nominees and fiduciaries for forwarding of
proxy solicitation materials to the beneficial owners of shares held of record
by such brokerage houses, custodians, nominees and fiduciaries, and ActionPoint
will reimburse these brokerage houses, custodians, nominees and fiduciaries for
their reasonable expenses incurred in connection with the solicitation.

Appraisal and Dissenters' Rights

ActionPoint's stockholders are not entitled to appraisal or dissenters'
rights in connection with the merger.

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THE CAPTIVA ACTION BY WRITTEN CONSENT

Captiva is furnishing this joint proxy statement/prospectus to Captiva
stockholders in connection with the solicitation of written consents from
Captiva stockholders in connection with the merger.  ActionPoint also is
furnishing this joint proxy statement/prospectus to Captiva stockholders as a
prospectus in connection with the issuance by ActionPoint of shares of
ActionPoint common stock in the merger.

Matters to be Acted Upon by Written Consent

Captiva stockholders will be asked to give their written consent:

- to approve the merger, pursuant to which Captiva will become a wholly-owned
subsidiary of ActionPoint, and the principal terms of the merger agreement by
and among ActionPoint, Condor Merger Corp. and Captiva;
- to approve the amendment and restatement of Captiva's articles of
incorporation to increase the number of authorized shares of Captiva common
stock from 70,000,000 to 440,000,000 and to make certain other adjustments to
facilitate the consummation of the merger; and
- to approve the Captiva 2002 equity incentive plan; and
- to approve an amendment to Captiva's amended and restated stock option/stock
issuance plan.

In addition, holders of Captiva preferred stock will be asked to give their
written consent to the conversion of all of the shares of Captiva preferred
stock into shares of Captiva common stock immediately prior to, and contingent
upon, the closing of the merger.

Board of Directors Recommendation

Captiva's board of directors has unanimously determined that the merger
is advisable and in the best interests of Captiva and its stockholders, has
unanimously approved the merger, the merger agreement and the related
transactions and recommends that Captiva's common and preferred stockholders
vote FOR the adoption and approval of the merger, the principal terms of
the merger agreement, the amendment and restatement of Captiva's articles of
incorporation, the adoption of the Captiva 2002 equity incentive plan and the
amendment to Captiva's amended and restated stock option/stock issuance plan and
that Captiva's preferred stockholders also vote FOR the conversion of all
shares of Captiva preferred stock into shares of Captiva common stock.

Record Date

Captiva's board of directors fixed the mailing date of this joint proxy
statement/prospectus as the record date for the action by written consent of the
stockholders of Captiva.  Accordingly, only stockholders of record of Captiva
common stock and Captiva preferred stock at the close of business on the mailing
date of this joint proxy statement/prospectus are entitled to act by written
consent in connection with the matters described in this joint proxy
statement/prospectus.

Stockholders Entitled to Vote

At the close of business on the record date, there were             
shares of Captiva common stock outstanding and entitled to vote held by
approximately               stockholders
of record and                           shares
of Captiva preferred stock outstanding and entitled to vote held by
approximately                          stockholders of record.

The holders of Captiva common stock are entitled to one vote for each share
they hold on each matter submitted to the Captiva common stockholders for action
by written consent.  On each matter submitted to the holders of Captiva
preferred stock for action by written consent, other than the merger and the
principal terms of the merger agreement, the holders of Captiva preferred stock
are entitled to vote on an as-if converted to common stock basis, which means
they are entitled to one vote for each share of Captiva common stock that they
are entitled to receive upon conversion of their shares of preferred stock.  On
the merger matter and the principal terms of the

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Vote Required

Approval of the merger, the principal terms of the merger agreement and
the amendment and restatement of Captiva's articles of incorporation requires
the affirmative vote of a majority of the outstanding shares of Captiva common
stock, voting as a separate class, and the holders of a majority of the
outstanding shares of Captiva Series A preferred stock, Series B preferred
stock, Series C preferred stock, Series D preferred stock and Series E preferred
stock, each voting separately as a series.  Approval of the adoption of the
Captiva 2002 equity incentive plan and the amendment to Captiva's amended and
restated stock option/stock issuance plan requires the affirmative vote of a
majority of the outstanding shares of Captiva common stock and Captiva preferred
stock, voting together as a single class, with the shares of Captiva preferred
stock voting on an as-if converted to common stock basis.  Approval of the
conversion of the shares of Captiva preferred stock into shares of Captiva
common stock requires the approval of the holders of the majority of the
outstanding shares of Captiva preferred stock voting together as a single class
on an as-if-converted to common stock basis.

Failure to return a signed written consent to Captiva will have the same
effect as a vote AGAINST the matters submitted for approval to the
Captiva stockholders.

Revocability of Action By Written Consent

The stockholder actions on which you are being asked to act by written
consent will be effective at the time when written consents sufficient to take
the required corporate action have been filed with the corporate secretary of
Captiva.  You may revoke your written consent at any time prior to the effective
time of the stockholder action by delivering to the secretary of Captiva at the
address set forth below a signed written revocation or a later-dated, signed
written consent.

All written notices of revocation and other communications with respect to
revocation of written consents should be addressed to Captiva Software
Corporation, 10145 Pacific Heights Blvd, San Diego, CA 92121, Attention: Rick
Russo.

Dissenters' Rights

If the principal terms of the merger agreement are approved by the
Captiva stockholders, holders of Captiva shares who elect to dissent from the
approval of the principal terms of the merger agreement may, under certain
circumstances, be entitled to have their shares purchased in accordance with
Chapter 13 of the California General Corporation Law.

In order for a Captiva stockholder to exercise dissenters' rights, a notice
of such stockholder's intention to exercise his, her or its dissenters' rights
must be sent by such stockholder and such stockholder must comply with such
other procedures as required to perfect the holder's rights by the California
General Corporation Law, as more fully described below in "The Merger
Agreement-Appraisal and Dissenters' Rights."  Failure to send such notice
or to follow such other procedures will result in the waiver of such
stockholder's dissenters' rights.  These procedures are complicated; you are
urged to see the discussion on page 72 regarding dissenters' rights and
Annex Dfor a description of the procedures that must be
followed to perfect such rights.

Solicitation of Written Consents and Expenses

All expenses of this solicitation of written consents and all the cost of
preparing and mailing this joint proxy statement/prospectus to Captiva
stockholders will be borne by Captiva.  In addition to solicitation by mail,
written consents may be solicited from Captiva stockholders by directors,
officers and employees of Captiva in person or by telephone, telegram, fax, e-
mail or other means of communication.  Such directors, officers and employees
will not be additionally compensated, but may be reimbursed for reasonable out-
of-pocket expenses in connection with such solicitation.

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Please do
not send in your stock certificates with your written consent.  Written
instructions for exchanging your Captiva stock certificates will be mailed to
you at a later time after the merger is completed.

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THE MERGER

This section of this joint proxy statement/prospectus describes
material aspects of the merger, including the merger agreement. Although the
description covers the material terms of the merger and the related
transactions, this summary may not contain all of the information that is
important to ActionPoint stockholders and Captiva stockholders. You should
carefully read the merger agreement and the other documents to which you are
referred in their entirety for a more complete understanding of the merger.

Background of the Merger

In recent years, as a part of the continuous evaluation of its business,
ActionPoint has regularly considered a variety of strategic initiatives and
transactions with a view toward increasing stockholder value.  ActionPoint has
explored different strategic alternatives, including the consideration of
certain acquisitions, dispositions or commercial relationships.

Since 1998, ActionPoint and Captiva have cooperated to provide interoperable
products for customers seeking to purchase both ActionPoint's document capture
software and Captiva's forms processing software.  Captiva became part of the
InputAccel Certified Partners Program in 1999, and the two companies have
jointly provided information capture software solutions to several customers
since that time.

In May 2001, upon learning of the sale by ActionPoint of its Dialog server
business, Captiva's chief executive officer, Reynolds Bish, contacted Kimra
Hawley, who was then the ActionPoint's chief executive officer, to determine
whether there was any interest in a combination of ActionPoint and Captiva.

Between July 2001 and late October 2001, ActionPoint's chief executive
officer, Stephen Francis, and chief financial officer, John Finegan, and
Captiva's chief executive officer, Reynolds Bish, and chief financial officer,
Rick Russo, had preliminary and informal discussions regarding the business
rationale for possibly combining the two businesses.  On August 22, 2001, the
parties entered into a confidentiality agreement to facilitate the discussion of
a possible business combination and the exchange of information related to the
respective businesses.  In these early discussions, the executives reviewed the
current business climate and the opportunities provided by a possible
combination of ActionPoint and Captiva.  Through these preliminary discussions,
Messrs. Bish and Francis concluded that there may be a strategic fit between the
business of ActionPoint and Captiva and that a possible business combination
should be further explored.

On October 25, 2001, Captiva's board of directors held its regular quarterly
meeting.  At that meeting, Mr. Bish presented a summary of the discussions with
ActionPoint to date, a summary of potential benefits and possible problems
presented by a merger with ActionPoint, summary historical financial data for
ActionPoint and Captiva and initial estimates of a possible valuation of the
combined company.

On November 2, 2001, Daniel Tompkins and Thomas Van Overbeek, as
representatives of ActionPoint's board of directors, met with Mel Lavitt and
James Berglund, representatives of Captiva's board of directors, to further
discuss business issues involved in a possible merger of their respective
companies.  The board representatives determined that further discussions should
be held.  On November 5 and 6, 2001, Messrs. van Overbeek, Tompkins and Finegan
of ActionPoint joined Messrs. Berglund and Lavitt of Captiva on a telephone
conference to discuss the possible business combination.

On November 9, 2001, at a special meeting of the board of directors of
ActionPoint, Mr. Francis and Mr. Finegan made a presentation to the other
members of the ActionPoint board of directors regarding the merits and risks
regarding a possible business combination with Captiva.  The full board
discussed the rationale for and risks associated with a possible business
combination and directed the management team to further explore a merger.

During the period from November 9, 2001 through about December 5, 2001,
ActionPoint and Captiva held a number of meetings and telephone conferences to
discuss possible terms of the business combination.

On November 13, 2001, Mr. Francis and Mr. Bish discussed the possible
business combination and the necessary business, legal, financial and accounting
due diligence efforts by both companies.  The executives

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On December 4, 2001, the board of directors of ActionPoint convened a special
meeting to review the possibility of a merger with Captiva.  Messrs. Bish,
Berglund and Lavitt of Captiva were present for part of this meeting at which
time Mr. Bish presented his strategic plan for the combined company.

On December 5, 2001, the board of directors of Captiva conducted a special
meeting during which Captiva's management briefed the board on the principal
terms and structure of the proposed transaction with ActionPoint, including the
fact that the transaction required the conversion of the existing Captiva
promissory notes into shares of Captiva common stock.  On the advice of
Captiva's outside counsel, Cooley Godward LLP, the board of directors of Captiva
appointed each of Messrs. Libit and Pendergast to serve on a special committee
to the board of directors for the purpose of negotiating the conversion of
Captiva's outstanding promissory notes on terms fair to the stockholders of
Captiva who are not holders of the notes.  See "The Note Conversion-Background
 of the Note Conversion" on page 89 for a full discussion of the
Captiva special committee and its activities.

Simultaneously with these discussions and meetings, ActionPoint's outside
legal advisor began preparing a draft merger agreement, which was initially
delivered to the parties on December 7, 2001.  Additional agreements related to
the merger agreement were delivered to the parties on December 12 and December
13, 2001.  During the period from December 7, 2001 through March 4, 2002,
ActionPoint held a series of meetings and telephone conferences with Captiva
primarily for the purposes of completing due diligence efforts and negotiating
the terms and conditions of the merger agreement and the related agreements.
During this period, significant negotiations were focused on the conversion of
Captiva's outstanding promissory notes, closing conditions, voting agreements,
termination rights, ActionPoint's rights and obligations relating to alternative
transactions and employment and benefit arrangements.

On December 11, 2001 Captiva engaged C. E. Unterberg, Towbin as an exclusive
investment banking and financial advisor with respect to possible business
combination transactions involving Captiva.  Under the C. E. Unterberg
engagement, Captiva agreed to pay C. E. Unterberg, Towbin a fee of $350,000 if
Captiva consummated a business combination transaction.  See "The Merger-Interests
 of C. E. Unterberg, Towbin" on page 57 for a full discussion of
certain relationships between Captiva and C. E. Unterberg, Towbin.

On December 13, 2001, ActionPoint engaged Pacific Crest Securities Inc. to
evaluate the proposed merger with Captiva. On December 17, 2001, representatives
of Pacific Crest Securities visited Captiva's offices in San Diego and met with
Mr. Russo and Mr. Bish to conduct its financial due diligence
investigations.

At the regularly scheduled meeting of ActionPoint's board of directors on
December 19, 2001, Mr. Francis and Mr. Finegan provided the board of directors
with an update regarding the proposed merger with Captiva.  Messrs. Francis and
Finegan also discussed their views of other strategic alternatives available to
ActionPoint.  The board of directors discussed the preliminary terms of the
proposed merger with Captiva, the issues to be resolved with Captiva and the
other strategic alternatives available to ActionPoint, before directing the
ActionPoint executives to continue negotiating with Captiva and simultaneously
to continue exploring other strategic alternatives.

On December 20, 2001, Mr. Francis received an inquiry from a privately held
company regarding the possible acquisition of ActionPoint by the privately held
company.  Mr. Francis and Mr. Finegan had a telephone discussion with the
President of the privately held company on December 21, 2001 to discuss the
expression of interest by the privately held company.

On December 26, 2001, at a special meeting of the ActionPoint board of
directors, Mr. Francis presented an update regarding the negotiation of the
proposed merger with Captiva and briefed the board of directors on his
preliminary discussions with the privately held company.  The board of directors
discussed the terms of the

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On January 3, 2002, the President of the privately held company and Mr.
Francis and Mr. Finegan met at ActionPoint's offices in San Jose, California to
discuss possible terms of an acquisition of ActionPoint by the privately held
company.

On January 11, 2002, at a special meeting of the ActionPoint board of
directors, the ActionPoint board reviewed the preliminary terms of the privately
held company's proposed acquisition of ActionPoint and the status of efforts
regarding other possible corporate transactions, including the proposed merger
with Captiva.  ActionPoint's executives advised the board of Captiva's request
that ActionPoint agree to negotiate exclusively with Captiva regarding a
strategic alternative and to reimburse certain of Captiva's expenses in the
event that ActionPoint enters into an alternate transaction.  Following a
discussion of the proposed expense reimbursement and ActionPoint's various
strategic alternatives, representatives of ActionPoint's outside counsel advised
the board of its fiduciary duties to ActionPoint and its stockholders in light
of the two proposed transactions.  Upon the advice of counsel and after
acknowledging the existence of possible conflicts of interest for certain board
members based on the differing preliminary terms of the two possible
transactions, the board discussed the need to form a special committee of
disinterested and independent directors of the ActionPoint board and unanimously
approved resolutions creating such a special committee consisting of ActionPoint
directors, Patrick Edsell and Bruce Silver.  The special committee was charged
with reviewing and evaluating all strategic alternatives available to
ActionPoint and recommending to the full board what action should be taken, if
any, with respect to the available alternatives.  The special committee was
authorized to engage its own outside counsel.  The members of the special
committee and the full board discussed the need to obtain the input of a
financial advisor to assist the special committee and the full board in
evaluating ActionPoint's strategic alternatives.  The board authorized and
directed the special committee to consult with Pacific Crest Securities
regarding such services and management to pursue discussions with Captiva and
the privately held company and other parties to better enable the board to
evaluate the possible transactions.   The board also authorized the special
committee to negotiate with Captiva regarding an expense reimbursement
agreement.

On January 13, 2002, at a meeting of the ActionPoint board's special
committee, the special committee engaged Wilson Sonsini Goodrich & Rosati as
outside legal counsel to assist the special committee.

On January 15, 2002, ActionPoint and Captiva entered into an expense
reimbursement agreement whereby ActionPoint agreed to reimburse certain of
Captiva's expenses in the event that ActionPoint, under certain circumstances,
engages in an alternate transaction in exchange for Captiva's agreement to
continue to negotiate the terms of the proposed merger of Captiva and
ActionPoint.  ActionPoint declined Captiva's request for ActionPoint to
negotiate exclusively with Captiva.

On January 16, 2002, at a meeting of the ActionPoint board's special
committee, the special committee met with its counsel and discussed reasons for
the formation of the special committee and the duties, responsibilities and
obligations of the special committee to ActionPoint in its review and
consideration of the various proposed business combinations and transactions.
The special committee discussed the current state of the proposed merger with
Captiva.  The special committee authorized its counsel to enter into
negotiations with Pacific Crest Securities to amend the engagement letter
between the parties so that Pacific Crest Securities' fee would be the same for
the Captiva transaction as any other transaction.

On January 18, 2001, at a meeting of the ActionPoint board's special
committee, the special committee discussed with Mr. Francis and Mr. Finegan the
status of ActionPoint's strategic alternatives.  Mr. Francis addressed the
proposed merger with Captiva, the proposed acquisition by the privately held
company and other potential business combinations.  The special committee and
the other participants discussed the relative merits and risks of each
transaction; and the special committee recommended that ActionPoint continue
talks with Captiva, the privately held company and other potential partners.
Representatives of Pacific Crest Securities discussed the timing and fees
related to its fairness opinion and stated that, after negotiations with the
special committee's counsel, these terms would be "neutral" between
all transactions being considered by the special committee.

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On January 21, 2002, in response to discussions with the privately held
company, ActionPoint and Pacific Crest Securities amended their existing
investment banking relationship to clarify and broaden Pacific Crest Securities'
role to include advising ActionPoint's board and special committee in their
efforts to review and evaluate the corporate transaction alternatives available
to ActionPoint.

Between January 11 and January 30, 2002, ActionPoint's executives and
representatives of the privately held company, together with their financial and
legal advisors, held numerous meetings and telephone conferences to negotiate
the principal terms and conditions of the proposed acquisition and for the
privately held company to conduct its financial, legal and accounting due
diligence review of ActionPoint.

On January 24, 2002, at a meeting of the ActionPoint board's special
committee, the special committee discussed the status of the strategic
alternatives available to ActionPoint.

On January 28, 2002, the board of directors of Captiva conducted a regular
quarterly meeting at the headquarters of Captiva in San Diego, California.
Representatives of Cooley Godward LLP, Captiva's outside legal counsel, were
also present at the meeting.  At the meeting the board discussed in detail the
proposed terms and current status of the negotiations with ActionPoint.  The
board reviewed the status of the draft merger agreement and instructed the
management of Captiva to proceed with the transaction contingent upon the
satisfactory resolution of a number of outstanding issues, including the
increase in the termination fee payable in the event of a competing proposal.
Also on January 28, 2002, the special committee to the board of directors of
Captiva finalized the negotiations of the note conversion price and reported to
the full board that the special committee was prepared to recommend to the full
board the terms of the note conversion.

On January 30, 2002, at a meeting of the ActionPoint board's special
committee, the special committee met with senior management of the privately
held company, who gave a presentation and answered questions from the special
committee regarding the privately held company and its proposal to acquire
ActionPoint.

On January 30, 2002, the board of directors of Captiva together with the
special committee to the board conducted a joint special telephonic meeting.
Representatives of Houlihan Lokey, financial advisor to the special committee,
made a presentation to the special committee in the presence of the full board
regarding the financial aspects of the proposed note conversion in connection
with the merger with ActionPoint.  Representatives of Houlihan Lokey orally
advised the special committee and the full board that the proposed terms of the
note conversion are fair, from a financial point of view, to the stockholders of
Captiva who are not holders of the notes.  Following the presentation of
Houlihan Lokey, the special committee recommended to the full board that the
full board may proceed with the proposed transaction with ActionPoint on the
terms of the note conversion as recommended by the special committee.
Subsequently, the board of directors discussed the current status of the
negotiations with ActionPoint, and Captiva's management reported to the board on
the outcome of the negotiations of the outstanding open issues.  After the
discussion, the full board of directors of Captiva approved the proposed
transaction with ActionPoint, subject to the satisfactory completion of all
final documents related to the transaction.

On January 31, 2002, at a meeting of the ActionPoint board's special
committee, the special committee, in anticipation of a special meeting of the
ActionPoint board of directors to be held later that day, reviewed the status of
the various strategic alternatives available to ActionPoint.  Representatives
from Pacific Crest Securities reviewed and compared the financial terms of the
proposals from Captiva and the privately held company.

On January 31, 2002, at a special meeting of the ActionPoint board of
directors and the board's special committee, Mr. Francis, Mr. Finegan and
representatives of ActionPoint's outside counsel provided the board with an
update regarding the negotiation of the Captiva and the privately held company
transactions and other available strategic alternatives.  Representatives of
Pacific Crest Securities made a presentation to the ActionPoint board and
special committee regarding financial matters relating to the proposed business
combination with Captiva and the possible acquisition by the privately held
company.  Following discussion, the special committee authorized and directed
ActionPoint's executives to pursue the negotiation of a definitive acquisition
agreement with the privately held company, continue to negotiate the terms of
the merger agreement with Captiva and to pursue any other possible strategic
alternatives.

Between February 1 and February 12, 2002, the ActionPoint executives and Mr.
Bish continued to have limited discussions regarding the terms of the proposed
business combination.

44

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The privately held company's counsel provided ActionPoint with a draft
acquisition agreement on February 4,  2002 and representatives of the
privately held company and its legal advisors visited ActionPoint's San Jose,
California office to meet with representatives of ActionPoint and undertake an
extensive business, legal, accounting and financial due diligence investigation
of ActionPoint that continued until February 8, 2002.  In connection with
the discussions, the privately held company proposed, subject to due diligence
results and contractual terms, such as closing conditions, termination rights,
termination fees, liquidated damages, and operational restrictions, satisfactory
to it, to acquire ActionPoint for consideration consisting of cash, in an amount
which is approximately equal to ActionPoint's expected cash position at the end
of the second quarter of 2002, and shares of stock of a publicly traded company
to be delivered by the privately held company.  The privately held company did
not control the publicly traded company and it was unclear whether the privately
held company could deliver shares of the public company that would be freely
tradable by ActionPoint's stockholders.  The conditional consideration proposed
by the privately held company was subject to potentially significant downward
adjustments based on ActionPoint's working capital and cash balances at the time
of the closing of the proposed acquisition.

Mr. Finegan and ActionPoint's legal advisors met with the privately held
company's chief financial officer and the privately held company's legal
advisors on February 7 and February 8, 2002 at ActionPoint's outside counsel's
offices in Menlo Park, California to negotiate the terms and conditions of the
acquisition agreement and the related transaction documents.  During this
period, significant discussions were focused on, among other things:

- the ability of the privately held company to cause the third party public
company to issue freely tradable shares of its stock in a timely fashion in
connection with the proposed acquisition of ActionPoint;
- whether the ActionPoint stockholders or the privately held company would
bear the risk of the failure of the public company to issue freely tradable
shares in a timely manner;
- closing conditions;
- termination rights;
- ActionPoint's rights and obligations relating to alternative transactions;
and
- employment and benefit arrangements.

On February 7 and February 8, 2002, at special meetings of the ActionPoint
board, management and outside legal counsel for ActionPoint provided the board
members with updates regarding the negotiation of the proposed acquisition of
ActionPoint by the privately held company and other potential strategic
alternatives being considered by ActionPoint.

Between February 8 and February 12, 2002, representatives of ActionPoint and
the privately held company held a number of telephone conferences to further
discuss these open issues and other terms of the proposed acquisition.

On February 12, 2002, at a meeting of the ActionPoint board's special
committee, the special committee, after reviewing the strategic alternatives
available to ActionPoint, decided to preliminarily recommend that ActionPoint
pursue the merger with Captiva, subject to certain conditions.  Representatives
of Pacific Crest Securities confirmed that it believed it would be able to
provide ActionPoint with a written fairness opinion upon signing of a definitive
merger agreement with Captiva based on the financial terms then under
discussion.

On February 12, 2002, at a special meeting of the ActionPoint board of
directors and the board's special committee, ActionPoint's executives provided
the board and special committee members with an update regarding the proposed
strategic transactions with Captiva and the privately held company and potential
transactions with additional parties.  Following discussion, the special
committee advised the full board that, subject to the finalization of a
definitive merger agreement and the appropriate resolution of issues related to
the post-transaction management team, it recommended that ActionPoint pursue the
merger with Captiva.  The special
committee reported that its recommendation to pursue the merger with Captiva was
based upon, among other relevant factors, the following factors:

45

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- ActionPoint's historical and projected financial performance and
prospects,
- Captiva's historical and projected financial performance and prospects,
- the historical financial performance for the shares of the publicly traded
company offered by the privately held company,
- ActionPoint's stock price,
- benefits, risks and synergies of each potential transaction,
- the certainty of consummating any of the potential transactions, including
the privately held company's ability to deliver registered shares of the
publicly traded company's stock,
- due diligence conducted on Captiva and the privately held company,
- the liquidity of the consideration to be received by ActionPoint's
stockholders in each potential transaction, including the float and the volume
of trading in the shares of the publicly traded company offered by the privately
held company,
- the potential for ActionPoint's stockholders to participate in the further
growth and any increases in value in each potential transaction,
- the structure and timing of each potential transaction,
- confidence in Captiva's management, and
- the history of negotiations between the parties.

Based on the recommendation of the special committee, the ActionPoint board
authorized and directed management to finalize the merger agreement and related
agreements with Captiva for the review of the special committee and the full
board.

On February 12, 2002, Mr. Francis informed the president of the privately
held company that ActionPoint would be pursuing other alternatives and
terminated the discussion with the privately held company.

Between February 12 and March 1, 2002, representatives of ActionPoint and
Captiva continued to finalize the remaining open issues in the merger agreement
and related agreements.  During this period, senior management of both companies
held numerous discussions regarding various business, financial, operational and
technical issues involved in combining the companies.

On March 1, 2002, the board of directors of Captiva conducted a special
telephonic meeting at which Captiva's management reported on the status of the
documentation for the proposed transaction with ActionPoint.  Following a brief
discussion, the board of directors unanimously determined that the proposed
transaction with ActionPoint is consistent with and in furtherance of the long-
term business strategy of Captiva and fair to, and in the best interests of,
Captiva and its stockholders, and directed management to execute the final
transaction documents as soon as possible.

On March 1, 2002, at a meeting of the special committee of the board of
directors of ActionPoint, in anticipation of a special meeting of the
ActionPoint board of directors to be held later that day, the special committee discussed
the status of the proposed merger with Captiva and the documents related to the
in detail merger.

On March 1, 2002, at a special meeting of the board of directors of
ActionPoint that was also attended by counsel to the special committee,
representatives of ActionPoint's outside counsel provided the ActionPoint board
with a detailed presentation regarding the material terms of the merger
agreement and the related transaction documents, including a discussion of open
issues.  The board's questions regarding the agreement were answered and the
significant risks involved with the merger, including, among other concerns, the
certainty of closing and

46

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Representatives of Pacific Crest Securities provided the board with a
preliminary presentation explaining the basis for its fairness opinion regarding
the proposed transaction with Captiva and informed the board and the special
committee that Pacific Crest Securities was prepared to deliver the fairness
opinion upon the request of the board and the special committee.  The
ActionPoint board then adjourned to allow its members to consider the terms of
the merger prior to the next special meeting of the board then scheduled for
March 4, 2002.

On March 4, 2002, at a special meeting of the board of directors of
ActionPoint, the ActionPoint directors reviewed the principal terms of the
merger agreement and related transaction documents as negotiated to date,
including the resolution of the remaining open issues, and received a fairness
opinion from Pacific Crest Securities stating that the exchange ratio in the
merger is fair, from a financial point of view, to the holders of ActionPoint
common stock.  Following the presentation of the fairness opinion, the board
adjourned temporarily to allow the special committee to consider the proposed
merger.  When the board meeting reconvened, the members of the special committee
unanimously recommended to the full board that ActionPoint enter into the
proposed merger with Captiva.  After discussion, the full board unanimously
concluded the proposed merger with Captiva is consistent with, and in
furtherance of, the long-term business strategy of ActionPoint and fair to, and
in the best interests of, ActionPoint and ActionPoint's stockholders and adopted resolutions
approving and adopting the merger agreement, the related transaction documents
and the issuance of ActionPoint common stock in the merger, and other actions by
management necessary to consummate the merger.  The board also unanimously
determined to recommend to ActionPoint's stockholders that they approve the
issuance of shares in connection with the merger.

Following the March 4, 2002 meeting of the ActionPoint board, representatives
of ActionPoint and Captiva finalized the provisions of the merger agreement and
related transaction documents.  The merger agreement, voting agreements, an
amendment to ActionPoint's rights agreement, lock-up agreements, the agreement
to amend Captiva's outstanding promissory notes and other related agreements
were executed and delivered by all parties that afternoon, following the close
of the public trading market.  That afternoon, ActionPoint and Captiva also
issued a joint press release announcing their agreement to merge.

Joint Reasons for the Merger

The ActionPoint board of directors and the Captiva board of directors
each believe that the combined company will have greater potential for financial
strength, market power and growth than either ActionPoint or Captiva would have
on its own.  The ActionPoint board of directors and its special committee and
the Captiva board of directors identified a number of more specific potential
benefits from the merger that they believe could contribute to the success of
the combined company and thus benefit stockholders of both companies, including
the following:

- the merger may enhance the opportunity for the potential realization of the
strategic objective of the combined company to expand its market share and
increase the combined company's ability to compete effectively in the
information capture software market;
- the merger may provide the combined company with the opportunity to expand
its product offerings which could increase its global customer base to obtain
advantages and efficiencies in the marketing, selling and pricing of its
products and to achieve profitability;
- the merger may provide the opportunity for certain operational cost
efficiencies for the combined company; and
- the combined company will have an experienced management team that has the
breadth and depth to effectively lead and manage the combined company's
growth.

ActionPoint's Reasons for the Merger

In reaching their respective conclusions to approve and adopt the merger
and the merger agreement, the ActionPoint board of directors and its special
committee considered the factors described above under "Joint

47

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- enabling ActionPoint to strengthen its industry leadership position and
global presence by capitalizing on Captiva's offerings, thereby enhancing the
products and services available to ActionPoint's customers;
- enhancing ActionPoint's technical and sales staff with Captiva's experienced
technical and sales personnel;
- capitalizing on complementary customer bases with limited overlap, to cross-
sell ActionPoint's products and services to Captiva's core markets and to cross-
sell Captiva's products to ActionPoint's core markets;
- enhancing ActionPoint's global sales presence by adding Captiva's
international sales force; and
- increasing the outstanding number of shares of ActionPoint common stock and
thereby potentially increasing the trading volumes for ActionPoint common stock
and the liquidity of the stock for investors.

The ActionPoint board and its special committee reviewed a number of factors
in evaluating the merger, including, but not limited to, the following:

- historical information concerning ActionPoint's and Captiva's respective
businesses, financial performance and condition, operations, technology and
management;
- ActionPoint's management's view of the financial condition, results of
operations, businesses and future prospects of ActionPoint and Captiva before
and after giving effect to the merger;
- current financial market conditions and historical market prices for
ActionPoint's common stock, volatility and trading information;
- the determination of Captiva's affiliates to enter into lock-up agreements
restricting the sale of newly issued ActionPoint common stock during the 180-day
period following the effective time of the merger;
- the determination of Captiva's chief executive officer and chief financial
officer to enter into employment agreements with ActionPoint;
- the opinion of Pacific Crest Securities that, as of the date of its opinion
and subject to the assumptions made, matters considered and limitations on the
review undertaken in connection with the opinion, the exchange ratio in the
merger is fair, from a financial point of view, to the holders of ActionPoint
common stock;
- the terms and conditions of the merger agreement and related
agreements;
- the belief that the terms of the merger agreement and related agreements are
reasonable;
- the anticipated impact of the merger on the combined company's customers and
employees; and
- the results of the due diligence investigation of Captiva conducted by
ActionPoint's management and its financial and legal advisors.

The ActionPoint board and its special committee also identified and
considered a number of potentially negative factors in its deliberations
concerning the merger, including the following:

- the risk that the potential benefits and synergies of the merger may not be
realized;
- the possibility that the merger may not be consummated;
- the potential loss of revenues and business opportunities for ActionPoint as
a result of initial confusion in the marketplace for ActionPoint's and Captiva's
products following the announcement of the merger, and the possible exploitation
of such confusion by ActionPoint's and Captiva's competitors;
- the negative impact on the combined company's earnings as a result of
accounting charges resulting from any possible deferred compensation charge
based on any unvested and in-the-money Captiva option grants assumed by
ActionPoint;
- the negative impact on earnings, resulting from the amortization of certain
intangible assets purchased in the merger;
- the negative impact on the combined company's balance sheet as a result of
the assumption of Captiva's liabilities in the merger, and uncertainty of the
perception of the weakened balance sheet in the financial community, including
among investors and stockholders which may make it difficult for the combined
company to obtain debt or equity financing in the future;
- the risk of management and employee disruption associated with merging two
equally-sized organizations, including the risk that, despite the efforts of the
combined company, key technical, sales and management personnel might not remain
employed by the combined company, especially given the competition for quality
personnel in the industry, particularly in ActionPoint's and Captiva's
respective geographical locations; and
- other applicable risks described in this joint proxy statement/prospectus
under "Risk Factors."

ActionPoint's board and its special committee concluded that certain of these
risks were unlikely to occur, while others could be avoided or mitigated by the
combined company, and that, on balance, the merger's potential benefits to
ActionPoint and its stockholders outweighed the potential risks.  The discussion
of the information and factors considered by ActionPoint's board and its special
committee is not intended to be exhaustive.  In view of the variety of factors
considered in connection with its evaluation of the merger, ActionPoint's board
and its special committee did not find it practicable to, and did not, quantify
or otherwise assign relative weight to the specific factors considered in
reaching their determination.

Recommendation of the Board of Directors of ActionPoint

For the
reasons discussed above, the ActionPoint board has unanimously approved and
adopted the merger, the merger agreement and the transactions contemplated
thereby and believes that the terms of the merger are fair to, and in the best
interests of, ActionPoint and its stockholders.  The ActionPoint board of
directors unanimously recommends that ActionPoint's stockholders vote FOR the
approval of the issuance of the shares of ActionPoint common stock to be issued
in connection with the merger.

Opinion of ActionPoint Financial Advisor

Pacific Crest Securities Inc. was retained to act as financial advisor to
ActionPoint in connection with the merger.  Pursuant to Pacific Crest
Securities' engagement letter with ActionPoint, Pacific Crest Securities
rendered a written opinion to the ActionPoint board of directors and special
committee on March 4, 2002, that, based upon and subject to the considerations
and limitations set forth in its opinion, as of that date, the exchange ratio
was fair, from a financial point of view, to the holders of ActionPoint common
stock.

Pacific Crest Securities' opinion along with the presentation of Pacific
Crest Securities to the ActionPoint board of directors and special committee,
was one of many factors taken into consideration by the ActionPoint board of
directors and special committee in making its decision to approve the merger and
actions related to the merger. The terms of the merger were determined through
negotiations between ActionPoint and Captiva executives, and were approved by
the ActionPoint board of directors and special committee.  Although Pacific
Crest Securities provided advice to ActionPoint during the course of
negotiations, the decision to enter into the merger agreement

49

---

The full text of Pacific Crest Securities' opinion, which sets forth the
assumptions made, general procedures followed, matters considered and
limitations on the review undertaken by Pacific Crest Securities, is attached to
this joint proxy statement/prospectus as Annex B.  The summary of Pacific
Crest Securities' opinion set forth below is qualified in its entirety by
reference to the full text of the opinion.  Stockholders are urged to read
Pacific Crest Securities' opinion carefully and in its entirety.

In connection with rendering its opinion, Pacific Crest Securities, among
other things:

- reviewed a draft of the merger agreement dated February 27, 2002;
- held discussions with certain senior officers and other representatives and
advisors of ActionPoint and Captiva concerning the businesses, operations and
prospects of ActionPoint and Captiva;
- examined certain business and financial information relating to ActionPoint
and Captiva and the industries in which they operate;
- reviewed financial forecasts and information relating to certain strategic
implications and operational benefits anticipated to result from the merger and
other information and data regarding ActionPoint and Captiva that were provided
to Pacific Crest Securities or otherwise discussed with Pacific Crest Securities
by management of ActionPoint and Captiva;
- reviewed the financial terms of the merger as set forth in the draft merger
agreement provided to it in relation to, among other things, current and
historical market prices and trading volumes of ActionPoint common stock, the
historical and projected earnings and other operating data of ActionPoint and
Captiva, and the historical and projected capitalization and financial condition
of ActionPoint and Captiva;
- analyzed certain financial, stock market, economic and other publicly
available information relating to the businesses of other companies whose
operations Pacific Crest Securities considered relevant in evaluating those of
ActionPoint and Captiva; and
- conducted such other analyses and examinations and considered such other
information and financial, economic and market criteria as Pacific Crest
Securities deemed appropriate in arriving at its opinion.

In its review and analysis and in arriving at its opinion, Pacific Crest
Securities assumed and relied upon, without assuming any responsibility for
independent verification, the accuracy and completeness of all of the financial
and other information and data publicly available or furnished to, discussed
with or otherwise reviewed by or for it.  With respect to financial forecasts
and information relating to certain strategic implications and operational
benefits anticipated to result from the merger provided to or otherwise reviewed
by or discussed with Pacific Crest Securities regarding ActionPoint and Captiva,
Pacific Crest Securities was advised by the management of ActionPoint and
Captiva that such forecasts and other information had been reasonably prepared
on bases reflecting the best then currently available estimates and judgments of
ActionPoint and Captiva management, as the case may be and that such forecasts
and other information do not include any expenses associated with amortization
of intangible assets or certain one-time expenses arising in connection with the
merger.  Pacific Crest Securities assumed that the operational benefits
anticipated to result from the merger would be realized in the amounts and
during the time periods contemplated by the ActionPoint and Captiva management.
Pacific Crest Securities expressed no view with respect to such forecasts and
other information or the assumptions on which they were based. Pacific Crest
Securities assumed that the merger will be treated as a tax-free reorganization
for United States federal income tax purposes.  Pacific Crest Securities did not
make and was not provided with an independent evaluation or appraisal of the
assets or liabilities (contingent or otherwise) of ActionPoint or Captiva, nor
did it make any physical inspection of the properties or assets of ActionPoint
or Captiva.

The financial information provided to Pacific Crest Securities included synergy estimates.
 The estimates of achievable synergies and timing of the realization of such synergies
were based on numerous estimates, assumptions

50

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The basis for believing that synergies would provide incremental revenues included
management's view that (1) the combined company's product offering will be a more attractive
solution for prospective customers than the respective individual product offerings of
ActionPoint and Captiva, and (2) the combined company will have the ability to more
effectively sell its products to each of ActionPoint's and Captiva's installed base.
[Management reduced the anticipated incremental revenues to the extent of any anticipated
costs that are expected to be required to generate those incremental revenues.]
Cost savings were projected to occur as a result of the business combination based on
(1) the combined company's ability to eliminate staffing redundancies,
(2) the reduced marketing costs that will be incurred by the combined company relative to
the aggregate marketing costs that are currently incurred by ActionPoint and Captiva, and
(3) the reduced cost of goods for license fees paid to third party technology providers
as the combined company's technology will reduce the need for third party technology.

Management's synergy estimates are projections based principally on its reasoned judgment
and beliefs regarding the potential to effectively integrate ActionPoint and Captiva.
Despite the efforts of the management teams to provide reasonable estimates, the integration
of the two companies is inherently complex and may involve unforeseeable difficulties that
could materially reduce the combined company's ability to realize the projected synergies.
Actual results may vary from the synergy estimates and the variations in
amounts and timing may be material.

Pacific Crest Securities assumed that the representations and warranties of
each party contained in the merger agreement were true and correct in all
material respects and that each party will perform all of the covenants and
agreements required to be performed by it under the merger agreement.
ActionPoint advised Pacific Crest Securities, and Pacific Crest Securities
assumed, that the final terms of the merger agreement would not vary materially
from those set forth in the draft provided to it.  Pacific Crest Securities
further assumed that the merger would be consummated in accordance with the
terms of the merger agreement without waiver of any of the conditions precedent
to the merger contained in the merger agreement.  Pacific Crest Securities also
assumed that all material governmental, regulatory and other consents and
approvals will be obtained and that in the course of obtaining any necessary
governmental, regulatory and other consents and approvals, or any amendments,
modifications or waivers to any documents to which either ActionPoint or Captiva
is a party, no restrictions will be imposed or amendments, modifications or
waivers made that would have any material adverse effect on its analysis.

Pacific Crest Securities' opinion relates to the relative values of
ActionPoint and Captiva. It does not imply any conclusion as to the likely
trading range for ActionPoint common stock following the announcement or
consummation of the merger, which range may vary depending upon, among other
factors, changes in interest rates, dividend rates, market conditions, general
economic conditions and other factors that generally influence the price of
securities.  Pacific Crest Securities was not requested to consider for the
purpose of rendering its opinion, and its opinion did not address, the relative
merits of the merger as compared to any alternative business strategies that
might exist for ActionPoint or the effect of any other transaction in which
ActionPoint might engage.  Pacific Crest Securities' opinion necessarily was
based on information available to it and financial, stock market, economic and
other conditions and circumstances disclosed to it as they existed and could be
evaluated as of the date of its opinion.  Pacific Crest Securities assumed no
responsibility to update or revise its opinion based on circumstances or events
occurring after March 4, 2002.

Pacific Crest Securities' advisory services and opinion were provided for the
information of ActionPoint's board of directors, including the special
committee, in its evaluation of the proposed merger and do not constitute a
recommendation of the merger to ActionPoint or its stockholders, nor do they
constitute a recommendation to any stockholder as to how such stockholder should
vote on any matter relating to the merger.

In connection with rendering its opinion, Pacific Crest Securities made
presentations to the ActionPoint board of directors and special committee on
March 1, 2002 and on March 4, 2002, with respect to the material financial and
comparative analyses performed by Pacific Crest Securities in evaluating the
fairness of the exchange ratio.  The

51

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Synergies.  Pacific Crest Securities reviewed the synergy estimates
provided by the management of ActionPoint and Captiva.  The synergy estimates
were prepared by the management of ActionPoint and Captiva to reflect the
incremental benefits anticipated to result from the merger.  The following table
shows the forecasts of anticipated incremental revenue, cost savings, and
operating synergies used in the analysis.

`Actual             Projected Calendar Years
                                            ---------  ------------------------------------------
                                                                   (in Millions)
                                              2001       2002       2003       2004       2005
                                            ---------  ---------  ---------  ---------  ---------
Estimated Synergies Associated with:                                                    
Operating Profit Resulting from Incremental
Revenue....................................    NM          $0.3       $0.5       $0.6       $0.7
Cost Savings...............................    NM          $0.5       $2.0       $2.0       $2.0
                                            ---------  ---------  ---------  ---------  ---------
  Total Estimated Synergies................    NM          $0.8       $2.5       $2.6       $2.7
                                            =========  =========  =========  =========  =========`

Pacific Crest Securities estimated the present value of the anticipated cash
flow effect of the estimated synergies as of the transaction closing date, by
applying discount rates reflecting a weighted average cost of capital ranging
from 33% to 37% per annum to cash flow effects for a four-year period after the
date of completion of the
transaction and by adding a terminal value determined
by applying a free cash flow multiple of 2.8x to 4.5x.  This analysis resulted
in a range of present values for ActionPoint stockholders' proportionate share
of the synergies of $7.0 million to $9.4 million, representing a range of
synergy value per share of ActionPoint common stock from approximately $0.80 to
$1.07.

Pro Forma Earnings Per Share Impact to ActionPoint.  Using certain
forecasts and estimates regarding ActionPoint and Captiva discussed with
management, Pacific Crest Securities performed an analysis of the estimated
impact of the merger on estimated ActionPoint earnings per share, or EPS, for
2002 and 2003, in each case on a pro forma basis.  For illustrative purposes,
Pacific Crest Securities also assumed that after-tax synergies of $0.8 million
would be realized in the 2002 calendar year and that pre-tax synergies of $2.5
million would be realized in the 2003 calendar year.  Based on this analysis,
the following table shows the accretion/dilution to the estimated 2002 and 2003
EPS of ActionPoint anticipated to result from the merger.

`EPS
                                                                              -------
                                                                        2002       2003
                                                                      ---------  ---------
Accretion/Dilution
---------------------
ActionPoint stand-alone.............................................     $0.27      $0.48
Captiva stand-alone.................................................     $0.42      $0.66
Combined entity pro-forma, excluding projected synergies (1) (2)....     $0.35      $0.57
Combined entity pro-forma, including projected synergies (1) (2)....     $0.59      $0.71
Accretion/(Dilution) to ActionPoint, excluding projected synergies..      28.2%      19.4%
Accretion/(Dilution) to ActionPoint, excluding projected synergies..     116.3%      50.2%`

______________________________

(1) Combined entity pro forma figures are on an ActionPoint share equivalent
basis, assuming an exchange ratio of one Captiva share for approximately 0.0156
of an ActionPoint share.

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(2) Excluding the amortization of intangible assets arising as a result of
the merger and excluding any merger related expenses that may be accounted for
as operating expenses or costs of goods.

Pacific Crest Securities also performed a synergy sensitivity analysis on
the results of its earnings impact analysis by varying the amount of pre-tax
synergies for the 2002 calendar year from zero to $0.8 million per year and for
the 2003 calendar year from zero to $2.5 million per year.  Based on this
analysis, the following table shows the accretion/dilution to the estimated 2002
and 2003 EPS of ActionPoint anticipated to result from the merger for varying
ranges of assumed synergies.

`EPS     Accretion
                                                                        2002     (Dilution)
                                                                      ---------  ---------
Earnings Per Share Impact Sensitivities
----------------------------------------
2002 ActionPoint stand-alone........................................     $0.27      N/A
2002 Combined entity pro-forma, including projected synergies (1) (2)
  Assuming no cost savings realized in calendar year................     $0.35       28.2%
  Assuming $0.4 million in synergies realized in calendar year......     $0.56      105.5%
  Assuming $0.8 million in synergies realized in calendar year......     $0.59      116.3%
2003 ActionPoint stand-alone........................................     $0.48      N/A
2003 Combined entity pro-forma, including projected synergies (1) (2)
  Assuming no cost savings realized in calendar year................     $0.57       19.4%
  Assuming $1.2 million in synergies realized in calendar year......     $0.62       31.2%
  Assuming $2.5 million in synergies realized in calendar year......     $0.71       50.2%`

______________________________

(1) Combined entity pro forma figures are on an ActionPoint share equivalent
basis, assuming an exchange ratio of one Captiva share for approximately 0.0156
of an ActionPoint share.

(2) Excluding the amortization of intangible assets arising as a result of
the merger and excluding any merger related expenses that may be accounted for
as operating expenses or costs of goods.

Valuation of Captiva.  Pacific Crest Securities performed a valuation
analysis of Captiva using the following methodologies: comparable public company
analysis and discounted cash flow analysis.  Each of these methodologies was
used to generate a reference enterprise value range for Captiva.  The enterprise
value range was adjusted for cash and debt to arrive at an equity value range.
The estimated equity value of Captiva was then used in the contribution analysis
to determine an implied exchange ratio.

Summary descriptions of each of the valuation methodologies noted above and
the estimated equity value ranges derived using each methodology are included in
the following table.

`Estimated
                                                                                                Equity Values
Valuation Methodology    Summary Description of Valuation Methodology                           (in millions)
---------------------    ---------------------------------------------                          ----------- 
Comparable Public        Market valuation benchmark based on the common stock trading
Company Analysis         multiples of selected comparable public companies                  $18.0 -   $21.9

Discounted Cash Flow     Net present valuation of after-tax cash flows using various risk-
Analysis                 adjusted present-value discount rates and terminal value
                         multiples                                                          $16.9 -   $28.8`

Comparable Public Company Analysis.  Pacific Crest Securities
calculated an estimated equity value range for Captiva using a comparable public
company analysis which compared selected financial data of Captiva with similar
data of selected public document management software companies.  The five
companies that Pacific Crest Securities used in its analysis are:

53

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- DocuCorp International, Inc.
- Documentum, Inc.
- FileNET Corporation
- Open Text Corporation
- ScanSoft, Inc.

Pacific Crest Securities selected these five companies principally on the basis of
various factors, including the similarity of their businesses to Captiva's line of business
and the availability of sufficient financial, operational and stock pricing data
to perform a meaningful analysis; however, no company
utilized in this analysis is identical to Captiva.  As a result, this analysis
is not purely mathematical, but also takes into account differences in financial
and operating characteristics of the subject companies and other factors that
could affect the public trading value of the subject companies to which Captiva
is being compared.

For each of these companies, Pacific Crest Securities calculated and analyzed
the multiples of enterprise value to revenues based upon actual results for the
year 2001 and published analyst estimates for the years 2002 and 2003.  The
enterprise value of each company was obtained by adding interest-bearing debt to
the market value of its common stock minus the cash balance.  The market value
of each company was calculated based on stock prices as of March 1, 2002.  The
companies and their multiples of enterprise value to revenues are detailed in
the following table.

`Revenue Multiple
                                               ----------------
                                         2001       2002       2003
                                      ----------  ---------  ---------
Comparable Public Company Range       1.3x-3.5x   1.2x-3.0x  1.9x-2.4x
Comparable Public Company Median      2.0x        1.3x       2.2x`

This analysis produced estimated equity values for Captiva ranging from $18.0
to $21.9 million.

Discounted Cash Flow Analysis.  Pacific Crest Securities calculated an
estimated equity value range for Captiva using a discounted cash flow analysis
of Captiva's after-tax free cash flows through 2005.  In conducting this
analysis, Pacific Crest Securities relied on projected cash flows for Captiva
that were provided by and discussed with the management of Captiva and
ActionPoint.  Captiva management provided forecasted financial plans that were based on
Captiva's recent financial trends and related expectations for the future.  ActionPoint
management reviewed these projections and adjusted them to be consistent with and reflect
its market knowledge.
The estimated free cash flows utilized assume a revenue growth
rate of 20% after 2002 and an operating profit margin of 15% in 2005.  Discount
rates of 35% to 45% and terminal 2005 revenue multiples of 0.8x to 1.2x were
used to generate a range of enterprise values and equity values for Captiva.
This analysis produced estimated equity values for Captiva ranging from $16.9 to
$28.8 million.

Contribution Analysis.  Pacific Crest Securities performed an analysis
comparing the relative contributions of ActionPoint and Captiva to the combined
pro forma company.  Using certain financial information regarding ActionPoint
and Captiva provided by and discussed with management, Pacific Crest Securities
reviewed each company's relative contribution to the combined company's actual
2001 and estimated 2002 and 2003 revenues and earnings before interest and
taxes, or EBIT, as well as the combined company's cash, employees and fully-
diluted equity value as of March 3, 2002 and derived a range of implied exchange
ratios from such contributions.  The following table sets forth the results of
Pacific Crest Securities' review.

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`Percentage
                                             Contribution       Implied
                                             -------------      Exchange
                          Period       ActionPoint   Captiva     Ratio
                       -------------   ---------   ---------  ---------
                                                              
Revenues.............  2001 Actual         47.6%       52.4%    0.0172
                       2002 Estimated      46.8%       53.2%    0.0178
                       2003 Estimated      46.4%       53.6%    0.0181

Operating Income.....  2001 Actual          N/A         N/A        N/A
                       2002 Estimated      34.4%       65.6%    0.0297
                       2003 Estimated      40.5%       59.5%    0.0229

Cash.................  Current             88.7%       11.3%    0.0020
Employees............  Current             44.8%       55.2%    0.0192
Equity Value.........  Current             33.4%       66.6%    0.0312`

In presenting this information to the ActionPoint board of directors and
special committee, Pacific Crest Securities noted that the proposed exchange
ratio of approximately 0.0156x was below the ranges of implied exchange ratios
derived from its revenues, operating income, employees and equity value
contribution analysis and higher than the range derived from its cash
contribution analysis.  Pacific Crest Securities informed the board that it
considered the range of implied exchange ratios derived from cash contribution
to be less relevant than the ranges derived from revenues and operating
income principally due to the projected profitability of the combined company.

Other Considerations.  The preceding discussion is a summary of the
material financial analyses furnished by Pacific Crest Securities to the
ActionPoint board of directors and special committee, but it does not purport to
be a complete description of the analyses performed by Pacific Crest Securities
or of its presentation to the ActionPoint board of directors and special
committee.  The preparation of financial analyses and fairness opinions is a
complex process involving subjective judgments and is not necessarily
susceptible to partial analysis or summary description.  Pacific Crest
Securities made no attempt to assign specific weights to particular analyses or
factors considered, but rather made qualitative judgments as to the significance
and relevance of all the analyses and factors considered and determined to give
its fairness opinion as described above.  Accordingly, Pacific Crest Securities
believes that its analyses, and the summary set forth above, must be considered
as a whole, and that selecting portions of the analyses and of the factors
considered by Pacific Crest Securities, without considering all of the analyses
and factors, could create a misleading or incomplete view of the processes
underlying the analyses conducted by Pacific Crest Securities and its
opinion.

In its analyses, Pacific Crest Securities made numerous assumptions with
respect to ActionPoint, Captiva, industry performance, general business,
economic, market and financial conditions and other matters, many of which are
beyond the control of ActionPoint and Captiva.  Any estimates contained in
Pacific Crest Securities' analyses are not necessarily indicative of actual
values or predictive of future results or values, which may be significantly
more or less favorable than those suggested by these analyses.  Estimates of
values of companies do not purport to be appraisals or necessarily to reflect
the prices at which companies may actually be sold.

Because these estimates are
inherently subject to uncertainty, none of ActionPoint, Captiva, the ActionPoint
board of directors, the
Captiva board of directors, Pacific Crest Securities or
any other person assumes responsibility if future results or actual values
differ materially from the estimates or are not achieved during the time periods
contemplated.  Pacific Crest Securities' analyses were prepared solely as part
of Pacific Crest Securities' analysis of the fairness of the exchange ratio in
the merger and were provided to the ActionPoint board of directors and special
committee in that connection.  The opinion of Pacific Crest Securities was only
one of the factors taken into consideration by the ActionPoint board of
directors in making its determination to approve the merger agreement and the
merger.  See the section entitled "The Merger-Recommendation of the Board
of Directors of ActionPoint" on page 49.

Interests of ActionPoint Financial Advisor

ActionPoint retained Pacific Crest Securities as its financial advisor and
exclusive placement agent to raise equity capital for ActionPoint
pursuant to a letter agreement dated April 14, 2000.
The original letter agreement was amended on October 10, 2000
to provide for Pacific Crest Securities to serve as financial advisor in connection
with the potential sale of all or part of ActionPoint. The original letter agreement was
amended on March 2, 2001 to

55

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Pacific Crest Securities is a recognized investment banking firm engaged in,
among other things, the valuation of businesses and their securities in
connection with mergers and acquisitions, leveraged buyouts, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes.  ActionPoint selected Pacific Crest Securities to act as its financial
advisor on the basis of Pacific Crest Securities' reputation and familiarity
with ActionPoint and its industry.
In the ordinary course of its business, Pacific Crest
Securities and its affiliates may actively trade or hold the securities of
ActionPoint for its own account and for the account of customers and,
accordingly, may at any time hold a long or short position in those securities.
Pacific Crest Securities and its affiliates may maintain relationships with
ActionPoint and Captiva and their respective affiliates after the completion of
the merger.

Captiva's Reasons for the Merger

The board of directors of Captiva believes that a business combination
with ActionPoint will advance its strategic objective to enhance Captiva's
leadership position in the marketplace. The Captiva board of directors has
determined that the merger and each of the related transactions are fair to, and
in the best interest of, Captiva and its stockholders.  The conclusion reached
by Captiva's board with respect to the following factors supported its
determination that the transaction with ActionPoint was fair to, and in the best
interests of, Captiva and its stockholders:

- the judgment, advice and analysis of Captiva's management with respect to
the potential strategic, financial and operational benefits of the proposed
transaction, including management's favorable recommendation of the transaction
based in part on the business, technical, financial, internal accounting and
legal due diligence investigation performed with respect to ActionPoint;
- the results of operations and financial condition of ActionPoint and
Captiva;
- the fact that the proposed transaction provides for the conversion of
Captiva's senior and convertible notes into shares of Captiva common stock and
without the proposed transaction the notes would have been due on March 29, 2002
and March 31, 2002, respectively;

- the recommendation of the special committee of the Captiva board of
directors that the proposed conversion rate for Captiva's promissory notes is
fair to the stockholders of Captiva who do not hold notes;
- the fact that the employees of Captiva will receive new stock options
and will have their existing stock options repriced in light of the dilutive
effect of the proposed note conversion on the common stockholders of Captiva;
and
- the terms of the merger agreement and related agreements, including the
exchange ratio and structure, which were considered by both the board of
directors and the management of Captiva to provide a fair and equitable basis
for the transaction.

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Captiva's board of directors also considered a number of potentially negative
factors in its deliberations concerning the transaction.  The potentially
negative factors considered by Captiva's board included:

- the risk that the transaction might not be completed in a timely manner
or at all;
- the general difficulties of integrating products, technologies and
companies;
- the negative impact of accounting charges resulting from:  (i)
amortization of intangible assets generated by the merger; (ii) the cost of
integrating the companies; and (iii) a potential deferred compensation charge
related to the assumption by ActionPoint of Captiva stock options in the merger;
- the possible employee disruption associated with the merger; and
- other applicable risks described in the section "Risk Factors"
on page 20 of this joint proxy statement/prospectus.

The above discussion of information and factors considered by Captiva's board
of directors is not intended to be exhaustive but is believed to include all
material factors considered by the board.  In view of the wide variety of
factors considered by Captiva's board of directors, the board did not find it
practicable to quantify or otherwise assign relative weight to the specific
factors considered.  In addition, Captiva's board did not reach any specific
conclusion on each factor considered, or any aspect of any particular factor,
but conducted an overall analysis of these factors.  Individual members of the
Captiva board may have given different weight to different factors.  However,
after taking into account all of the factors described above, Captiva's board of
directors determined that the merger agreement and the related transactions were
fair to, and in the best interest of, Captiva and its stockholders.

Recommendation of the Board of Directors of Captiva

Captiva's board of directors has unanimously determined that the merger is
advisable and in the best interests of Captiva and its stockholders, has
unanimously approved the merger, the merger agreement and the related
transactions and unanimously recommends that Captiva's common and preferred
stockholders vote FOR the adoption and approval of the merger, the principal
terms of merger agreement and the amendment and restatement of Captiva's
articles of incorporation, and that Captiva's preferred stockholders also vote
FOR the conversion of all of the shares of Captiva preferred stock into shares
of Captiva common stock.  In addition to the merger proposal and related
actions, Captiva's board of directors unanimously recommends that Captiva's
stockholders vote FOR the adoption of the Captiva 2002 equity incentive plan and
the amendment to Captiva's amended and restated stock option/stock issuance
plan.

Interests of C.E. Unterberg, Towbin

Captiva retained C.E. Unterberg, Towbin as a financial advisor to Captiva
in connection with possible business combination transactions.  Several entities
and individuals affiliated with C.E. Unterberg, Towbin (collectively referred to
here as CEUT) have interests in the note conversion and the merger.  CEUT owns
shares of Captiva common stock and Captiva preferred stock.  In addition, Mel
Lavitt, a partner with CEUT, is a member of Captiva's board of directors and
will be a member of the board of directors of ActionPoint after the merger. CEUT
also holds an aggregate of approximately $1,080,000 principal amount of the
senior notes and an aggregate of approximately $1,480,000 principal amount of
the convertible notes.

In August 2000, Captiva paid $229,000 to an affiliate of CEUT as compensation
for the financial advice and services rendered by CEUT in connection with the
issuance of the convertible notes and the amendment of the senior notes.  In
December 2001 Captiva entered into an agreement to engage CEUT as it exclusive
investment banking and financial advisor with respect to possible business
combination transactions.  Pursuant to the engagement agreement, upon
consummation of the merger, CEUT is entitled to a transaction fee in the
aggregate amount of $350,000, $200,000 of which is payable upon the closing of
the merger and the remainder of which is payable in three installments of
$50,000.  The first, second and third installments are each due upon the later
of the closing of the merger or the last day of each of the current and
remaining quarters in 2002, respectively.

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Interests of Executive Officers and Directors of ActionPoint and Captiva
in the Merger

Stockholders should be aware of the interests that various executive
officers and directors of ActionPoint and Captiva have in the merger.  The
boards of directors of ActionPoint and Captiva and their respective special
committees were aware of the material conflicts and considered them when
approving the merger, the merger agreement and related actions.  These interests
of the executive officers and directors of ActionPoint and Captiva are different
from, and in addition to, other stockholder's interests and their interests as
stockholders.  As a result of the interests described below, these directors and
executive officers of ActionPoint and Captiva may have been more likely to
approve the transaction than the ActionPoint and Captiva stockholders
generally.

Interests of ActionPoint's Executive Officers and Directors

Severance Agreements.  In connection with the merger, ActionPoint
entered into severance agreements with each of Stephen Francis, John Finegan,
John Stetak, Matthew Albanese, James Vickers and David Sharp.  See "Other
Agreements-Severance Agreements" on page 87.

Captiva Stock Held by ActionPoint Directors.  Thomas van Overbeek,
Kimra Hawley and Daniel Tompkins are beneficial owners of shares of Captiva
preferred stock held by Novus Ventures, L.P.  Messrs. van Overbeek and Tompkins
are general partners of Novus Ventures, L.P.  Ms. Hawley is married to Mr. van
Overbeek.  Novus Ventures, L.P. will receive approximately 181,706 shares of
ActionPoint common stock as a result of the merger.

Relationship of an ActionPoint Director with Investors that Own
Captiva Stock.  Patrick Edsell serves as a director and the chief executive
officer of Gigabit Optics Corporation, an early-stage venture capital-backed
company.  A limited partnership that is affiliated with Enterprise Partners III,
L.P. owns approximately 19.9% of Gigabit and has representative on the Gigabit
board of directors.  Enterprise Partners III, L.P. will beneficially own
approximately 6.6% of Captiva's common stock immediately prior to the merger.

The Special Committee of ActionPoint's Board of Directors.  Based on
certain material conflicts, the ActionPoint board of directors created a special
committee of independent directors to review all of the strategic alternatives
available to ActionPoint and recommend to the full board what action ActionPoint
should take.

Interests of Captiva's Executive Officers and Directors

Employment Agreements.  In connection with the merger, ActionPoint
entered into an offer letter agreement with each of Reynolds Bish and Rick
Russo.  The letter agreements are contingent upon the completion of the merger.
Each letter agreement sets forth the employee's position, compensation and
eligibility to participate in the benefit plans of the combined company.  Under
the terms of the letter agreements, Messrs. Bish and Russo will be at-will
employees and each is entitled to severance benefits in the event his respective
employment with the combined company is terminated without cause.  See
"Other Agreements-Employment Offer Letters" on page 86.

Stock Option Grants.  As of March 31, 2002, Captiva's executive
officers and directors held options to purchase a total of 84,051,834 shares of
Captiva common stock at exercise prices ranging from $0.008 to $0.8 per share,
including unvested options to purchase a total of 81,080,792 shares of Captiva
common stock at exercise prices ranging from $0.008 to $0.8 per share.  All of
the options granted to Captiva's executive officer and directors will be assumed
by ActionPoint at the effective time of the merger.  As a result, options to
purchase 79,106,834 shares of Captiva common stock will become options to
purchase 1,235,000 shares of ActionPoint common stock with a weighted average
exercise price of $1.68 per share.

Of the 84,051,834 options issued to Captiva's executive officers, 79,106,834
have been granted in connection with the merger.  The exercise price and number
of options to purchase shares of Captiva common stock issued to Captiva's
executive officers in connection with the merger and the options to purchase
shares of ActionPoint common stock into which such options will convert at the
effective time of the merger are set forth in the following table.  The
following options are subject to varying vesting schedules.

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Stock Option Grants to Executive Officers and Directors

of Captiva in Connection with the Merger

`Options to Purchase ActionPoin
                                 Options to Purchase         Common Stock Issuable Upon
                                Captiva Common Stock        Conversion of Captiva Options
                          -----------------------------   --------------------------------
Optionholder               Shares (#)     Exercise Price   Shares (#)      Exercise Price
------------              -------------   -------------   -------------    ---------------
                                                                           
Reynolds Bish .........     22,098,670         $0.0080         345,000              $0.52
                            22,098,670          0.0379         345,000               2.43
Rick Russo.............      8,647,306          0.0379         135,000               2.43
Steven Burton..........      8,807,441          0.0080         137,500               0.52
                             8,807,441          0.0379         137,500               2.43
Blaine Owens...........      8,647,306          0.0379         135,000               2.43`

Option Repricing and Option Acceleration for Captiva's Executive Officers and
Directors

Stock Option Grants to Executive Officers and

Directors of Captiva to be Repriced in Connection with the
Merger

`Options to
                                          Original Exercise                   Purchase     Exercise Price of
                                            Price of      Exercise Price     ActionPoint       Options to
                           Options to      Options to     of Options to     Common Stock        Purchase
                            Purchase        Purchase        Purchase        Issuable Upon     ActionPoint
                          Captiva Stock   Captiva Stock   Captiva Stock     Conversion of     Stock After
Optionholder              To be Reprised (To be Reprised  After Repricing  Captiva Options     the Merger
------------              -------------   -------------   -------------    ---------------   --------------
Reynolds Bish .........        850,000           $0.22         $0.0080             13,260            $0.52
                               850,000            0.08          0.0080             13,260             0.52
Rick Russo.............        700,000            0.22          0.0080             10,920             0.52
Steven Burton..........        500,000            0.22          0.0080              7,800             0.52
                               850,000            0.08          0.0080             13,260             0.52
Blaine Owens...........        600,000            0.22          0.0080              9,360             0.52
                                30,000            0.80          0.0080                468             0.52
John Jones.............        150,000            0.22             *              2,340                *
Jordan Libit...........        150,000            0.22             *              3,340                *
Edward Pendergast......        100,000            0.22             *              1,560                *
                                75,000            0.34             *              1,170                *
                                90,000            0.16             *              1,404                *`

______________________



Registration of ActionPoint Common Stock for Resale.  By filing the
registration statement, of which this joint proxy statement/prospectus forms a
part, ActionPoint has registered for resale the shares of ActionPoint common
stock to be delivered to certain Captiva executive officers, directors and
affiliates who will not be executive officers, directors or affiliates of
ActionPoint after the merger.  The registration statement, of which this joint
proxy statement/prospectus forms a part, will serve as the resale registration
statement.  ActionPoint has agreed with Captiva to maintain the effectiveness of
the resale registration statement for one year after the merger.  This

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Approximately 43% of the shares that may be offered for resale by Captiva's
affiliates are subject to lock-up agreements and, therefore, the ability to
resell these shares will be restricted during the first 180 days following the
merger.  See "Other Agreements-Lock-Up Agreements" on page 85.
However, without the registration for resale, the resale of shares of
ActionPoint common stock by Captiva's executive officers and affiliates would
otherwise be restricted for a longer period under Rule 145 of the Securities
Act.

Conversion of Promissory Notes Issued by Captiva to Captiva Directors and
Entities Affiliated with Captiva Directors.  Mel Lavitt, a Captiva director
and stockholder, is Vice Chairman and Managing Director of C.E. Unterberg,
Towbin, which has agreed to convert $2,560,000 of Captiva's promissory notes
directly or beneficially owned by it into shares of Captiva common stock
contingent upon the occurrence of and effective immediately prior to the merger.
Additionally, Mr. Lavitt has agreed to convert $100,000 of Captiva's promissory
notes directly or beneficially owned by him into shares of Captiva common stock
contingent upon the occurrence of and effective immediately prior to the
merger.

James Berglund, a director of Captiva, is a general partner of Enterprise
Partners Venture Capital, which has agreed to convert $1,069,726 of Captiva's
promissory notes directly or beneficially owned by it into shares of Captiva
common stock contingent upon the occurrence of and effective immediately prior
to the merger.

Shirley Cerrudo, a director of Captiva, is a general partner at Novus
Ventures, which has agreed to convert $356,575 of Captiva's promissory notes
directly or beneficially owned by it into shares of Captiva common stock
contingent upon the occurrence of and effective immediately prior to the
merger.

Affiliations with Financial Advisors.  Mel Lavitt, a Captiva director
and stockholder, is Vice Chairman and Managing Director of C.E. Unterberg,
Towbin, which has provided financial advisory and investment banking services to
Captiva related to the merger pursuant to an engagement letter dated as of
December 11, 2001.  Captiva will pay C.E. Unterberg, Towbin $350,000 for
advisory and investment banking services rendered pursuant to that engagement
letter if the merger is completed.

Directorships.  If the merger is approved, ActionPoint has agreed that
John Finegan, Thomas van Overbeek and Daniel Tompkins will resign and their
successors, Reynolds Bish, Mel Lavitt and Jim Berglund, current members of
Captiva's board of directors, will be elected to the board by the ActionPoint
board of directors after the merger.

Indemnification of Directors and Officers.  ActionPoint has agreed
that, for a period of 6 years after the merger, it will indemnify all past and
present officers and directors of Captiva against losses incurred as a result of
any actions or omissions (or alleged actions or omissions) occurring at or prior
to the effective time of the merger, to the same extent that such officers and
directors are indemnified by Captiva as of the date of the merger agreement.  In
addition, the merger agreement provides that ActionPoint will maintain, for a
period of 6 years after the effective time of the merger, the existing policy of
directors' and officers' liability insurance maintained by ActionPoint for the
benefit of its current officers and directors as of the date of the merger
agreement (or a new policy providing comparable coverage containing terms and
conditions, taken as a whole, that are no less advantageous), for the benefit of
all past and present officers and directors of Captiva with respect to claims
arising from facts or events that occurred prior to the effective time of the
merger.  These indemnification rights will not be modified without the
consent
of the indemnified person and the rights will be honored by any successors and
assigns of ActionPoint or the combined company.

ActionPoint Stock Held by Captiva Directors.  James Berglund owns
2,000 shares of ActionPoint common stock.

The Special Committee of Captiva's Board of Directors.  Based on
certain material conflicts, the Captiva board created a special committee to
evaluate, negotiate and recommend strategic alternatives relating to the
amendment and conversion of its outstanding promissory notes into equity
securities of Captiva.

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Accounting Treatment of the Merger

The merger will be accounted for as a purchase for financial reporting
and accounting purposes, as required under generally accepted accounting
principles.  After the completion of the merger, the results of operations of
Captiva will be included in the consolidated financial statements of the
combined company.  The purchase price will be allocated to Captiva's assets and
liabilities based on the fair values of the assets acquired and the liabilities
assumed.  Any excess of cost over the fair values of the net tangible assets of
Captiva acquired will be recorded as goodwill and other intangible assets.
Other intangible assets will be amortized by charges to operations under
generally accepted accounting principles.  These allocations will be made based
upon valuations and analysis that have not yet been finalized.  A preliminary
estimate of these valuations is included in this joint proxy
statement/prospectus in the section entitled "Unaudited Pro Forma Condensed
Combined Financial Information" on page 140.

Form of Merger

Subject to the terms and conditions of the merger agreement and in
accordance with California law, a wholly-owned subsidiary of ActionPoint will
merge with and into Captiva.  Captiva will be the surviving corporation of the
merger and will be a wholly-owned subsidiary of ActionPoint.

Merger Consideration; Exchange Ratio

As a result of the merger, ActionPoint will issue, or be required to
issue in the future pursuant to warrants and options, up to approximately
6,639,873 shares of ActionPoint common stock in the aggregate to the current
holders of Captiva stock, notes, warrants and options.  At the time of the
merger, up to approximately 4,374,873 of those shares will be issued by
ActionPoint in exchange for all of the outstanding Captiva common stock or will
be issuable by ActionPoint upon the exercise of warrants to acquire Captiva
common stock that will be assumed by ActionPoint in the merger and converted
into warrants to purchase ActionPoint common stock.  Additionally, following the
merger, up to 2,265,000 of the aggregate ActionPoint shares to be issued in the
merger will be issuable upon the exercise of the options to purchase Captiva
common stock that will be assumed by ActionPoint in the merger and converted
into options to purchase ActionPoint common stock.  The holders of Captiva's
common stock immediately prior to the merger will own or have the right to
acquire up to approximately 49.9% of the outstanding common stock of ActionPoint
following the merger.  The holders of Captiva's promissory notes, who are
expected to agree to convert their notes into common stock immediately prior to
the merger, will hold up to approximately 80% of Captiva's common stock at that
time and will therefore own up to approximately 40% of ActionPoint's common
stock following the merger.

Immediately prior to the effective time of the merger, pursuant to the
election of the holders of a majority of Captiva's preferred stock in accordance
with Captiva's articles of incorporation, each share of Captiva Series A
preferred stock, Series B preferred stock and Series C preferred stock will
automatically be converted into 1.321118 shares of Captiva common stock.  In
addition, each share of Captiva Series D preferred stock and Series E preferred
stock will automatically be converted into 1 share of Captiva common stock.  No
shares of Captiva preferred stock will be outstanding upon the closing of the
merger.

Also immediately prior to the effective time of the merger, pursuant to the
election of the holders of Captiva's promissory notes, at least 75% of the
principal amount of the promissory notes will be converted into Captiva common
stock based on the conversion price calculated in accordance with the terms of
the promissory notes.

At the effective time of the merger, each outstanding share of Captiva common
stock will automatically be converted into a fraction of a share of ActionPoint
common stock equal to the exchange ratio.  The exchange ratio will be determined
by dividing (x) the number of shares of ActionPoint common stock outstanding
immediately prior to the merger minus 1 by (y) the number of then outstanding
shares of Captiva common stock, assuming the conversion into common stock of all
of the promissory notes and warrants issued by Captiva.

Based on the outstanding shares of Captiva capital stock and warrants and
options to acquire Captiva common stock on March 31, 2002, the conversion price
for the promissory notes is approximately $0.03751 per share of Captiva common
stock.  In other words, each $1.00 in principal and interest will be converted
into 26.66230 shares of Captiva common stock.  The exact conversion price cannot
be determined at this time because interest

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In addition, Captiva stockholders will receive cash in lieu of any fractional
shares that they would otherwise receive in the merger.  Captiva options and
warrants will be assumed by ActionPoint and converted into options and warrants
to purchase ActionPoint common stock.

As of the effective time of the merger, all shares of Captiva stock
will automatically be canceled and will cease to exist.  At that time, each
holder of a certificate representing shares of Captiva stock (other than
shares as to which appraisal rights have been perfected) will cease to have any
rights as a stockholder except the right to receive ActionPoint common stock
and cash for any fractional shares.  The merger consideration was determined
through arms'-length discussions between ActionPoint and Captiva.

Effective Time of the Merger

The merger will become effective upon the filing of an agreement of
merger with the Secretary of State of the State of California, or at such later
time as stated in the agreement of merger or as agreed to by ActionPoint and
Captiva.  The filing of the agreement of merger will occur at the time of
closing of the merger.

Material United States Federal Income Tax Considerations

In the opinion of Gunderson Dettmer Stough Villeneuve Franklin
& Hachigian, LLP, counsel to ActionPoint, and Cooley Godward LLP, counsel to Captiva, the
following are the material United States federal
income tax consequences of the merger to Captiva stockholders
who exchange their shares of Captiva stock for shares of ActionPoint stock.
This discussion is based on currently existing provisions
of the Internal Revenue Code of 1986, as amended, existing treasury regulations
and current administrative rulings and court decisions, all of which are subject
to change.  Any such change, which may or may not be retroactive, could alter
the tax consequences to ActionPoint, Captiva or Captiva stockholders.

Captiva stockholders should be aware that this discussion
does not deal with all federal income tax considerations that may be relevant to
particular Captiva stockholders that are subject to special rules or that may be
important in light of such stockholders' individual circumstances, such as
stockholders who:

- are dealers in securities or foreign currency;
- are subject to the alternative minimum tax provisions of the Internal
Revenue Code;
- are foreign persons or entities;
- are financial institutions, mutual funds or insurance companies;
- are tax-exempt organizations;
- do not hold their Captiva shares as capital assets;
- acquired their shares in connection with stock option or stock purchase
plans or in other compensatory transactions;
- hold Captiva capital stock as part of an integrated investment (including a
"straddle," pledge against currency risk, "constructive"
sale or "conversion" transaction) comprised of shares of Captiva
capital stock and one or more other positions; or
- hold Captiva capital stock as qualified small business stock within the
meaning of Section 1202 of the Internal Revenue Code.

In addition, the following discussion does not address:

- tax consequences of the merger under foreign, state or local tax laws;
- tax consequences of transactions effectuated before, after or concurrently
with the merger (whether or not any such transactions are undertaken in
connection with the merger) including any transaction in which Captiva shares
are acquired or ActionPoint shares are disposed of; or
- tax consequences to holders of options, warrants or similar rights to
acquire Captiva capital stock, including the assumption by ActionPoint of
outstanding options and subscriptions to acquire Captiva capital
stock.

Accordingly, Captiva stockholders are urged to consult
their own tax advisors as to the specific tax consequences of the merger,
including the applicable federal, state, local and foreign tax consequences of
the merger.

ActionPoint and Captiva have received initial tax
opinions, the exhibit tax opinions, from their respective counsel, Gunderson
Dettmer Stough Villeneuve Franklin & Hachigian, LLP and Cooley Godward LLP
to the effect that the merger will be treated for federal income tax purposes as
a reorganization qualifying under the provisions of Section 368(a) of the
Internal Revenue Code.  These opinions have been filed as exhibits to the
Registration Statement of which this joint proxy statement/prospectus is a part.
As explained more fully below, these opinions are subject to certain
assumptions, limitations and qualifications.  In addition, completion of the
merger is conditioned on the receipt by ActionPoint and Captiva of final tax
opinions, the final tax opinions, substantially similar to the exhibit tax
opinions but based on representations of ActionPoint, Captiva and Condor Merger
Corp. as of the date of the closing of the merger.  In the event that the final
tax opinions requirement is waived as a result of a material change in the tax
consequences of the merger from those expressed in this tax consequences
section, a revised tax consequences section will be prepared and distributed to
Captiva stockholders as part of a revised joint proxy statement/prospectus for
the merger.

The following material federal income tax consequences will
result from the merger constituting a reorganization within the
meaning of the Section 368(a):

- Captiva stockholders will not recognize any gain or loss solely upon
receipt in the merger of ActionPoint common stock in exchange for Captiva
capital stock, except to the extent of cash received in lieu of fractional
shares of ActionPoint common stock and in the case of Captiva stockholders that
exercise their dissenters' rights;
- the aggregate tax basis of the ActionPoint common stock received by a
Captiva stockholder in the merger, including any fractional shares of
ActionPoint common stock not actually received, will be the same as the
aggregate tax basis of the surrendered Captiva capital stock;
- the holding period of the ActionPoint common stock received by a Captiva
stockholder in the merger will include the period for which the surrendered
Captiva capital stock was considered to be held,
provided that the Captiva
capital stock so surrendered is held as a capital asset at the time of the
merger;
- cash payments received by a Captiva stockholder in lieu of fractional shares
of ActionPoint common stock will be treated as if fractional shares of
ActionPoint common stock had been issued in the merger and then redeemed by
ActionPoint.  A Captiva stockholder receiving cash in lieu of a fractional share

63



will generally recognize capital gain or loss with respect to such payment
measured by the difference (if any) between the amount of cash received and the
basis in the fractional share;
- holders of Captiva capital stock who exercise dissenters' rights with
respect to their shares of Captiva capital stock and who receive payment for the
shares in cash will recognize gain or loss measured by the
difference between the amount of cash received and the stockholders' basis in
the shares surrendered, if,
as a result of such exercise, such stockholder owns no shares of Captiva capital
stock (either actually or constructively within the meaning of Section 318 of
the Internal Revenue Code) immediately after the merger.  If
a Captiva stockholder who exercises his, her or its dissenters' rights
owns any shares of Captiva capital stock (either actually of constructivley within the
meaning of Section 318 of the Internal Revenue Code) immediately after the merger, then
such stockholder may recognize ordinary income for federal income tax purposes in an
amount equal to the entire amount of cash received by such stockholder pursuant to such
exercise;

Although ActionPoint and Captiva will have received the
exhibit tax opinions and will receive the final tax opinions that will provide
that the merger will constitute a reorganization, a recipient of shares of
ActionPoint common stock could recognize gain to the extent that those shares
were considered to be received in exchange for services or property other than
solely Captiva capital stock.  All or a portion of that gain may be taxable as
ordinary income.  For example, the Internal Revenue Service, or the IRS, may
assert that the difference between (i) the amount of ActionPoint common stock
that the holders of Captiva preferred stock would have received in the merger
had the amendment and restatement to Captiva's articles of incorporation,
attached hereto as Annex K, not been adopted and (ii) the amount of
ActionPoint common stock that such holders of Captiva preferred stock actually
receive in the merger should be treated as constructively received by such
holder of Captiva preferred stock and then transferred to the holders of Captiva
common stock in a fully taxable transaction.  In the event that the IRS were to
prevail in such position, the holders of Captiva common stock would recognize
income in an amount equal to the value of the ActionPoint common stock that they
are deemed to receive pursuant to such constructive transfer, and the holders of
Captiva preferred stock would be treated as recognizing gain in an amount equal
to the excess of the value of the ActionPoint common stock they are deemed to
transfer and the basis that they would have had in such stock immediately
following the merger had they actually received such stock in the merger.  There
can be no assurance that the IRS would not be successful in any such assertion.
A Captiva stockholder could also have to recognize gain to the extent that such
stockholder was treated as receiving (directly or indirectly) consideration
other than ActionPoint common stock in exchange for Captiva capital stock.

ActionPoint and Captiva will not request a ruling from the
IRS in connection with the merger, and neither the exhibit tax opinions nor the
final tax opinions will be binding upon the IRS.  The IRS is therefore not
precluded from successfully asserting a contrary opinion.  In addition, the
exhibit tax opinions and final tax opinions are or will be, as applicable,
subject to certain assumptions, limitations and qualifications, including the
assumptions that:

- original documents (including signatures) are authentic, documents submitted
to counsel as copies conform to the original documents, and there has been (or
will be by the effective time of the merger) due execution and delivery of all
documents where due execution and delivery are prerequisites to the
effectiveness of such documents;
- all statements, representations and warranties made or agreed to by
ActionPoint, Condor Merger Corp. and Captiva, and their respective managements,
employees, officers, directors and stockholders, in the merger agreement, in the
representation letters received or to be received, as applicable, from
ActionPoint, Condor Merger Corp. and Captiva to support the exhibit tax opinions
and the final tax opinions, and in other documents related to ActionPoint,
Condor Merger Corp. and Captiva and relied upon by counsel to support the
opinions are, in each case, true and accurate.  Any such representation or
statement made "to the knowledge of" or otherwise similarly qualified
is correct without such qualification and all such statements and
representations, whether or not qualified, will remain true through the
effective time of the merger.  In addition, as to all matters in which a person
or entity making such a representation has represented that such person or
entity either is not a party to, does

64


not have, or is not aware of any plan,
intention, understanding or agreement to take an action, there is in fact no
plan, intention, understanding or agreement and such action will not be
taken;
- all covenants contained in the merger agreement or in the representation
letters received or to be received from ActionPoint, Condor Merger Corp. and
Captiva to support the exhibit tax opinions and the final tax opinions are
performed without waiver or breach of any material provision thereof;
- the merger will be consummated pursuant to the merger agreement and will be
effective under the laws of the State of California;
- no Captiva stockholder has guaranteed or will guarantee any Captiva
indebtedness outstanding during the period immediately prior to the merger, and
at all relevant times, including as of the effective time of the merger, (i) no
outstanding indebtedness of ActionPoint, Condor Merger Corp. or Captiva has or
will represent equity for tax purposes, (ii) no outstanding equity of
ActionPoint, Condor Merger Corp. or Captiva has or will represent indebtedness
for tax purposes and (iii) no outstanding security, instrument, agreement or
arrangement that provides for, contains, or represents either a right to acquire
Captiva stock or to share in the appreciation thereof constitutes or will
constitute "stock" for purposes of the Internal Revenue Code;
- after the merger, Captiva will hold "substantially all" of its and
Condor Merger Corp.'s properties and will continue its historic business or use
a significant portion of its historic assets in a business;
- ActionPoint, Condor Merger Corp. and Captiva will report the merger on their
respective U.S. federal income tax returns in a manner consistent with the
qualification of the merger as a reorganization; and
- representations made by ActionPoint, Condor Merger Corp. and Captiva in
certain certificates to be delivered to counsel by the respective managements of
ActionPoint, Condor Merger Corp. and Captiva will be true and
accurate.

A successful IRS challenge to the reorganization status of
the merger as a result of a failure to meet any of the requirements of a
reorganization would result in Captiva stockholders recognizing taxable capital
gain or loss with respect to their shares of Captiva capital stock surrendered
equal to the difference between their bases in such shares and the fair market
value, as of the date the merger is completed, of the ActionPoint common stock
received in exchange therefor, provided that the Captiva capital stock so
surrendered is held as a capital asset at the time of the merger.  In such
event, a stockholder's aggregate basis in the ActionPoint common stock so
received would equal its fair market value as of the date the merger is
completed, and the stockholder's holding period for such stock would begin the
day after the merger.

Reporting Requirements.  Each individual Captiva
stockholder who receives ActionPoint common stock in the merger will be required
to file a statement with his or her federal income tax return providing his or
her basis in the Captiva stock surrendered and the fair market value of the
ActionPoint common stock and any cash received in the merger, and to retain
permanent records of this information relating to the merger.

Backup Withholding.  Certain non-corporate Captiva
stockholders may be subject to backup withholding at a 30% rate on cash payments
received instead of fractional shares of ActionPoint common stock.  Backup
withholding will not apply, however, to a Captiva stockholder who (a) is a
United States resident or domestic entity and who furnishes a correct taxpayer
identification number and certifies that he, she or it is not subject to backup
withholding
on the substitute Form W-9 or successor form included in the letter
of transmittal to be delivered to Captiva stockholders following the date of the
merger, (b) provides a certification of foreign status on the appropriate
form or (c) is otherwise exempt from backup withholding.

Appraisal and Dissenters' Rights

The following is a summary of the provisions of Chapter 13 of the
California General Corporation Law, or Chapter 13, which provides stockholders
of Captiva with certain dissenters' rights. All references to and summaries of
the rights of dissenting stockholders are qualified in their entirety by
reference to the text of Chapter 13, which is attached to this joint proxy
statement/prospectus as Annex D.

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Subject to certain conditions, Chapter 13 grants stockholders of Captiva who
are entitled to vote, and who vote all of their shares against the merger, the
right to require Captiva to purchase for cash at fair market value the shares of
Captiva common stock which qualify as dissenting shares.  Stockholders who do
not follow the statutory procedures of Chapter 13, however, will lose their
rights to dissent on the merger.  Dissenting stockholders will have no interest
in Captiva after they surrender their certificates representing the dissenting
shares and receive payment therefor.  Surrendered shares will resume the status
of authorized but unissued shares.

If the merger proposal is approved by the required vote of Captiva
stockholders, Captiva stockholders who vote against the merger proposal will
generally not have appraisal rights with respect to the merger unless (i) such
shares are subject to a restriction on transfer imposed by Captiva or any law or
regulation, or (ii) demands for payment (as described below) are filed with
respect to 5% or more of the outstanding shares of Captiva common stock.  Any
stockholder entitled to vote who desires to exercise dissenters' rights must
vote his, her or its shares against the approval of the merger proposal.  In
addition, the stockholder must demand in writing that Captiva purchase those
shares and pay the stockholder the fair market value of those shares in cash.
The demand for payment must state the number and class of the shares held of
record by the stockholder that the stockholder wants Captiva to purchase and
shall also state what the stockholder claims to be the fair market value of the
shares as of the day before the announcement of the definitive terms of the
merger.  The statement of fair market value will constitute an offer by the
stockholder to sell such shares at such price.  Such demand must be received by
Captiva at its principal executive offices at 10145 Pacific Heights Blvd., San
Diego, CA 92121, or by a transfer agent designated by Captiva, not later than July        
, 2002, the date the action by written consents are due from the stockholders of
Captiva.  A stockholder may not withdraw a demand for payment unless Captiva
consents thereto.

Within 10 days after the date Captiva receives stockholder approval of the
merger, Captiva must mail to any stockholder that could qualify as possessing
dissenting shares a notice of approval. Captiva's statement of fair market value
contained in the notice of approval will constitute an offer by Captiva to
purchase the stockholder's shares at the price stated in the notice of approval,
provided that such shares qualify as dissenting shares and do not lose their
status as dissenting shares, as outlined below.

Within 30 days after the date on which the notice of approval was mailed, the
stockholder must submit to Captiva or a designated transfer agent the
certificates representing any shares that the stockholder demands that Captiva
purchase. Such shares will be stamped or endorsed with a statement that the
shares are dissenting shares or will be exchanged for share certificates so
stamped or endorsed.

If a dissenting stockholder and Captiva agree that the shares are dissenting
shares and agree upon the price of the shares, Captiva will pay the dissenting
stockholder the agreed price with interest at the legal rate on judgments from
the date of such agreement, within 30 days after the date of the agreement or
within 30 days after any statutory or contractual conditions to the merger are
satisfied, whichever is later. If Captiva denies that the shares are dissenting
shares, or Captiva and the stockholder fail to agree upon the fair market value
of the dissenting shares, then the stockholder or Captiva may seek a court
determination of whether the shares are dissenting shares, the fair market value
of the dissenting shares, or both. The stockholder may intervene in any action
pending on such a complaint. The stockholder or Captiva must file a complaint or
intervene in a pending action within six months after the date on which the
notice of approval was mailed. In determining the fair market value of the
dissenting shares, the court may, but is not required to, appoint one or more
appraisers. If the court appoints appraisers it may accept the appraisers'
valuation or make its own determination of the fair market value of the
dissenting shares and enter judgment accordingly. Any party may appeal from the
judgment. The costs of the action, including reasonable compensation for the
appraisers, shall be assessed as the court considers equitable, but if the
judgment exceeds the
amount offered by Captiva, Captiva shall pay those costs
(including, in the court's discretion, attorneys' fees, fees of expert
witnesses, and interest at the legal rate on judgments from the date of the
stockholder's compliance with the foregoing procedures for demanding payment of
dissenting shares if the value awarded by the court is more than 125% of the
amount Captiva states as the fair market value in the notice of approval). The
stockholder may recover the amount the court determines to be the fair market
value of each dissenting share multiplied by the number of dissenting shares
Captiva must purchase, with interest thereon at the legal rate from the date of
judgment. The judgment is payable only upon endorsement and delivery to Captiva
of the certificates for the shares described in the judgment.

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Dissenting shares may lose their status as dissenting shares and the
dissenting stockholder will cease to be entitled to require Captiva to purchase
such shares if:

- Captiva and ActionPoint abandon the merger;
- the stockholder transfers the shares before submitting them to Captiva or
the designated transfer agent;
- the stockholder withdraws the demand that Captiva purchase the dissenting
shares; or
- if Captiva and the stockholder do not agree on the status of the shares as
dissenting shares or upon the fair market value of such shares and neither has
filed a court petition as set forth above within six months after the mailing of
the notice of approval.

A vote in favor of the merger constitutes a waiver of dissenters' rights
under Chapter 13.  Furthermore, a vote against approval of the merger does not
satisfy the requirement of a written demand for payment or the other actions
required by Chapter 13 to perfect dissenters' rights.  Such written demand for
payment must be in addition to and separate from any action by written consent
regarding the merger.

Failure to follow the provisions of Chapter 13 of the California law will
result in a loss of all dissenters' rights.

ActionPoint stockholders are not entitled to dissenters' or appraisal
rights with respect to the merger.

Quotation on The Nasdaq National Market

It is a condition to the closing of the merger that the shares of
ActionPoint common stock to be issued pursuant to the merger agreement be
approved for listing on The Nasdaq National Market.

Shares Eligible For Future Sale

Upon completion of the merger, assuming the conversion of all of
Captiva's outstanding promissory notes and no changes in the number of shares of
Captiva common stock and the number of shares of ActionPoint common stock
outstanding as of March 31, 2002, approximately 8,749,747 shares of ActionPoint
common stock will be outstanding.  All of the up to approximately 4,374,873
shares to be issued at the effective time of the merger will be freely tradable
without restriction or further registration under the Securities Act, other than
shares held by "affiliates" of ActionPoint or Captiva as that term is
defined in Rule 144 or 145 under the Securities Act or under the lock-up
agreements entered into by certain of Captiva's stockholders as described below.
In general, under Rule 144, a person who may be deemed an affiliate of the
combined company after the merger who has beneficially owned shares of
ActionPoint common stock or shares exchanged for ActionPoint common stock for at
least one year will be entitled to sell within any three-month period during the
year following the completion of the merger a number of shares that does not
exceed the greater of 1% of the number of shares of ActionPoint common stock
then outstanding (which is expected to be approximately 87,500 shares upon the
completion of the merger) or the average weekly trading volume of the combined
company's common stock on The Nasdaq National Market during the four calendar
weeks preceding such sale.  Sales under Rule 144 are also subject to certain
provisions relating to the manner and notice of sale and availability of current
public information about the combined company.

In general, under Rule 145, affiliates of Captiva will also be subject to the
above restrictions on sales of the combined company's common stock received in
the merger.  The restrictions under Rule 145 will not apply to
shares that
ActionPoint is registering for resale in this joint proxy statement/prospectus.
The registration for resale includes approximately 2,262,365 shares of
ActionPoint common stock to be received by the affiliates of Captiva in
connection with the merger who will not be affiliates of the combined company
immediately following the effective time of the merger.  Of the 2,262,365 shares
of ActionPoint common stock registered for resale by Captiva's affiliates, a
total of 1,297,143 shares of ActionPoint common stock not subject to the lock-up
agreements will be immediately available for resale in the public market
following the effective time of the merger.

Options.  Holders of ActionPoint common stock who purchased or will
purchase such shares under stock options to purchase Captiva common stock
assumed by ActionPoint in connection with the merger will be entitled to

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Lock-Up Agreements.  Subject to the volume limitations described
above for any shares other than shares registered for resale by the selling
stockholders, upon the expiration of the lock-up agreements entered into by certain of
Captiva's stockholders and ActionPoint's executive officers and directors,
901,556 of the 8,749,747 shares of the combined company's outstanding common
stock at the effective time of the merger will become available for resale in
the public market 90 days following the effective time of the merger and 901,556
shares will become available for resale in the public market 180 days following
the effective time of the merger.  Additionally, if individuals subject to the
lock-up agreements exercise any options held by them during the 180-day period
following the effective time of the merger, those options would also be subject
to the lock-up restrictions and the expiration of those restrictions at 90 days
and 180 days.

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THE MERGER AGREEMENT

The following briefly summarizes the material provisions of the merger
agreement, a copy of which is attached as Annex A to this joint proxy
statement/prospectus and is incorporated by reference into this summary. The
following is not a complete description of all provisions of the merger
agreement and is qualified in its entirety by reference to the merger agreement.
You are encouraged to read the merger agreement in its entirety for a more
complete description of the terms and conditions of the merger.

General

Following the approval and adoption of the merger, the merger agreement
and actions related to the merger by the stockholders of Captiva, the approval
of the share issuance by the stockholders of ActionPoint, and the satisfaction
or waiver of each of the conditions to the merger, Condor Merger Corp., a
wholly-owned subsidiary of ActionPoint, will be merged with and into Captiva.
Captiva will survive the merger as a wholly-owned subsidiary of ActionPoint.  If
all conditions to the merger are satisfied or waived, the merger will become
effective at the time of the filing of the duly executed articles of merger with
the Secretary of State of the State of California, which is referred to as the
effective time.  At the effective time, the name of ActionPoint will be changed
to Captiva Software Corporation.

Merger Consideration; Determination of the Exchange Ratio

In General.  As a result of the merger, ActionPoint will issue, or
be required to issue in the future pursuant to warrants and options, up to
approximately 6,639,873 shares of ActionPoint common stock in the aggregate to
the holders of Captiva stock, notes, warrants and options.  At the time of the
merger, up to approximately 4,374,873 of those shares will be issued by
ActionPoint in exchange for all of the outstanding Captiva common stock or will
be issuable by ActionPoint upon the exercise of warrants to acquire Captiva
common stock that will be assumed by ActionPoint in the merger and converted
into warrants to purchase ActionPoint common stock.  Additionally, following the
merger, up to 2,265,000 of the aggregate ActionPoint shares will be issuable
upon the exercise of the options to purchase Captiva common stock that will be
assumed by ActionPoint in the merger and converted into options to purchase
ActionPoint common stock.  Captiva's preferred stock and between 75% to 100% of
the aggregate principal amount of Captiva's promissory notes will be converted
into Captiva common stock prior to the exchange of Captiva common stock for
ActionPoint common stock.  The holders of Captiva's common stock immediately
prior to the merger will own or have the right to acquire up to approximately
49.9% of the outstanding common stock of ActionPoint following the merger.  The
holders of Captiva's promissory notes, who are expected to agree to convert
their notes into common stock immediately prior to the merger, will hold up to
approximately 80% of Captiva's common stock at that time and will therefore own
up to approximately 40% of ActionPoint's common stock following the merger.

Conversion of Captiva Preferred Stock into Captiva Common Stock.
Immediately prior to the closing of the merger, each share of Captiva Series
A preferred stock, Series B preferred stock and Series C preferred stock will
automatically be converted into 1.321118 shares of Captiva common stock and each
share of Captiva Series D preferred stock and Series E preferred stock will
automatically be converted into 1 share of Captiva common stock.  As of March
31, 2002, Captiva had outstanding 23,760,060 shares of common stock, 2,515,587
shares of Series A preferred stock, 875,424 shares of Series B
preferred stock, 2,188,553 shares of Series C preferred stock, 769,231
shares of Series D preferred stock and 15,444,160 shares of Series E
preferred stock.  Based on the outstanding number of shares of each series of
Captiva preferred stock as of March 31, 2002, all shares of Captiva preferred
stock will be converted into 23,584,654 shares of Captiva common stock
immediately prior to the closing of the merger.

Conversion of Captiva Promissory Notes into Captiva Common Stock. 
Immediately prior to the closing of the merger, all of Captiva's promissory
notes will be amended and at least 75% of the unpaid principal and interest
under Captiva's promissory notes will be converted into shares of Captiva common
stock.  Any unpaid principal or interest under the notes that is not converted
will remain outstanding after the merger and be a liability of the combined
company.

The conversion price for the promissory notes is calculated by dividing (x)
the outstanding unpaid principal and accrued interest due under the notes by (y)
four times the "fully diluted capitalization of Captiva."  The
"fully

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Conversion of Captiva Common Stock into ActionPoint Common Stock.  At
the effective time of the merger and without any action on the part of any
Captiva stockholder, each issued and outstanding share of Captiva common stock,
including the shares of Captiva common stock acquired upon conversion of the
Captiva preferred stock and the promissory notes, will be exchanged for the
right to receive a fraction of a share of ActionPoint common stock.  This
fraction is referred to as the "exchange ratio."  The exchange ratio
will be calculated by dividing (x) the number of shares of ActionPoint common
stock outstanding immediately prior to the merger minus one by (y) the aggregate
number of shares of Captiva common stock outstanding immediately prior to the
effective time of the merger.  For the purpose of determining the number of
shares of Captiva common stock outstanding immediately prior to the merger, it
will be assumed that all of the outstanding principal and accrued but unpaid
interest under Captiva's promissory notes have been converted into shares of
Captiva common stock and that all warrants to purchase Captiva common stock have
been exercised.  Shares issuable under Captiva's outstanding options will not be
deemed to be outstanding for purposes of calculating the exchange ratio.  An
example describing how the exchange ratio would have been calculated as of March
31, 2002 is set forth below.

The
exchange ratio will not be adjusted based on fluctuations in the market price of
ActionPoint's common stock.

Determination of the Exchange Ratio.

- the conversion of all of Captiva's preferred stock into 23,584,654 shares of
Captiva common stock;
- the conversion of Captiva's promissory notes into 226,300,496 shares of
Captiva common stock;
- 23,760,060 shares of Captiva common stock outstanding as of March 31, 2002;
and
- the exercise of options to purchase 6,083,414 shares of Captiva common stock
that is expected to be made immediately prior to the merger;

there will be approximately 279,728,624 shares of Captiva common stock
outstanding immediately prior to the merger.  Based on ActionPoint's 4,374,874
shares of common stock outstanding as of March 31, 2002, ActionPoint will issue
4,374,873 shares of ActionPoint common stock to the holders of Captiva common
stock immediately prior to the merger.  Based on the foregoing assumed number of
shares of Captiva common stock outstanding and the assumed number of shares of
ActionPoint common stock to be issued, the exchange ratio will be approximately
0.0156, meaning each share of Captiva common stock would be exchanged for
approximately 0.0156 shares of ActionPoint common stock.  The values used in the
foregoing description of the determination of the exchange ratio are based on
information available as of March 31, 2002 and will not be identical to the
values that will be used to calculate the exchange ratio at the time of the
merger.  Therefore, the final exchange ratio may be different from the exchange
ratio in this example.   The combined company will announce the final exchange
ratio in a press release immediately after the completion of the merger.

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Treatment of Captiva Stock Options

In the merger between ActionPoint and Captiva, ActionPoint has agreed to
assume all of the stock options outstanding under Captiva's two stock option
plans, the amended and restated stock option/stock issuance plan, or the stock
plan, and the 2002 equity incentive plan.  As a result of the merger, all
options to purchase shares of Captiva common stock, whether vested or unvested,
will be assumed by ActionPoint.  Each option to acquire shares of Captiva stock
outstanding immediately prior to the merger will be converted into an option to
acquire the number of shares of ActionPoint common stock equal to the number of
shares subject to Captiva's option multiplied by the exchange ratio, rounded
down to the nearest whole number.  The exercise price for the shares of
ActionPoint common stock issued to Captiva's stockholders will be equal to the
exercise price for the original option to purchase Captiva stock divided by the
exchange ratio, rounded up to the nearest whole cent.  For the reasons discussed
above, the exact exchange ratio cannot be determined prior to the effective
time, and accordingly the number of options to acquire ActionPoint common stock
into which Captiva's stock options will be converted is not currently known.

As of March 31, 2002, options to purchase 8,730,419 shares of Captiva common
stock were outstanding under Captiva's amended and restated stock option/stock
issuance plan and options to purchase 124,686,174 shares of Captiva common stock
were outstanding under the Captiva 2002 equity incentive plan.  Under the merger
agreement, Captiva is permitted to grant additional options to purchase
16,148,043 shares of Captiva common stock prior to the effective time.  Captiva
and ActionPoint expect that options to purchase 6,083,414 shares of Captiva
common stock will be exercised prior to the merger and, if not exercised prior
to the merger, these options will automatically terminate.  Assuming the
foregoing exercises and grants are made and there is no change to the exchange
ratio, Captiva's outstanding options will convert into options to purchase
2,240,000 shares of ActionPoint common stock in the merger.  Prior to the
merger, Captiva may also grant additional options to new employees of Captiva
hired prior to the closing of the merger.  Those options would convert into
options to purchase not more than 25,000 shares of ActionPoint common stock.
Captiva has agreed that it will not have outstanding options to purchase Captiva
common stock in excess of that number of options which would convert into
options to purchase 2,265,000 shares of ActionPoint common stock in the
merger.

The options to acquire ActionPoint common stock issued in the conversion of
Captiva's options will be subject to the same terms and conditions that are
currently applicable to the Captiva options under the outstanding Captiva option
agreements and the Captiva option plans.  ActionPoint has agreed to file a
registration on Form S-8 to register all of the shares of ActionPoint common
stock that will be subject to the options assumed by ActionPoint in connection
with the merger.

ActionPoint's current stock option/stock issuance equity compensation plans
will not change as a result of the merger.  For a summary of the equity
compensation plans of the combined company, see the section entitled
"Information Concerning the Combined Company-Equity Compensation Plans of
the Combined Company" on page 139.

Treatment of Captiva Warrants

In the merger, the vested and unvested warrants to purchase shares of
Captiva common stock outstanding at the effective time will be converted into
warrants to purchase shares of ActionPoint common stock.  The number of shares
of ActionPoint common stock subject to the new warrants will be equal to the
number of shares of Captiva common stock subject to Captiva's converted warrants
multiplied by the exchange ratio, rounded down to the nearest whole number.  The
exercise price per share of ActionPoint common stock under the assumed Captiva
stock warrants will equal the exercise price per share of the Captiva common
stock under the original warrants divided by the applicable exchange ratio
rounded to the nearest whole cent.  For the reasons discussed above, the exact
exchange ratio and the number of shares of ActionPoint common stock subject to
the warrants cannot be determined prior to the effective time.

Based on outstanding warrants to purchase 500,000 shares of Captiva common
stock and an exchange ratio of approximately 0.0156 as of March 31, 2002, the
outstanding warrants to purchase Captiva common stock will be assumed by
ActionPoint and converted into warrants to purchase 7,805 shares of ActionPoint
common stock.

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Exchange of Shares

Fractional Shares.  ActionPoint will not issue any fractional
shares of ActionPoint common stock in the merger. Instead, each holder of shares
of Captiva capital stock exchanged pursuant to the merger who would otherwise
have been entitled to receive a fraction of a share of ActionPoint common stock
will be entitled to receive cash for that fractional share in an amount equal to
the fractional amount of ActionPoint common stock multiplied by the average
closing market price of ActionPoint common stock as quoted on The Nasdaq
National Market for the 30 trading-days preceding the day the merger is
completed.

Surrender of Shares of Captiva Capital Stock; Stock Transfer Books.
Soon after the effective time, ActionPoint will mail to each record holder of
any certificate representing Captiva capital stock a letter of transmittal
containing instructions for surrendering certificates in exchange for
ActionPoint common stock and for obtaining cash payment for fractional shares.
Each holder of certificates for Captiva stock who surrender their certificates
in accordance with these instructions will receive cash and certificates
representing their shares of ActionPoint common stock.  Each surrendered
certificate will be canceled.  Until surrendered as contemplated above, each
certificate representing Captiva stock will be deemed, at and after the
effective time of the merger, to represent only the right to receive the merger
consideration discussed above upon surrender of the certificate.

No Dividends or Distributions.  No dividends declared or other
distributions paid after the effective time of the merger by ActionPoint will be
paid to the holder of any certificate representing Captiva capital stock until
the certificate is surrendered.  Following the surrender of each certificate
representing shares of Captiva capital stock, ActionPoint will pay to the record
holder of the new certificates representing shares of ActionPoint capital stock
the amount of all dividends and distributions with a record date after the
effective time of the merger which would have been previously payable had the
certificates representing shares of Captiva capital stock been surrendered prior
to the declaration or distribution.

Lost Certificates.  If any Captiva certificate has been lost, stolen
or destroyed, the owner of the certificate must provide an affidavit to that
effect.  ActionPoint may require the owner of lost, stolen or destroyed Captiva
certificates to deliver a bond to ActionPoint as indemnity against any claim
that may be made against ActionPoint with respect to any Captiva certificates
alleged to have been lost, stolen or destroyed.

Affiliate Shares.  No shares of ActionPoint common stock will be
delivered to an affiliate of Captiva, as defined in Rule 145 of the Securities
Act, until the affiliate executes and delivers an affiliate agreement.

Appraisal and Dissenters' Rights

Holders of Captiva capital stock that have perfected their dissenters'
rights pursuant to Chapter 13 of the California General Corporation Law
will not have their shares of Captiva capital stock converted into ActionPoint
common stock.  Instead, their shares will be exchanged for cash payment
determined in accordance with Chapter 13 of the California General
Corporation Law.

ActionPoint stockholders are not entitled to appraisal or dissenters' rights
in connection with the merger.

If more than 7.5% of Captiva's stockholders perfect their dissenters' rights,
neither ActionPoint nor Captiva will be obligated to complete the merger.

Representations and Warranties

The merger agreement contains representations and warranties of
ActionPoint, Captiva and Condor Merger Corp.  The most significant of these
relate to:

- due organization, valid existence, qualification to do business and good
standing;
- organizational documents;
- subsidiaries;
- capitalization;

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- authority relative to the merger and the merger agreement;
- required consents, approvals and government filings;
- possession of and compliance with permits required to conduct their
businesses;
- the accuracy and completeness of their financial statements and the absence
of undisclosed liabilities in their businesses;
- the absence of changes in their businesses;
- litigation, arbitration, or judgments pending or threatened against them or
to which they are a party;
- employee benefit plans, labor agreements, employee compensation and
compliance with the Employee Retirement Income Security Act of 1974, or
ERISA;
- the validity, binding nature and absence of material defaults with respect
to their material contracts;
- compliance with laws related to environmental matters;
- the right to use, absence of infringement of intellectual property;
- compliance with laws related to taxes;
- stockholder votes required to approve the merger;
- title to property;
- transactions with their affiliates;
- insurance;
- broker's fees;
- state takeover statutes;
- customers and suppliers;
- the suspension of all negotiations and discussions regarding any other major
corporate transactions;
- corporate books and records; and
- the opinions of their respective financial advisors.

ActionPoint and Condor Merger Corp. have also made representations and
warranties relating to:

- the accuracy and completeness of documents and reports filed by ActionPoint
with the Securities and Exchange Commission;
- ActionPoint's rights agreement; and
- the operations of Condor Merger Corp.

The representations and warranties in the merger agreement are lengthy and
detailed and not easily summarized.  You are urged to read carefully Article III
of the merger agreement entitled "Representations and Warranties of the
Company" and Article IV of the merger agreement entitled
"Representations and Warranties of Parent and Merger Sub."

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None of the representations or warranties made by ActionPoint, Condor Merger
Corp. or Captiva contained in the merger agreement will survive after the
completion of the merger.

Conduct of Business Pending the Merger

ActionPoint and Captiva are subject to restrictions on their conduct and
operations until the merger is completed.  In the merger agreement, ActionPoint
and Captiva agreed that, prior to the effective time, each will:

- operate its business only in the usual and ordinary course and in a manner
consistent with past practices;
- use commercially reasonable efforts to maintain its business
organization;
- pay its debts and taxes when due; and
- retain its key employees and preserve its relationships with customers,
suppliers and others having business dealings with them.

ActionPoint and Captiva also agreed that, unless the other party consents in
writing, they will not do any of the following until the completion of the
merger:

- amend or change their articles or certificate of incorporation or
bylaws;
- issue, sell, grant or authorize, or propose the issuance, sale or grant of,
any shares of capital stock, convertible securities, rights, warrants, calls,
subscriptions or options, or any other ownership interest other than as
specifically permitted under the merger agreement;
- dispose of or grant an encumbrance on any material assets, except in the
ordinary course of business and in a manner consistent with past practice;
- declare, set aside or pay dividends or make any other distributions;
- split, combine, redeem or reclassify any capital stock;
- acquire any interest in or any assets of any corporation, partnership, other
business organization;
- initiate or settle any legal proceeding requiring a payment in excess of
$25,000 individually or $75,000 in the aggregate;
- incur any additional indebtedness for borrowed money or issue any debt
securities;
- authorize any capital expenditure in excess of $25,000 individually or
$75,000 in the aggregate;
- enter into any lease or contract for the purchase or sale of any property
except in the ordinary course of business and in a manner consistent with past
practice;
- waive or release any material right or claim, except in the ordinary course
of business and in a manner consistent with past practice;
- increase, or agree to increase, the compensation payable to their officers
or employees, except for the salaries or wages of its employees who are not its
officers in accordance with past practices;
- grant any severance or termination pay to, or enter into any employment or
severance agreement with, any of their directors, officers or other employees,
or enter into other plan, agreement or arrangement for the benefit of any
director, officer or employee, other than those required under ERISA;

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- make any bonus payment to any of their officers or employees unless such
payments are reflected in its balance sheet;
- change the exercise period or the vesting schedule of restricted stock or
options granted under any option plan, employee stock plan or other agreement or
authorize cash payments in exchange for options granted under any of the plans
except as specifically required by the terms of such plans or other
agreement;
- extend any offers of employment with an annual salary in excess of $100,000
to potential employees, consultants or independent contractors or terminate any
existing employment relationship without cause, except in the ordinary course of
business and in a manner consistent with past practice;
- amend or terminate any material contract;
- enter into any licensing, distribution, OEM agreements, sponsorship,
advertising, merchant program or other similar agreement that may not be
cancelled without penalties upon notice of 30 days or less, other than those
made in the ordinary course of business and in a manner consistent with past
practice;
- enter into any contract or agreement material to their business other than
sales contracts made in the ordinary course of business;
- make any unreasonable change to accounting policies, principles or
procedures that is not in the ordinary course of business and consistent with
past practice;
- take any action related to any material tax or accounting election, change
any accounting method or annual accounting period, file any amended tax return,
enter into any closing agreement, settle any tax claim or assessment, surrender
any right to claim refund of taxes, consent to any extension or waiver of the
limitation period applicable to any tax claim or assessment, or take any other
action or omit to take any action that would have the effect of increasing the
tax liability of Captiva or ActionPoint;
- sell, dispose of or grant any lien with respect to intellectual property,
grant any license with respect to any of their intellectual property, other than
a license of their software granted to their customers in the ordinary course of
business, develop, create or invent any intellectual property jointly with any
third party, or disclose, or allow to be disclosed, any of their confidential
intellectual property, unless the intellectual property is subject to a
confidentiality or non-disclosure covenant;
- revalue any of their assets;
- take any action or fail to take any action that would cause there to be a
material adverse effect;
- permit any insurance policy naming them as a beneficiary or a loss payable
payee to be cancelled or terminated without notice to the other party;
- write off as uncollectible, or establish any extraordinary reserve with
respect to, any account receivable or other indebtedness in excess of $25,000
with respect to a single matter or $50,000 in the aggregate; or
- agree to take any of the foregoing actions.

Each of Captiva and ActionPoint has agreed to notify the other of any event
or occurrence which would be likely to have a material adverse effect on that
party's business.  Each of Captiva ad ActionPoint has also agreed to notify the
other of any event or occurrence which would be likely to prevent that party
from complying with its obligations under the merger agreement in all material
respects or of any failure or inability to comply with the merger agreement in
all material respects.  Further, each party has agreed to notify the other of
any legal claim or action initiated by or against it.

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As it is used in the merger agreement, "material adverse effect"
means any changes in or effects on the business of ActionPoint or Captiva or
their subsidiaries that, individually or in the aggregate, could reasonably be
expected to be materially adverse to the business, operations, condition,
assets, liabilities, or results of operations of ActionPoint or Captiva or their
subsidiaries or adverse to ActionPoint's or Captiva's ability to perform its
obligations in the merger agreement.  However, the following changes and effects
by themselves or with others will not be considered in determining whether there
has been a material adverse effect on ActionPoint's or Captiva's business:

- any changes in general economic or business conditions that as a whole do
not disproportionately impact ActionPoint or Captiva or their subsidiaries;
- any changes affecting the industries in which ActionPoint or Captiva or
their subsidiaries operate that as a whole do not have a disproportionate impact
on ActionPoint or Captiva or their subsidiaries;
- any changes which result from the taking of any action expressly required by
the merger agreement; and
- any adverse event, change, circumstance or effect related to the
announcement of the merger.

Also, any change in the market price of ActionPoint's common stock, in and of
itself, will not be considered in determining whether there has been a material
adverse effect on ActionPoint's business.

Limitations on Considering Other Takeover Proposals

Until the merger is completed or the merger agreement is terminated,
Captiva and ActionPoint have agreed not to:

- directly or indirectly initiate, solicit or encourage the submission of a
proposal likely to lead to an acquisition transaction, as defined below;
- participate in discussions or negotiations regarding an acquisition
transaction; or
- furnish to any person any information or take any action to facilitate any
inquiries or the making of any proposal that constitutes, or may be reasonably
expected to lead to, an acquisition transaction.

An "acquisition transaction" means any of the following
involving ActionPoint or Captiva (other than the merger and the other
transactions contemplated by the merger agreement):

- a merger, consolidation, share exchange, business combination or other
similar transaction;
- any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of 20% or more of the assets of ActionPoint and its subsidiaries or Captiva and
its subsidiaries;
- a tender offer or exchange offer for, or any offer to purchase directly from
ActionPoint or Captiva, 20% or more of the outstanding voting securities of
ActionPoint or Captiva;
- any solicitation to oppose the approval of the merger agreement by
ActionPoint's or Captiva's stockholders; or
- any liquidation, dissolution, recapitalization or other significant
corporate reorganization of ActionPoint or Captiva.

Captiva and ActionPoint must immediately notify the other party upon receipt
of any acquisition proposal or offer or any inquiry or contact with any person
with respect to any acquisition proposal or offer and promptly deliver to the
other party a copy of the acquisition proposal, offer, inquiry or contact and
any other related written material that contains the principal terms of the
acquisition proposal or offer.

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Despite the restrictions described above, ActionPoint and Captiva may furnish
information to and enter into discussions or negotiations with any person who
has made an unsolicited, written, bona fide proposal or offer regarding an
acquisition transaction if the board of directors has:

- reasonably concluded after consultation with its financial advisor that the
proposal or offer constitutes a superior proposal, as defined below;
- reasonably concluded, after consultation with its outside legal counsel that
failing to furnish the information or enter into discussions may be a breach of
its fiduciary obligations to their stockholders under applicable law;
- provided written notice to the other party of its intent to furnish
information or enter into discussions with the person making the superior
proposal at least three business days prior to furnishing information or
entering into discussions; and
- obtained from the person making the superior proposal an executed
confidentiality agreement on terms no less favorable to ActionPoint or Captiva
than those contained in the non-disclosure agreement between these
parties.

In the merger agreement, a "superior proposal" means an unsolicited
written bona fide offer made by a third party to consummate an acquisition
transaction that:

- is not attributable to a material breach by the party receiving the proposal
of its non-solicitation obligations in the merger agreement;
- is on terms that the board of directors receiving the proposal determines in
good faith, based on the written advice of a reputable financial advisor, to be
more favorable to its stockholders from a financial point of view than the terms
of the merger; and
- has financing either committed or likely to be obtained by the third party
on a timely basis, if any financing is required to complete the transaction
contemplated by the offer.

Prior to the approval of the merger agreement and the merger by the requisite
vote of the stockholders of Captiva, nothing in the merger agreement prevents
Captiva's board of directors from withholding, withdrawing, amending, modifying
or changing its unanimous recommendation in favor of the merger if:

- Captiva receives a superior proposal that is not withdrawn;
- within 24 hours after receiving a superior proposal, Captiva provides
written notice to ActionPoint informing ActionPoint that Captiva has received a
superior proposal, specifying the material terms and conditions of the superior
proposal in reasonable detail and identifying the person or entity making the
superior proposal;
- ActionPoint has not, within 5 business days after receiving notice of the
superior proposal, made an offer that Captiva's board of directors by a majority
vote determines in good faith (after consultation with Captiva's financial
advisor) to be at least as favorable to Captiva and Captiva's stockholders as
the superior proposal;
- Captiva's board of directors concludes in good faith after consultation with
Captiva's outside legal counsel, that, in light of the superior proposal, the
withholding, withdrawal, amendment, modification or change of the recommendation
in favor of the merger is required in order for the Captiva board of directors
to comply with its fiduciary obligations to Captiva and Captiva's stockholders
under applicable law; and
- Captiva has not violated any of the non-solicitation restrictions contained
in the merger agreement.

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Prior to the approval of the share issuance by ActionPoint's stockholders,
nothing in the merger agreement prevents ActionPoint's board of directors from
withholding, withdrawing, amending, modifying or changing its unanimous
recommendation in favor of the merger if:

- ActionPoint receives a superior proposal that is not withdrawn;
- within 24 hours after receiving a superior proposal, ActionPoint provides
written notice to Captiva informing Captiva that ActionPoint has received a
superior proposal, specifying the material terms and conditions of the superior
proposal in reasonable detail and identifying the person or entity making the
superior proposal;
- Captiva has not, within 5 business days after receiving notice of the
superior proposal, made an offer that ActionPoint's board of directors, by a
majority vote, determines in good faith judgment (after consultation with
ActionPoint's financial advisor) to be at least as favorable to ActionPoint and
ActionPoint's stockholders as the superior proposal;
- ActionPoint's board of directors concludes in good faith after consultation
with ActionPoint's outside legal counsel that, in light of the superior
proposal, the withholding, withdrawal, amendment, modification or change of the
recommendation in favor of the merger is required in order for the ActionPoint
board of directors to comply with its fiduciary obligations to ActionPoint and
ActionPoint's stockholders under applicable law; and
- ActionPoint has not violated any of the non-solicitation restrictions
contained in the merger agreement.

ActionPoint and Captiva will provide the other party with at least 36 hours
notice of any meeting of its board of directors at which its board of directors
is reasonably expected to consider any acquisition transaction.

Other Covenants

Director and Officer Indemnification.  ActionPoint has agreed to
indemnify the officers and directors of Captiva for six years after the merger
to the same extent that those officers and directors are presently indemnified
through Captiva's articles of incorporation, bylaws or agreements with those
officers and directors.  ActionPoint has also agreed to obtain and maintain
director and officer liability insurance on behalf of Captiva's officers and
directors for six years following the merger.

Third-Party Approvals.  Captiva and ActionPoint have agreed to use
their reasonable best efforts to obtain all consents and make all filings with
governmental entities, which are necessary to be obtained by them to consummate
the merger.

Listing of ActionPoint Common Stock.  ActionPoint has agreed to use
its reasonable best efforts to cause the shares issued at the effective time to
be approved for quotation on The Nasdaq National Market.

Employee Benefits.  ActionPoint has agreed to take such reasonable
actions soon after the merger as are necessary to allow eligible employees of
Captiva to participate in ActionPoint's benefit programs or alternative benefit
programs available to the employees of ActionPoint.

Affiliate Agreements.  Captiva has agreed to have each of its
affiliates enter into an affiliate agreement with ActionPoint related to
compliance by the affiliates with the federal securities laws.

Plan of Reorganization.  The merger agreement is intended to
constitute a "plan of reorganization" within the meaning of section
1.368-2(g) of the income tax regulations promulgated under the Internal Revenue
Code.

Until the effective time of the merger, ActionPoint, Captiva and Condor
Merger Corp. each agree to use its commercially reasonable efforts to cause the
merger to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken, which
action or failure to act could prevent the merger from qualifying, as a
reorganization under Section 368(a) of the Internal Revenue Code.

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Following the effective time of the merger, the surviving corporation,
ActionPoint and their affiliates must not knowingly take any action, cause any
action to be taken, fail to take any action or cause any action to fail to be
taken, which action or failure to act could cause the merger to not qualify as a
reorganization under Section 386(a) of the Internal Revenue Code.

Lock-Up Agreements.  Captiva has agreed to use reasonable efforts to
have all of the holders of its preferred stock enter into a lock-up agreement
with ActionPoint, which will restrict those stockholders from transferring their
shares of ActionPoint common stock received in the merger.  Under the lock-up
agreement, one half of the shares received by each Captiva stockholder entering
into a lock-up agreement cannot be transferred for 90 days after the merger and
the other half cannot be transferred for 180 days after the merger.

Promissory Note Amendment Agreement.  Captiva and ActionPoint have
agreed to use their best efforts to have all of the holders of Captiva's
promissory notes enter into an agreement to amend the notes.  The affiliates of
Captiva have already entered into such an agreement.

ActionPoint Name Change.  ActionPoint has agreed to use its best
efforts to obtain the approval of its stockholders to change its name to Captiva
Software Corporation at the effective time of the merger.

Certain Other Covenants.  The merger agreement contains certain other
mutual covenants of ActionPoint and Captiva.  The most significant are to:

- provide to the other party and its employees, officers, directors and
representatives, access to its books and records;
- maintain the confidentiality of the information obtained from the other
party in accordance with the confidentiality agreement between the parties;
- refrain from issuing any press release or otherwise making any public
statement or other public disclosure regarding the merger or the merger
agreement prior to obtaining the written consent of the other party unless
otherwise required under applicable law or the requirements of The Nasdaq
National Market;
- notify the other party of any claim, suit, or other action initiated by or
against them or their representatives or stockholders;
- notify the other party of the occurrence or non-occurrence of any event
which could result in any condition required for the merger not to be satisfied;
and
- take all actions reasonably necessary to comply with legal requirements and
obtain all consents and approvals necessary to complete the merger.

Conditions to Completing the Merger

Conditions to Each Party's Obligation.  The obligations of
ActionPoint, Captiva and Condor Merger Corp. to complete the merger are subject
to the satisfaction or waiver of certain conditions, including the
following:

- the approval of the merger, the merger agreement, the amendment and
restatement of Captiva's articles of incorporation and the conversion of all the
shares of Captiva preferred stock into Captiva common stock by the requisite
vote of Captiva's stockholders and the approval of the share issuance by
ActionPoint's stockholders;
- there must be no order, injunction or other legal restraint that prohibits
consummation of the merger and pending or threatened litigation by any
government entity that seeks to enjoin or prohibit the consummation of the
merger;

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- the effectiveness of ActionPoint's registration statement on Form S-4
and the absence of any stop order suspending such effectiveness or any action,
suit, proceeding or investigation by the Securities and Exchange Commission to
suspend such effectiveness;
- the approval of the listing of shares of ActionPoint common stock to be
issued in the merger on The Nasdaq National Market;
- the amendment and restatement of Captiva's articles of incorporation must be
effective;
- stockholders holding no more than 7.5% of Captiva's common stock outstanding
immediately prior to the effective time shall have perfected their dissenters'
rights under the California General Corporation Law;
- a sufficient number of holders of Captiva's preferred stock must have
elected to convert their shares into Captiva common stock so that all of
Captiva's preferred stock can be converted into common stock of Captiva under
Captiva's articles of incorporation;
- the approval of the amendment to Captiva's promissory notes by the holders
of at least 50% of the principal amount of each series of Captiva's 2 series of
notes;
- the election by the holders of at least 75% of the outstanding principal
amount under Captiva's amended promissory notes to convert their notes into
Captiva common stock immediately prior to the effective time of the merger;
and
- the change of ActionPoint's name to Captiva Software Corporation.

Conditions to the Obligations of ActionPoint and Condor Merger Corp.
The obligation of ActionPoint and Condor Merger Corp. to complete the merger is
subject to the satisfaction, or ActionPoint's waiver, of the following
conditions before completion of the merger:

- Captiva's representations and warranties in the merger agreement being true
and correct as of the closing date, as though made on and as of the closing
date, except where the failure to be true and correct does not result in a
material adverse effect on Captiva;
- Captiva will have complied with all agreements and covenants required of it
in the merger agreement ;
- Captiva will have received all authorizations and approvals required by any
government entity or third party;
- ActionPoint will have received a written opinion from tax counsel for
ActionPoint to the effect that the merger will constitute a reorganization
within the meaning of Section 368 of the Internal Revenue Code;
- ActionPoint will have received executed affiliate agreements from all of
Captiva's affiliates, which are effective as of the date of completion of the
merger;
- ActionPoint will have received a certificate executed by Captiva's secretary
certifying as to customary matters, including Captiva's organizational documents
and resolutions of Captiva's board of directors and stockholders approving the
merger agreement and related matters;
- ActionPoint will have received a FIRPTA certificate; and
- Captiva will have terminated its stockholders' agreement, investors' rights
agreement and security agreement with certain Captiva stockholders and holders
of the promissory notes issued by Captiva and terminated any board observation
and management rights granted to certain Captiva stockholders.

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Conditions to the Obligations of Captiva.  The obligation of Captiva
to complete the merger is subject to the satisfaction, or Captiva's waiver, of
the following conditions before the completion of the merger:

- ActionPoint's representations and warranties in the merger agreement being
true and correct as of the closing date, as though made on and as of the closing
date, except where the failure to be true and correct does not result in a
material adverse effect on ActionPoint;
- ActionPoint will have complied with all agreements and covenants required of
it on the merger agreement;
- ActionPoint will have received all authorizations and approvals required by
any government entity or third party;
- ActionPoint will have received written letters of resignation that have not
been revoked or rescinded from John Finegan, Thomas van Overbeek and Daniel
Tompkins, and ActionPoint's board of directors will have adopted, by at least a
majority vote, resolutions that have not been revoked or rescinded electing
Reynolds Bish, Mel Lavitt and Jim Berglund to fill the vacancies on
ActionPoint's board of directors;
- Captiva will have received a written opinion from tax counsel for Captiva to
the effect that the merger will constitute a reorganization within the meaning
of Section 368 of the Internal Revenue Code; and
- Captiva will have received a certificate executed by ActionPoint's secretary
certifying as to customary matters, including ActionPoint's organizational
documents and resolutions of ActionPoint's board of director and stockholders
approving the merger and related matters.

Termination

ActionPoint and Captiva may agree by mutual written consent to terminate
the merger agreement at any time before the merger is completed.  In addition,
either party may terminate the merger if:

- the merger is not completed, without the fault of the terminating party, by
July 31, 2002;
- a final court order prohibiting the merger is issued and cannot be
appealed;
- Captiva's stockholders do not approve merger, the merger agreement and the
amendment to Captiva's articles, unless it is because of that party's failure to
perform a material obligation under the merger agreement;
- ActionPoint's stockholders do not approve the share issuance, unless it is
because of that party's failure to perform a material obligation under the
merger agreement; or
- the holders of at least 75% of the outstanding principal amount under
Captiva's promissory notes do not convert their promissory notes into Captiva
common stock immediately prior to the effective time of the merger, unless it is
because of that party's failure to perform a material obligation under the
merger agreement.

In addition to the above, ActionPoint may terminate the merger agreement if
any of the following occur:

- Captiva's board of directors withholds, withdraws, amends, modifies or
changes its unanimous recommendation of the merger;
- Captiva's board of directors recommends that Captiva's stockholders enter
into an acquisition transaction, or resolves to do so, or enters into any letter
of intent, agreement, contract or commitment relating to an acquisition
transaction;

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- Captiva's board of directors fails to reject an acquisition transaction
within 10 days following the public announcement or receipt of the
proposal;
- Captiva fails to include in this joint proxy statement/prospectus the
unanimous recommendation of its board of directors in favor of the merger or
fails to distribute to its stockholders an action by written consent to vote on
the approval of the merger within 45 days after the registration statement
containing this joint proxy statement/prospectus is declared effective;
- Captiva's board of directors fails to reaffirm its unanimous recommendation
to vote in favor of approving the merger, the merger agreement and the amendment
and restatement of Captiva's articles of incorporation within 5 business days
after ActionPoint requests in writing that the recommendation be
reaffirmed;
- Captiva willfully breaches its non-solicitation obligations; or
- Captiva breaches any representation, warranty, covenant or agreement set
forth in the merger agreement and does not cure the breach within 30 days after
receiving notice of the breach.

Similarly, Captiva may terminate the merger agreement if:

- ActionPoint's board of directors withholds, withdraws, amends, modifies or
changes its unanimous recommendation of the merger;
- ActionPoint's board of directors recommends that ActionPoint's stockholders
enter into an acquisition transaction, or resolves to do so, or enters into any
letter of intent, agreement, contract or commitment relating to an acquisition
transaction;
- ActionPoint's board of directors fails to reject an acquisition transaction
within 10 days following the public announcement or receipt of the
proposal;
- ActionPoint fails to include in this joint proxy statement/prospectus the
unanimous recommendation of its board of directors in favor of the merger or
fails to hold a meeting of its stockholders to vote on the approval of the
merger, within 45 days after the registration statement containing this joint
proxy statement/prospectus is declared effective;
- ActionPoint's board of directors fails to reaffirm its unanimous
recommendation to vote in favor of the merger within 5 business days after
Captiva requests in writing that the recommendation be reaffirmed;
- ActionPoint willfully breaches its non-solicitation obligations; or
- ActionPoint breaches any representation, warranty, covenant or agreement set
forth in the merger agreement and does not cure the breach within 30 days after
receiving notice of the breach.

Termination Fee and Expense Reimbursement

The merger agreement provides that, if the agreement is terminated, all
fees and expenses will be paid by the party incurring them, except as described
below.

Payments by Captiva.  Captiva will pay 50% of the first $20,000 of all
expenses incurred in connection with preparing, printing, filing and mailing the
joint proxy statement/prospectus, including fees for services provided by
counsel, accountants and consultants.  In addition, Captiva will pay ActionPoint
up to $250,000 for ActionPoint's expenses if the merger agreement is terminated
because:

- Captiva's board of directors withdraws its recommendation of the merger,
recommends a superior proposal, fails to reject a superior proposal within 10
days after it is received, does not distribute to its stockholders an action by
written consent of its stockholders within 45 days after the registration
statement becomes effective, breaches its non-solicitation obligations or fails
to reaffirm its

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recommendation in support of the merger within 5 business days
after ActionPoint requests the reaffirmation;

- Captiva's stockholders do not approve the merger, the merger agreement and
the amendment to Captiva's articles; or
- the holders of at least 75% of the outstanding principal amount under
Captiva's promissory notes do not convert their promissory notes into Captiva
common stock immediately prior to the effective time of the merger.

Captiva will pay ActionPoint an additional $100,000 under certain
circumstances if Captiva enters into an acquisition transaction within 4 months
after the merger agreement is terminated.

Payments by ActionPoint.  ActionPoint will pay Captiva up to $250,000
for Captiva's expenses if the merger agreement is terminated because:

- ActionPoint's board of directors withdraws its recommendation of the merger,
recommends a superior proposal, fails to reject a superior proposal within 10
days after it is received, does not hold a stockholders' meeting within 45 days
after the registration statement becomes effective, breaches its non-
solicitation obligations or fails to reaffirm its recommendation in support of
the merger and changing ActionPoint's name within 5 business days after Captiva
requests the reaffirmation; or
- ActionPoint's stockholders do not approve the share issuance.

ActionPoint will also pay Captiva an additional $100,000 under certain
circumstances if ActionPoint enters into an acquisition transaction within 4
months after the merger agreement is terminated.

Amendment and Waiver

ActionPoint and Captiva may amend the merger agreement at any time with a
written statement executed by each of the parties and in accordance with
applicable law.

At any time prior to the effective time, each of ActionPoint or Captiva may
unilaterally:

- extend the time for the performance of any of the obligations or other acts
of the other party required by the merger agreement;
- waive any inaccuracies in the representations and warranties made to the
other party in the merger agreement or in any document delivered pursuant to the
merger agreement; and
- waive compliance with any of the agreements or conditions contained in the
merger agreement for the benefit of the other party.

Related Matters after the Merger

The articles of incorporation and the bylaws of Condor Merger Corp.
in effect immediately prior to the effective time will become the articles of
incorporation and bylaws of Captiva.  Captiva's name after the merger will be
Condor Merger Corp.

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OTHER AGREEMENTS

The following is a summary of the material provisions of the
ActionPoint voting agreements, Captiva voting agreements, affiliate agreements,
lock-up agreements, employment offer letters, severance agreements and amendment
to rights agreement.  Copies of the form ActionPoint voting agreement, form
Captiva voting agreement, form affiliate agreement, and forms of lock-up
agreements are included as Annexes E, F, G, and H, respectively, to this joint
proxy statement/prospectus. The following is not a complete description of all
the provisions of these agreements, and you are urged to read in their entirety
the form ActionPoint voting agreement, form Captiva voting agreement, form
affiliate agreement and form lock-up agreements. This summary is qualified in
its entirety by reference to the full text of these agreements.

Voting Agreements

ActionPoint Voting Agreements.In connection with the
signing of the merger agreement, each of ActionPoint's executive officers and
directors, Matthew Albanese, Patrick Edsell, John Finegan, Stephen Francis,
Kimra Hawley, Thomas van Overbeek, David Sharp, Bruce Silver, John Stetak,
Daniel Tompkins and Jim Vickers, entered into a voting agreement, the
ActionPoint voting agreements, with Captiva.  These ActionPoint voting
agreements require ActionPoint's executive officers and directors to vote all
outstanding shares of ActionPoint common stock (including common stock issued
pursuant to all options, warrants and other rights to acquire shares of
ActionPoint common stock) they beneficially own or may acquire:

- in favor of the approval of the issuance of shares of ActionPoint common
stock pursuant to the merger;
- against certain acquisition transactions or other actions that could
reasonably be expected to delay the approval of the merger;
- against any action or agreement that could reasonably be expected to result
in the breach of any covenant, representation or warranty or any other
obligation or agreement of ActionPoint under the merger agreement or that could
reasonably be expected to result in any of the conditions to ActionPoint's
obligations under the merger agreement not being fulfilled; and
- in favor of any other matter relating to the consummation of the
transactions contemplated by the merger agreement.

As of June 4, 2002, the record date for the ActionPoint
stockholders' meeting, the stockholders who entered into the ActionPoint voting
agreements with Captiva collectively held approximately          
outstanding shares of ActionPoint common stock, which then represented
approximately 10.1% of the outstanding shares of ActionPoint common stock.
None of ActionPoint's stockholders who entered into an ActionPoint voting
agreement was paid additional consideration in connection with entering into the
agreement.  The ActionPoint voting agreements terminate on the date of
termination of the merger agreement.  The form of the voting agreement entered
into by ActionPoint's executive officers and directors is attached to this joint
proxy statement/prospectus as Annex E.

Captiva Voting Agreements.In connection with the signing of
the merger agreement, Captiva's executive officers, directors and certain
stockholders and affiliates of Captiva, including Reynolds Bish, Steven Burton,
Rick Russo, Blaine Owens, Randall Stern, James Murrin, Baird Brueseke, James
Haley, Jim Berglund, Shirley Cerrudo, John Jones, Mel Lavitt, Jordan Libit,
Edward Pendergast, Nissho Electronics, entities affiliated with C.E. Unterberg,
Towbin, entities affiliated with Enterprise Partners Venture Capital and
entities affiliated with Novus Ventures L.P. entered into voting agreements, the
Captiva voting agreements, with ActionPoint.  These Captiva voting agreements
require those executive officers, directors, stockholders and affiliates of
Captiva who entered into the voting agreements to vote all shares of Captiva
capital stock (including capital stock issued pursuant to all options, warrants
and other rights to acquire shares of Captiva capital stock) they beneficially
own or may acquire:

- in favor of the approval of the merger, the principal terms of the merger
agreement and other transactions contemplated by the merger agreement, the
amendment and restatement of Captiva's articles of incorporation and the
conversion of all the shares of Captiva preferred stock into shares of Captiva
common stock;

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- against certain acquisition transactions or other actions that could
reasonably be expected to delay the approval of the merger;
- against any action or agreement that could reasonably be expected to result
in the breach of any covenant, representation or warranty or any other
obligation or agreement of Captiva under the merger agreement or that could
reasonably be expected to result in any of the conditions to ActionPoint's
obligations under the merger agreement not being fulfilled; and
- in favor of any other matter relating to consummation of the transactions
contemplated by the merger agreement.

As of March 31, 2002, Captiva's directors, officers, stockholders and
affiliates who entered into the voting agreements with ActionPoint collectively
held:

- 10,897,412 outstanding shares of Captiva common stock, which then
represented approximately 46% of the outstanding Captiva common stock;
- 3,323,388 outstanding shares of Captiva Series A preferred stock, which then
represented approximately 100% of the outstanding Captiva Series A
preferred stock;
- 1,156,539 outstanding shares of Captiva Series B preferred stock, which then
represented approximately 100% of the outstanding Captiva Series B
preferred stock;
- 1,734,802 outstanding shares of Captiva Series C preferred stock, which then
represented approximately 60% of the outstanding Captiva Series C preferred
stock;
- 769,231 outstanding shares of Captiva Series D preferred stock, which then
represented approximately 100% of the outstanding Captiva Series D preferred
stock; and
- 7,563,561 outstanding shares of Captiva Series E preferred stock, which then
represented approximately 49% of the outstanding Captiva Series E preferred
stock.

The approval of the majority of the shares of each of the foregoing classes
and series of Captiva's capital stock is required to approve the merger.

None of Captiva's directors, officers, stockholders or affiliates who entered
into the voting agreements with ActionPoint was paid additional consideration in
connection with entering into the agreement.  The Captiva voting agreements
terminate on the date of termination of the merger agreement.  The form of the
voting agreement entered into by Captiva's executive officers, directors,
stockholders and affiliates is attached to this joint proxy statement/prospectus
as Annex F.

Affiliate Agreements

Prior to the closing of the merger, ActionPoint will enter into affiliate
agreements with those directors, officers and stockholders of Captiva who are
affiliates of Captiva within the meaning of the Securities Act.  Pursuant to
these agreements, each Captiva affiliate will agree not to dispose of his, her
or its shares of ActionPoint common stock received in the merger unless the
disposition is permitted under the rules and regulations of the federal
securities laws.  The form of affiliate agreement is attached to this joint
proxy statement/prospectus as Annex G.

Lock-Up Agreements

In connection with the signing of the merger agreement, Captiva's
executive officers, directors, stockholders and affiliates and ActionPoint's
executive officers and directors entered into lock-up agreements.  The lock-up
agreements require the signing stockholders not to sell, transfer, pledge or
otherwise dispose of, or reduce an interest in or risk relating to:

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- one-half of his, her or its shares of ActionPoint common stock held,
received and issuable upon the exercise of options for 90 days following the
effective time of the merger; and
- the remaining one-half of his, her or its shares of ActionPoint common stock
held, received and issuable upon the exercise of options for 180 days following
the effective time of the merger.

The forms of lock-up agreements are attached to this joint proxy
statement/prospectus as Annex H.

Employment Offer Letters

In connection with the merger, ActionPoint entered into an offer letter
agreement, or letter agreement, with each of Reynolds Bish and Rick Russo.  The
letter agreements will become effective upon the completion of the merger.  Each
letter agreement sets forth the employee's position, compensation and
eligibility to participate in the benefit plans of the combined company.  Under
the terms of the letter agreements, Messrs. Bish and Russo will be at-will
employees and each will be entitled to severance benefits in the event his
respective employment with the combined company is terminated without cause.

In the event Mr. Bish is terminated without cause, he would be entitled to
receive severance payments in the form of continued payments of his then base
salary, subject to payroll deductions and withholdings, for a period of 12
months following his termination and reimbursement for monthly premiums paid by
Mr. Bish under COBRA until the earlier of 12 months following his termination
date or the date he begins to receive substantially equivalent health insurance
coverage in connection with new employment or self-employment.

In the event Mr. Russo is terminated without cause, he would be entitled to
receive severance payments in the form of continued payments of his then base
salary, subject to payroll deductions and withholdings, for a period of 6 months
following his termination and reimbursement for monthly premiums paid by Mr.
Russo under COBRA until the earlier of 6 months following his termination date
or the date he begins to receive substantially equivalent health insurance
coverage in connection with new employment or self-employment.

The terms of the letter agreements provide that only the following are
grounds for termination for "cause," to be decided in good faith by
the board of directors of the combined company:

- the employee's willful breach of any material provision of the letter
agreement or any other material agreement between the employee and the combined
company as long as the employee has been given written notice of the breach by
the board and the employee has had a reasonable opportunity to cure the breach
if it is curable;
- the employee's dishonesty, willful misconduct, or breach of fiduciary duty
involving personal profit or acts adverse to the best interests of the combined
company and its stockholders;
- the employee's commission, conviction of, or a plea of guilty or no contest
to, a felony under the laws of any state or the United States;
- the employee's failure to comply with any commercially reasonable policies
or directives adopted by the board in good faith; or
- the employee's willful misconduct in the performance of his duties that the
board decides is materially detrimental to the business of the combined
company.

In addition, in the event either of Messrs. Bish or Russo is terminated
without cause within 12 months following a change of control of the combined
company, in addition to the severance payments and benefits described above, all
stock options held by him would automatically become fully vested.  The letter
agreements provide that "change of control" shall mean:

- a sale or other disposition of all or substantially all of the assets of the
combined company;

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- a merger or consolidation in which the combined company is not the surviving
entity and in which the stockholders of the combined company immediately prior
to such consolidation or merger own less than 50% of the surviving entity's
voting power immediately after the transaction; or
- a reverse merger in which the combined company is the surviving entity but
the stockholders of the combined company immediately prior to such reverse
merger own less than 50% of the combined company's voting power immediately
after the transaction.

Severance Agreements

In connection with the negotiation of the merger with Captiva,
ActionPoint entered into new severance agreements with the following executive
officers: Stephen Francis, John Finegan, John Stetak, Matthew Albanese,
James Vickers and David Sharp.  Prior to entering into the new severance
agreements, ActionPoint had existing severance agreements with
Stephen Francis, John Finegan, John Stetak and Matthew Albanese.

Existing Severance Agreements.  Under the existing severance
agreements, the executives are entitled to severance benefits only upon a change
in control of ActionPoint, which would not include the merger with Captiva.  For
a more detailed description of the existing severance agreements, see
"Information Concerning ActionPoint- Executive Compensation and Related
Information for ActionPoint's Executive Officers" on page 104.

New Severance Agreements.  In general, as a result of the merger with
Captiva, each of Messrs. Francis, Finegan, Albanese, Vickers and Sharp
may be entitled to severance benefits if they resign or are terminated following
the merger.  Mr. Stetak's employment will terminate effective upon the merger
or shortly thereafter, and therefore he will likely be entitled to severance benefits at
that time. Specifically, under the new severance agreements, Messrs. Francis,
Finegan, Stetak, Albanese, Vickers and Sharp will each be entitled to severance
benefits if:

- within 12 months after the merger with Captiva, ActionPoint terminates the
officer's employment without cause;
- within 1 month after the merger with Captiva for Mr. Francis, and within 3
months after the merger for the remaining executives, the executive resigns for
good reason, as defined below, which does not include resigning as a result of a
material reduction in his authority or responsibility; or
- from 2 to 6 months after the merger for Mr. Francis, from 4 to 9 months
after the merger for Mr. Finegan, and from 4 to 6 months after the merger for
the remaining executives, the executive resigns for good reason.

The new severance agreements generally provide that an executive's
resignation will be for "good reason" if the executive:

- has incurred a material reduction in his authority or responsibility so that
the executive's position is no longer comparable to the position that he held
before the merger with Captiva;
- has incurred a reduction of more than 10% in his base salary;
- has been notified that his principal place of work will be relocated and the
executive's commuting distance will increase by more than 40 miles or require
the executive to change residences; or
- becomes employed by a successor to ActionPoint and the successor fails to
assume the executive's new severance agreement.

Under his new severance agreement, Mr. Francis will be entitled to a lump sum
severance payment equal to 100% of his annual base compensation and group
insurance coverage for 12 months after his employment with ActionPoint ends.
Under his new severance agreement, Mr. Finegan will be entitled to a lump sum
severance payment equal to 83% of his annual base compensation and group
insurance coverage for 10 months after his employment with ActionPoint ends.
Each of the remaining executives will be entitled to a lump sum severance

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However,
group insurance for each executive will terminate when the
executive becomes
eligible for comparable coverage in connection with new employment or self-
employment.  The new severance agreements also entitle the executives to
prorated bonuses for the year in which their employment ends.  Further, the
executives will be entitled upon termination to exercise any options to purchase
ActionPoint stock for 12 months following the date of termination (or the later
of 12 months following date of termination or February 15, 2004 in the case
of Mr. Finegan), to the extent those options were exercisable at the time of
termination.  As a condition to providing the foregoing benefits, ActionPoint
may require that the executive remain employed for up to 90 days commencing on
the date he gives notice of his intent to resign to ensure an orderly transition
of the executive's duties and may require that the executive execute a release
of all claims that he may have against ActionPoint or its affiliates.

Amendment to Rights Agreement

In connection with the merger agreement, the rights agreement between
ActionPoint and EquiServe Trust Company, N.A. was amended.  Under the amendment,
the execution of the merger agreement and voting agreements and the consummation
of any of the transactions contemplated by the merger agreement will not trigger
any rights under the rights agreement.  See "Description of ActionPoint
Capital Stock-Stockholder Rights Plan" on page 159 for an explanation of
ActionPoint's rights agreement.

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THE NOTE CONVERSION

The following is a summary of the material provisions of the note
amendment agreement and note conversion agreement, copies of which are included
as Annex I and Annex J to this joint proxy statement/prospectus.  The following
is not a complete description of all provisions of the note amendment agreement
and note conversion agreement, and you are urged to read the entire note
amendment agreement and the note conversion agreement.  This summary is
qualified in its entirety by reference to the full text of the note amendment
agreement and note conversion agreement.

General

As of March 31, 2002, Captiva had two series of promissory notes
outstanding in the aggregate principal amount of approximately $8,087,877.  The
first series of notes issued by Captiva, amended and restated senior
subordinated notes, or the senior notes, contain different terms and rights than
the second series of notes issued by Captiva, subordinated secured convertible
notes, or the convertible notes.  The rights of Captiva's senior notes and
convertible notes are discussed in more detail below.

The merger agreement, requires that all of the outstanding promissory notes be amended
and at least 75% of the amended notes be converted into shares of Captiva common stock.
The amendment of the
promissory notes and conversion of the amended promisory notes, if approved, will be
effective immediately prior to and contingent upon the
merger.  To do this, the holders of the promissory notes have been or will be asked to
enter into a note amendment agreement and a note conversion agreement.  The
approval of the holders of at least 50% of the aggregate principal amount of the
senior notes and the holders of at least 50% of the aggregate principal amount
of the convertible notes is required to approve the amendment of all of the notes.  As
of March 31, 2002, holders of 50.5% of the principal amount of the senior notes
and holders of 46.9% of the principal amount of the convertible notes have
approved the note amendment agreement
and the holders of promissory notes representing approximately 44% of the total
principal amount of the amended notes have executed note conversion agreements.
Captiva is delivering to each holder of
its outstanding promissory notes that has not already agreed to amend its promissory notes
and convert its amended promissory notes a solicitation of the approval of the note
amendment agreement and note conversion agreement with this joint proxy
statement/prospectus.  These other holders of promissory notes are not obligated to enter
into the note amendment agreement and note conversion agreement.

The amended senior notes and amended convertible notes, or the amended notes,
will have similar terms.  Each amended note will bear up to 6% interest per year
which will be payable by Captiva on a quarterly basis. Captiva's obligations to
repay any principal amount of, and pay any interest on, the notes will be
subordinated to many of Captiva's other financial obligations which arise from
time to time.  This generally means that Captiva will be prevented from paying
any principal or interest on the notes if that payment would violate any of
Captiva's other agreements or interfere with its ability to meet its other
financial obligations.

In addition, at any time prior to the merger, each noteholder may agree to
convert all of the outstanding principal and accrued interest under his, her or
its amended note or notes into shares of Captiva common stock.  Each
noteholder's agreement to convert will only be effective when and if the note
amendment agreement becomes effective immediately prior to the merger.  Upon
conversion, each noteholder will receive shares of Captiva common stock based on
a conversion price described in the amended notes.  The merger agreement
requires that the holders of at least 75% of the aggregate principal amount of
the amended notes convert their notes into Captiva common stock in order to
complete the merger.  As of March 31, 2002, holders of 48.7% of the principal
amount outstanding under the amended notes have agreed to convert their amended
notes prior to the merger by entering into the note conversion agreements.

Background of the Note Conversion

Background of the Notes.  Captiva originally issued the senior
notes in the aggregate principal amount of approximately $4,087,877 in December
1998.  In August 2000, Captiva and the holders of the senior notes amended the
terms of the senior notes.  The senior notes currently bear 6% simple interest
per year.  The interest is payable semi-annually on the last business day of
March and September of each year in shares of Captiva's Series E preferred stock
based on a value of $0.79 per share.  The senior notes were due and payable on
March 29, 2002,

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In connection with the amendment of the senior notes, Captiva also issued the
convertible notes in the aggregate principal amount of $4,000,000 to many of the
same holders of the senior notes.  The convertible notes also bear 6% simple
interest per year, payable semi-annually on the last business day of March and
September of each year.  Interest on the convertible notes is payable in cash.
The convertible notes are convertible into shares of Captiva's Series E
preferred stock at a conversion price of $0.3029 per share, at any time, at the
election of the noteholder.  The convertible notes were due and payable on March
31, 2002, subject to the occurrence of certain events, including the pendency of
the merger.  As such, payment on the notes has been deferred.

The Merger and the Notes.  During the negotiations of the terms of the
merger between ActionPoint and Captiva, ActionPoint requested that at least 75%
of the outstanding promissory notes be converted into shares of Captiva common
stock prior to the merger.  Captiva agreed to ActionPoint's proposal, and
representatives of Captiva's senior management began preliminary discussions
with C. E. Unterberg, Towbin, as a representative of the noteholders.

The Special Committee.  On December 5, 2001, Captiva's board of
directors established an independent special committee to evaluate, negotiate
and recommend strategic alternatives relating to the amendment and conversion of
Captiva's outstanding notes.  The special committee was formed because 3 members
of Captiva's board of directors, Messrs. Berglund and Lavitt and Ms. Cerrudo,
are affiliated with entities that hold notes of Captiva.  In determining whether
to recommend the merger agreement to Captiva's stockholders, the board relied in
part on the special committee's determination that the note amendment agreement
and the conversion price are fair to Captiva's stockholders who are not holders
of Captiva's notes.  See "The Merger-Background of the Merger" on
page 41.

The board nominated Messrs. Libit and Pendergast, members of Captiva's board
who are not affiliated with any entities that hold notes of Captiva, to serve as
members of the special committee of the board.  Captiva's board delegated to the
special committee the power and authority to:

- negotiate on behalf of Captiva with the representatives of the holders of
the promissory notes a conversion price which is fair to the stockholders of
Captiva who are not holders of the notes;
- review and evaluate the terms and conditions of the note amendment agreement
and the note conversion agreement; and
- recommend to the full board what action, if any, Captiva should take with
respect to the note amendment agreement and the note conversion
agreement.

On December 11, December 12 and December 13, 2002, the special committee had
a series of organizational meetings with representatives of Captiva's management
and Captiva's outside legal advisor, Cooley Godward LLP.  The special committee
discussed the parameters of its charter and was advised by outside legal counsel
of the scope of its fiduciary duties under applicable laws.  After discussion,
and upon the advice of outside legal counsel, the special committee decided to
seek and retain an independent financial advisor to the special committee for
the purpose of rendering an opinion, from a financial point of view, on the
terms of the note conversion.  The special committee noted that, although
Captiva had retained C.E. Unterberg, Towbin as a financial advisor in connection
with the note conversion, C.E Unterberg, Towbin is an interested party and could
not, therefore, serve as an independent financial advisor to the special
committee.  See "The Merger-Interests of C.E. Unterberg, Towbin" for a
discussion of C.E. Unterberg, Towbin's interests in the merger.

On January 4, 2002, at the advice of its legal counsel, the special committee
engaged Houlihan Lokey to act as its financial advisor and render an opinion on
the fairness from a financial point of view of the note conversion.

Between January 3, 2002 and January 25, 2002, the special committee conducted
4 separate conference calls to negotiate the terms of the note conversion with
representatives of C. E. Unterberg, Towbin.  During the course of the
negotiations, at the request of the special committee, Houlihan Lokey provided
the special committee with various data related to the financial fairness
analysis of the note conversion.  During the course of the negotiations,

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On January 28, 2002, the special committee conducted a series of conference
call negotiation sessions with representatives of C. E. Unterberg, Towbin during
which C. E. Unterberg, Towbin rejected the special committee's proposals for a
conversion rate which would result in less than 80% post-conversion ownership
interest in Captiva for the holders of the notes.  Following these negotiations,
the special committee received a confirmation from Houlihan Lokey that Houlihan
Lokey was prepared to render an opinion to the Captiva board of directors to the
effect that the 80% post-conversion ownership interest for the noteholders is
fair from a financial point of view to the stockholders of Captiva who are not
holders of the notes.  After a final conference call with C. E. Unterberg,
Towbin in which the special committee agreed to C. E. Unterberg, Towbin's
proposed  note conversion price,  the special committee indicated to the full
board of Captiva that an agreement has been reached on the note conversion
pricing.

On January 30, 2002, the board of directors of Captiva together with the
special committee to the board conducted a joint special telephonic meeting.
Representatives of Houlihan Lokey made a presentation to the special committee
in the presence of the full board regarding the financial aspects of the
proposed note conversion in connection with the merger with ActionPoint.
Representative of Houlihan Lokey orally advised the special committee and the
full board that the proposed terms of the note conversion are fair from a
financial point of view to the stockholders of Captiva who are not holders of
the notes.  Following the presentation of Houlihan Lokey, the special committee
recommended to the full board that the full board may proceed with the proposed
transaction with ActionPoint on the terms of the note conversion as recommended
by the special committee.

Reasons for the Note Conversion

After full and careful deliberation and consideration of the note
amendment agreement and the note conversion agreement, the special committee
unanimously determined that the terms of the note amendment agreement and note
conversion agreement are advisable and are fair to, and in the best interests
of, Captiva's stockholders. The special committee also unanimously determined
that the conversion price set forth in the amended notes is fair to Captiva's
stockholders who are not holders of the notes. The special committee unanimously
recommended to the board of directors that the note amendment agreement and note
conversion agreement be approved and adopted.

In recommending the approval and adoption of the note amendment agreement and
note conversion agreement to Captiva's board of directors, the special committee
considered a number of factors (many of which are set forth below) that it
believed supported its recommendation. In considering these factors and whether
to recommend the note amendment agreement and note conversion agreement to
Captiva's board of directors, the special committee determined that the terms of
the note amendment agreement and note conversion agreement would be fair to
Captiva's stockholders who are not holders of the notes. The factors that the
special committee considered which support its determination to recommend
approval of the note amendment agreement and note conversion agreement
include:

- without the proposed transaction, Captiva would have been required to pay
all unpaid principal plus accrued interest on each of the notes by March 31,
2002 and there was a reasonable likelihood that Captiva would not be able to
obtain sufficient funds to pay the notes when they become due;
- the current unfavorable economic environment and general recessionary
economy, and the resulting low likelihood of restructuring the notes on terms
reasonably favorable to the stockholders of Captiva;
- the oral and subsequent written opinion provided to the special committee by
Houlihan Lokey to the effect that the conversion price set forth in the amended
notes is fair from a financial point of view to the stockholders of Captiva who
are not holders of the notes;
- in the event of a sale, liquidation or dissolution of Captiva, considering
the bank debt, the promissory notes and the liquidation preference of the
preferred stockholders, the common stockholders would receive little or no
value; and
- the merger agreement requires that 75% of the aggregate principal amount of
the amended notes be converted into shares of Captiva common stock prior to the
merger and that ActionPoint may refuse to
consummate the merger unless
sufficient principal amounts of the amended notes are converted, in which case
Captiva could be required to pay a substantial termination fee under the merger
agreement.

The above discussion of information and factors considered by Captiva's
special committee is not intended to be exhaustive but is believed to include
all material factors considered by the special committee.  In view of the wide
variety of factors considered by Captiva's special committee, the special
committee did not find it practicable to quantify or otherwise assign relative
weight to the specific factors considered.  In addition, Captiva's special
committee did not reach any specific conclusion on each factor considered, or
any aspect of any particular factor, but conducted an overall analysis of these
factors.  Individual members of the Captiva special committee may have given
different weight to different factors.  However, after taking into account all
of the factors described above, Captiva's special committee determined that the
note conversion transaction is fair to, and in the best interest of, Captiva's
stockholders who are not holders of the notes.

Fairness Opinion of Houlihan Lokey Howard and Zukin

The special committee retained Houlihan Lokey to provide an opinion as to
the fairness of the conversion of the amended notes into Captiva common stock,
from a financial point of view, to the stockholders of Captiva who are not
holders of the notes.  On January 30, 2002, Houlihan Lokey delivered its oral
opinion to the special committee, which was presented in writing on March 4,
2002 and is collectively referred to as  the conversion opinion.  The conversion
opinion stated that as of January 30, 2002, based upon and in reliance on the
assumptions set forth in the conversion opinion, the conversion of the amended
notes into Captiva common stock was fair from a financial point of view to
Captiva's stockholders who are not holders of the notes.

The conversion opinion addresses only the fairness from a financial point of
view of the note conversion to Captiva's stockholders who are not holders of the
notes.  The conversion opinion does not address the fairness of the merger or
the merger consideration, or any other aspect of the merger.  Houlihan Lokey's
analysis may have been materially different if it had been asked to provide an
opinion with respect to the merger.  The conversion opinion does not constitute
a recommendation to any stockholder of Captiva as to how to vote with respect to
the merger.  Since the conversion opinion does not address the fairness of the
merger or merger consideration, Captiva's stockholders are advised not to rely
upon any aspect of the conversion opinion or the underlying analysis when
deciding how to vote with respect to the proposed merger.

The conversion opinion explains the assumptions made, the general procedures
followed, the scope of the review and the factors considered by Houlihan Lokey.
It also describes the limitations of Houlihan Lokey's review.  You are
encouraged to read Houlihan Lokey's entire conversion opinion, which is attached
to this joint proxy statement/prospectus as Annex C.

The engagement of Houlihan Lokey and the conversion opinion are for the
benefit of the special committee and the Captiva board of directors only.
Houlihan Lokey was not asked to update and it did not update its analysis from
the date it provided the oral conversion opinion on January 30, 2002.  Houlihan
Lokey was not requested to consider and it did not express an opinion as to the
relative merits of the conversion in comparison to any alternative business
strategies that might exist for Captiva or Captiva's stockholders or the effect
of any other transaction in which Captiva or Captiva's stockholders might
engage.

Houlihan Lokey relied upon the following information provided by Captiva for
its opinion:

- the aggregate principal amount of Captiva's notes was approximately $8.088
million on January 30, 2002;
- immediately prior to the consummation of the merger, Captiva's preferred
stock and amended notes will be converted into Captiva common stock at a
discount to face value;
- the amended notes, if fully converted, would convert into approximately 80%
of Captiva's outstanding common stock immediately prior to the merger, assuming
the conversion of Captiva's preferred stock

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into common stock and the exercise
of all warrants and options to purchase Captiva common stock other than the
options granted pursuant to the Captiva 2002 equity incentive plan;

- as a consequence of the note conversion, the holders of Captiva's common
stock and preferred stock  immediately prior to the note conversion will own
approximately 20% of Captiva's outstanding common stock immediately after the
note conversion but prior to the merger, assuming the conversion of Captiva's
preferred stock to common stock and the exercise of all warrants and options to
purchase Captiva common stock other than the options granted pursuant to the
Captiva 2002 equity incentive plan;
- the amended notes will convert at a fixed rate, so that if less than all of
the aggregate principal amount and unpaid accrued interest under the amended
notes is converted, there would be a pro rata reduction in ownership of
Captiva's equity by the holders of the amended notes after the conversion; and
- in the absence of the merger, Captiva may be required to raise additional
capital to fund its operations, or to liquidate.

Houlihan Lokey's conversion opinion did not address:

- Captiva's reasons for entering into the note conversion agreements or the
merger;
- the fairness of the conversion of Captiva's preferred stock into Captiva's
common stock; or
- any aspect of the merger, including the fairness of the merger or the merger
consideration to be received by Captiva or its stockholders or noteholders.

Houlihan Lokey was not requested to, and it did not, seek from any third
party interest in acquiring all or part of Captiva.  Houlihan Lokey's conversion
opinion addressed the fairness of the conversion to all of Captiva's
stockholders as a group, and did not address the fairness of the conversion to
the holders of common stock as a separate group, or the fairness of the
conversion to the holders of preferred stock as a separate group. Furthermore,
at Captiva's request, Houlihan Lokey did not negotiate the terms of the note
conversion or the merger or advise Captiva with respect to such terms or any
alternatives to the note conversion or the merger.  Although Houlihan Lokey did
not provide an opinion as to any aspect of the merger, Houlihan Lokey assumed
that the merger would be consummated immediately after the notes were converted
in a manner substantially similar to that described to Houlihan Lokey as of
January 30, 2002.  According to this description, the holders of the amended
notes would have a non-controlling (minority) stockholder interest in
ActionPoint immediately after the notes are converted.

Houlihan Lokey did not independently verify the accuracy and completeness of
the information supplied to it with respect to Captiva or ActionPoint and does
not assume any responsibility with respect to such information.  Houlihan Lokey
did not make any physical inspection or independent appraisal of any of the
properties, assets or liabilities of Captiva or ActionPoint, and Houlihan Lokey
was not furnished with any such appraisals.  Houlihan Lokey assumed the validity
and enforceability of all documents (including, in the absence of executed
documents, draft documents) provided to it, including all of the documents
related to Captiva's notes.  Houlihan Lokey's conversion opinion was necessarily
based on business, economic, market and other conditions as they existed and
could be evaluated by Houlihan Lokey as of January 30, 2002.  Furthermore, as of
January 30, 2002, only draft transaction documents were available for Houlihan
Lokey's review.  Any subsequent changes to the documents could have materially
changed Houlihan Lokey's conversion opinion. Houlihan Lokey assumed no
responsibility for updating or revising the conversion opinion based on
circumstances or events occurring after January 30, 2002.

For purposes of formulating the conversion opinion, Houlihan Lokey:

- reviewed certain historical financial statements of Captiva;
- reviewed copies of various presentations, agreements and drafts of
transaction documents;
- met with certain members of the senior management of Captiva to discuss the
operations, financial condition, future prospects and projected operations and
performance of Captiva;
- met with certain members of the senior management of ActionPoint to discuss
the operations, financial condition, future prospects and projected operations
and performance of ActionPoint;

- reviewed forecasts and projections prepared by Captiva's management with
respect to Captiva for the years ended December 31, 2001 through 2004;
- reviewed certain other publicly available financial data for certain
companies that Houlihan Lokey deemed comparable to Captiva; and
- conducted such other studies, analyses and inquiries as it deemed
appropriate.

Houlihan Lokey relied upon the accuracy and completeness of all financial,
accounting, legal, tax, operating and other information provided to it by
Captiva.  Houlihan Lokey assumed:

- that all such information was complete and accurate in all material
respects;
- that there were no material changes in the information reviewed between the
date the information was provided and January 30, 2002;
- that there were no material changes in the assets, financial condition,
business or prospects of Captiva; and
- that there was no information regarding Captiva that would cause the
information supplied to Houlihan Lokey as of January 30, 2002 to be incomplete
or misleading in any material respect.

Houlihan Lokey did not independently verify the accuracy or completeness of
the information supplied to it with respect to Captiva and does not assume
responsibility for the accuracy or completeness of such information.

Houlihan Lokey assumed that all of the projections and pro forma financial
statements and adjustments it was provided by Captiva were reasonably prepared
on a basis consistent with actual historical experience, reflected the best
currently available estimates as of January 30, 2002 and good faith judgments of
the management of Captiva and could reasonably be relied upon.

Houlihan Lokey did not make an independent evaluation, appraisal or valuation
of any assets or liabilities of Captiva, and Houlihan Lokey was not furnished
with any such evaluations, appraisals or valuations. In its analyses, Houlihan
Lokey made numerous assumptions with respect to industry performance, general
business and other conditions and matters, many of which are beyond Captiva's
control and unsusceptible to accurate prediction.  While Houlihan Lokey believes
that its review provided an adequate basis for its conversion opinion, the
conversion opinion is based upon market, economic and other conditions that
existed and could be evaluated as of January 30, 2002, and any change in such
conditions could require a reevaluation of the conversion opinion.

The conversion opinion addressed only the financial fairness, as of January
30, 2002, of the note conversion.  The conversion opinion did not address:
(i) any other terms or conditions of the merger agreement or any related
documents; (ii) the tax or legal consequences of the merger, including the
tax or legal consequences to the stockholders; (iii) the fairness of any
aspect of the merger; (iv) the relative merits of the conversion or any
alternatives to the conversion; or (v) Captiva's decision to enter into the
note conversion agreement or any other aspect of the conversion. No restrictions
or limitations were imposed by Captiva upon Houlihan Lokey with respect to the
investigation made or the procedures followed in rendering its conversion
opinion.

The special committee retained Houlihan Lokey in light of Houlihan Lokey's
experience in the valuation of businesses and their securities in connection
with mergers, acquisitions, recapitalizations and similar transactions. Houlihan
Lokey is a nationally recognized investment banking firm that is continually
engaged in providing financial advisory services in connection with mergers and
acquisitions, leveraged buyouts, business valuations for a variety of regulatory
and planning purposes, recapitalizations, financial restructurings, and private
placements of debt and equity securities.

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Houlihan Lokey has no prior relationship with Captiva. Captiva has agreed to
pay Houlihan Lokey a fee of $150,000 for providing its conversion opinion and
other advisory services, of which $75,000 has been paid to date.  No portion of
the fee was contingent upon Houlihan Lokey approving the fairness of the terms
of the note conversion.  Captiva also agreed to indemnify Houlihan Lokey and
related persons against certain liabilities,
including liabilities under federal
securities laws arising out of the engagement of Houlihan Lokey.  Moreover,
Captiva agreed to reimburse Houlihan Lokey for certain expenses associated with
rendering the conversion opinion.

In assessing the fairness of the conversion, Houlihan Lokey undertook several
valuation analyses of Captiva using the market multiple approach, discounted
cash flow approach and transaction approach.  In each case the value attributed
to the interests of Captiva's stockholders except for those stockholders which
are also holders of Captiva's notes was based on the value of a minority
interest in the surviving company.  This approach was taken because the note
conversion will only be effective if the merger is consummated whereby the
stockholders of Captiva will own less than 50% of the equity ActionPoint, which
is a minority interest.

Market Multiple Approach.  The market multiple approach is a widely-
used valuation methodology in which the value of a company is determined based
upon the trading multiples of comparable publicly-traded companies. This
approach can involve the determination of a level of revenues or gross profits,
which are considered to be representative of the future performance of the
company, and capitalizing these figures by a risk-adjusted multiple.

Houlihan Lokey reviewed certain financial information for public companies
that it deemed to be comparable to Captiva by Houlihan Lokey.  The public
comparables included the following companies:  Brio Software, Inc., Business
Objects, Documentum, Inc., FileNET Corp, Hummingbird, Inc., iManage, Inc., Open
Text Corp, OTG Software, Inc., ScanSoft, Inc., and ActionPoint, Inc.

For each of the comparable companies, Houlihan Lokey calculated, reviewed and
analyzed numerous financial and operating performance ratios, as well as market
capitalization ratios, such as the enterprise value to the latest twelve months
and next fiscal year revenues.

There are inherent differences between the businesses, operations, and
prospects of Captiva and the comparable companies used in the market multiple
analysis. Accordingly, Houlihan Lokey believed that it was inappropriate to, and
therefore did not, rely solely on the above-described quantitative results of
the market multiple analysis and accordingly also made qualitative judgments
concerning differences between the financial and operating characteristics and
prospects of Captiva and the comparable companies that would, in Houlihan
Lokey's conversion opinion, affect the public market valuation of such
companies.

The Discounted Cash Flow Approach.  The discounted cash flow approach
method, or DCF method, is a frequently used form of the income approach to
determine the fair market value of a closely held company. The method is one of
estimating the present value of the projected future cash flows to be generated
from the business and theoretically available (though not necessarily paid) to
the capital providers of the company.

In the DCF method, the counterpart to the market multiple described above is
the discount rate applied to the projected future cash flows to arrive at the
present value. The discount rate is intended to reflect all risks of ownership
and the associated risks of realizing the stream of projected future cash flows.
It can also be interpreted as the rate of return that would be required by
providers of capital to the company to compensate them for the time value of
their money, as well as the risk inherent in the particular investment.

Unlike the market multiple, the discount rate employed in the DCF method
contains no implicit expectations of growth for the cash flows. Instead, the
projected cash flows themselves reveal growth expectations, while allowing for a
great deal more flexibility in projecting such growth rates.

In determining the appropriate discount rate associated with the projected
cash flows for Captiva, Houlihan Lokey reviewed certain financial information
for public companies that it deemed to be comparable to Captiva by Houlihan
Lokey. The public comparables included the following companies:  Brio Software,
Inc., Business Objects, Documentum, Inc., FileNET Corporation, Hummingbird,
Inc., iManage, Inc., Open Text Corp, OTG Software, Inc., ScanSoft, Inc. and
ActionPoint, Inc.

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For each of the comparable companies, Houlihan Lokey calculated, reviewed and
analyzed numerous financial and operating performance ratios, as well as the
weighted average cost of capital.

The Transaction Approach.  The transaction approach utilizes observed
multiples in comparable transactions to determine the value of a company.
Because ActionPoint is a publicly traded company, Houlihan Lokey
considered the
valuation ascribed to Captiva based on the proposed merger between the two
companies.   Houlihan Lokey analyzed historical stock prices of ActionPoint in
relation to the proposed merger consideration of Captiva with Captiva
stockholders receiving, in the aggregate, one share of common stock less than
the total number of shares of common stock of ActionPoint outstanding
immediately before the merger in exchange for their equity interests in
Captiva.

The preparation of a fairness opinion is a complex analytical process
involving various determinations as to the most appropriate and relevant methods
of financial analysis and application of those methods to the particular
circumstances and is therefore not readily susceptible to summary description.
In preparing its conversion opinion, Houlihan Lokey did not attribute any
particular weight to any analysis or factor considered by it, but rather made
the qualitative judgments as to the significance and relevance of each analysis
and factor. Accordingly, Houlihan Lokey believes that its analyses and the
summary set forth herein must be considered as a whole and that selecting
portions of its analyses, or portions of this summary, without considering the
entire analyses or all of the factors, could create an incomplete view of the
processes underlying the analyses undertaken by Houlihan Lokey in connection
with the conversion opinion.

The estimates contained in Houlihan Lokey's analyses are not necessarily
indicative of actual values or predictive of future results or values, which may
be more or less favorable than suggested by such analyses. The analyses do not
purport to be appraisals or to reflect the prices at which Captiva might
actually be sold.

Principal Terms of the Note Amendment Agreement

In order to amend Captiva's promissory notes, the approval of the holders
of at least 50% of the aggregate principal amount of the senior notes and the
holders of at least 50% of the aggregate principal amount of the convertible
notes will be required.  Since the aggregate outstanding principal amount of the
senior notes was approximately $4,087,877 as of March 31, 2002, the approval of
the holders of at least approximately $2,043,939 in aggregate principal amount
will be required to approve the amendment. Further, since the total outstanding
principal amount of the convertible notes was $4,000,000, the approval of the
holders of at least $2,000,001 in aggregate principal amount will be required to
approve the amendment.  If holders of a sufficient principal amount of Captiva's
senior notes and convertible notes approve the amendment, every senior note and
convertible note of Captiva will be amended and restated in its entirety as an
amended note of the same principal value as before the amendment effective
immediately prior to the merger.  The terms of the amended notes are discussed
in more detail below. The merger agreement requires that all the notes be
amended in order to consummate the merger.

The Amended Senior Notes

While the terms of the amended senior notes are generally the same as
those of the senior notes, the interest rate, maturity and conversion privilege
are materially different. Captiva is currently required to pay interest on the
senior notes semi-annually at an annual rate of 6% simple interest.  Interest on
the amended senior notes will be paid quarterly and accrue at an annual rate
which is the lesser of the maximum rate permissible by law or 6% simple
interest. Therefore, if the maximum rate permissible by law falls below 6%, the
interest rate on the amended senior notes will be adjusted downward
accordingly.

Furthermore, while the senior notes cannot be converted into shares of
Captiva capital stock, the amended senior notes will be convertible into shares
of Captiva common stock at any time prior to the consummation of the merger at a
conversion price of approximately $0.03751 per share.  The amended senior notes
will not be convertible after the closing of the merger.  Based on this
conversion price, if all of the amended senior notes are converted, they will
convert into approximately 40% of the equity of Captiva after such conversion
excluding the options granted under the Captiva 2002 equity incentive plan. Any
holder of an amended senior note will be able to convert his, her or its
promissory note by entering into a note conversion agreement with Captiva.  The
principal and accrued but unpaid interest on the senior notes became due on
March 29, 2002. Should the note amendment agreement become effective, all the
unpaid principal plus the accrued but unpaid interest on the amended senior

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Captiva's obligations to repay principal and pay interest on the amended
senior notes will remain subordinate to many of Captiva's other financial
obligations which arise from time to time. These other financial obligations
include any current and future indebtedness of Captiva to banks, insurance
companies and other financial institutions from which Captiva has borrowed
money.  Moreover, the amended senior notes will be subordinate to the amended
convertible notes. As a result, Captiva may be prevented from making any
principal or interest payments on the amended senior notes if that payment would
cause Captiva to breach any of its agreements or interfere with Captiva's
ability to meet its senior financial obligations.  After the closing of the
merger, the amended notes will no longer be convertible.  See "Second
Amended and Restated Subordinated Convertible Promissory Note" as Exhibit
B-1 to the Note Amendment Agreement included as Annex I to this joint
proxy statement/prospectus for the full text of the amended senior notes.

The Amended Convertible Notes

The amended convertible notes will have terms nearly identical to those
of the amended senior notes. Both sets of amended notes will pay interest at the
same rate and both may be converted into shares of Captiva common stock on the
same terms at any time prior to the consummation of the merger. However, while
the amended convertible notes and the amended senior notes will be subordinate
to some of Captiva's other financial obligations, Captiva's payment obligations
under the amended convertible notes will take priority over Captiva's
obligations under the amended senior notes. In general this means that subject
to the restrictions described above, Captiva will be allowed to make payments on
principal and interest accrued on the amended convertible notes before making
these payments on the amended senior notes.

Some of the terms of the amended convertible notes will also differ from
those of the convertible notes. For example, Captiva will pay interest on the
amended convertible notes quarterly at the same rate as amended senior notes.
Interest under the amended convertible notes may therefore accrue at a rate
lower than the 6% simple interest provided in the convertible notes. Also, while
the convertible notes can be converted into Captiva Series E preferred stock at
any time at a conversion price of $0.3029 per share, the amended convertible
notes can only be converted into shares of Captiva common stock prior to the
consummation of the merger at the conversion price of approximately $0.03751 per
share.  After the closing of the merger, the amended notes will no longer be
convertible. Based on this conversion price, if all of the amended convertible
notes are converted, they will convert into approximately 40% of the equity of
Captiva after such conversion excluding the options granted under the Captiva
2002 equity incentive plan.

The principal and accrued but unpaid interest on the convertible notes became
due on March 31, 2002, but will be deferred during the pendency of the merger.
Should the note amendment agreement become effective, all the unpaid principal
plus the accrued but unpaid interest on the amended convertible notes which have
not been converted into shares of Captiva common stock will be due no later than
March 31, 2007.  Under certain circumstances, Captiva may have the right to
prepay a portion or all of any amended convertible note before March 31,
2007.  See "Amended and Restated Subordinated Convertible Promissory
Note" as Exhibit B-2 to the Note Amendment Agreement included as Annex
I to this joint proxy statement/prospectus for the full text of the amended
convertible notes.

Principal Terms of the Note Conversion Agreement

If holders of a sufficient principal amount of Captiva's senior notes and
convertible notes approve the amendment and the merger is consummated, the note
amendment agreement will become effective.  When the note amendment agreement
becomes effective, each and every holder of Captiva's amended notes will be
entitled to convert the outstanding amount of principal and interest due under
his, her or its amended note into shares of Captiva common stock. The amended
notes will be convertible into shares of Captiva's common stock at the
conversion price described above.  In order to convert a note into Captiva
common stock, the noteholder must enter into the note conversion agreement with
Captiva.

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The note conversion agreement allows every holder of Captiva's amended notes
the option to convert the entire amount of principal and interest due under such
amended notes into Captiva common stock. The note conversion agreement does not
permit noteholders to convert any fraction of the principal and interest under
their amended notes into shares of Captiva common stock. By entering into the
note conversion agreement, each noteholder agrees to waive any right to bring a
claim against Captiva related to that noteholder's purchase of the
note from
Captiva. This does not include waiving claims alleging fraud committed by
Captiva or claims made as a stockholder of Captiva.

The merger agreement requires that the holders of at least 75% of the
aggregate principal amount of the amended notes must elect to convert their
notes into shares of Captiva common stock by signing note conversion agreements.
As of March 31, 2002, the aggregate principal amount of Captiva's outstanding
promissory notes was approximately $8,087,877.  Therefore, the holders of at
least an aggregate principal amount of approximately $6,065,907 were required to
enter into note conversion agreements.  As of March 31, 2002, holders of an
aggregate principal amount of $3,941,301, or 48.7% of Captiva's amended
outstanding promissory notes, had entered into note conversion agreements.

Based in part on the recommendation of the special committee, Captiva's board
of directors has determined that the conversion of the notes into shares of
Captiva's common stock is fair to and in the best interest of Captiva's
stockholders who are not holders of the notes.

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ADOPTION OF CAPTIVA'S NEW OPTION PLAN, AMENDMENT OF CAPTIVA'S
AMENDED AND RESTATED STOCK OPTION/STOCK ISSUANCE PLAN AND REPRICING OF CAPTIVA
OPTIONS

Subject to the approval of its stockholders, Captiva intends to adopt its
2002 equity incentive plan, grant new options to purchase Captiva common stock,
and reprice certain previously existing options in connection with the merger.
Captiva's board determined that the issuance of new options under its 2002
equity incentive plan is necessary to retain qualified employees and provide an
incentive to such employees to exert maximum efforts towards Captiva's
success.

Assumption of Options by ActionPoint

As a result of the merger, all options to purchase shares of Captiva
common stock, whether vested or unvested, will be assumed by ActionPoint.  The
number of shares subject to the stock options assumed by ActionPoint in the
merger will be adjusted according to the exchange ratio used to convert Captiva
stock into ActionPoint stock in the merger agreement, such that each share of
Captiva common stock equals approximately 0.0156 shares of ActionPoint common
stock.  As of May 31, 2002, there were options to purchase 128,651,825 shares
of Captiva common stock issued and outstanding.  Captiva
expects to issue additional options to purchase the remaining 20,921,738 shares of
the aggregate 140,843,144 shares of Captiva common stock granted under its 2002
equity incentive plan described below.  In addition,
certain optionholders have entered into agreements to exercise options to
purchase an aggregate of 6,083,414 shares of Captiva common stock prior to the
merger.  Assuming the foregoing grants and exercises are made, options to
purchase an aggregate 143,490,149 shares of Captiva stock will be converted into
options to acquire approximately 2,240,000 shares of ActionPoint common stock in
connection with the merger.  For a further description of the treatment of
Captiva's stock options, see "The Merger Agreement-Treatment of Captiva
Stock Options" on page 71.

Immediately prior to the merger, Captiva's directors and executive officers
will have options to acquire 79,106,834 shares of Captiva common stock.
Assuming an exchange ratio of approximately 0.0156, these options will be
converted into options to acquire 1,235,000 shares of ActionPoint common stock.
For more information on the stock options held by Captiva's directors and
officers, see "Interests of Executive Officers and Directors of ActionPoint
and Captiva in the Merger-Interests of Captiva's Executive Officers and
Directors" on page 58.

The 2002 Equity Incentive Plan and the Amendment to the Amended and
Restated Stock Option/Stock Issuance Plan

Captiva has two stock option plans, the 2002 equity incentive plan and
the amended and restated stock option/stock issuance plan, or stock plan.

2002 Equity Incentive Plan.  Captiva's board of directors adopted the
2002 equity incentive plan, subject to stockholder approval, in January 2002.
Under the 2002 equity incentive plan, Captiva can issue various stock awards to
all of its employees, directors and consultants, as well as Captiva's
affiliates.  These awards can include incentive stock options, nonstatutory
stock options, stock bonuses and rights to acquire restricted stock.  Although
all of Captiva's employees and affiliates will be eligible to receive stock
awards under the 2002 equity incentive plan, only Captiva's employees are
eligible to receive incentive stock options.  Captiva's board of directors
administers the 2002 equity incentive plan.

The 2002 equity incentive plan permits Captiva to issue options to purchase
up to 150,000,000 shares of Captiva common stock.  In general, the 2002 equity
incentive plan requires that the exercise price for each incentive stock option
granted under the plan be at least 100% of the value of the common stock subject
to the option on the date of grant.  As of May 31, 2002, there were options to
acquire 140,843,144 shares of Captiva common stock granted under the 2002
equity incentive plan.  The per share exercise price for options granted under
the 2002 equity incentive plan is based on the fair market value on the date of
grant as determined by the board of directors.  Options to acquire 35,229,764 shares of
Captiva common stock have a per share exercise price of $0.008, which was a
special grant at less than fair market value. These options will vest 100% upon the consummation
of the merger.  Options to acquire 105,613,380 shares of Captiva common stock have a
per share exercise price of
or $0.0379, which was the fair
market value of the underlying shares of Captiva common stock on the date of
grant as determined by the board of directors after taking into consideration
the closing price of ActionPoint's common stock as of the date

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In addition, the options to be issued under the 2002 equity incentive plan
will have varying vesting schedules.  Fifty percent of the options granted to
certain key employees will vest on the date of grant and the remaining 50% will
vest monthly over the next two years.  For options issued under the plan to
employees, other than certain key employees, who have been employed with Captiva
for one year or more as of the date of closing, 15% of the options will vest on
the date of grant, 35% will vest one year after the grant date, and the
remaining 50% of the options will vest monthly over the three years following
the first year anniversary of the date of grant.  Finally, with respect to the
remaining options granted under the equity incentive plan, 25% will vest one
year from the date of grant and the remaining options will vest monthly over the
next three years.  However, if the merger is not consummated, each of the new
options issued under the 2002 equity incentive plan will terminate.  The full
text of the 2002 equity incentive plan is included in Annex M, and you
are urged to read it carefully in its entirety.

Amendment to the Amended and Restated Stock Option/Stock Issuance
Plan.  In connection with the merger, Captiva's board of directors has
determined that it is in the best interests of Captiva and its stockholders to
amend the stock plan.  The stock plan requires that the exercise price for any
option issued under the plan be at least 85% of the value of the shares subject
to the option on the date of grant.  The amendment to the stock plan will permit
Captiva to issue options under the stock plan with an exercise price less than
85% of the value of the shares subject to the options on the date of grant and
to reduce the exercise price of already outstanding options in connection with
the option repricing described below.  The full text of the amendment is
included in Annex M, and you are urged to read it carefully in its
entirety.

Repricing of Existing Options

Contingent upon the consummation of the merger, the exercise price of all
outstanding options issued pursuant to Captiva's stock plan will be subject to
amendment.  Captiva's board of directors has determined that since the exercise
prices of certain of Captiva's options have risen above the value of the stock
subject to the options, it is in the best interests of Captiva and its
stockholders to restore the incentive of Captiva's optionholders to procure
their maximum efforts for Captiva's success.  Captiva intends to restore such
incentive by accelerating the vesting and reducing the exercise price of certain
options held by the holders of Captiva's options.  Unless the merger is
consummated, none of Captiva's options will be accelerated or repriced.

As of May 31, 2002, Captiva had options to purchase 8,730,419 shares of
common stock outstanding under its stock plan.  The
exercise prices on these outstanding options range from $0.02 to $0.85 per share
and the weighted average exercise price of such options was $0.19 per share.
In January 2002, Captiva committed to reprice these options contingent upon the
consummation of the merger. The exercise prices after the repricing
will be $0.008 per share for options to purchase 6,083,414 shares of Captiva common stock
and $0.024 per share for options to purchase 2,647,005 shares of Captiva common stock.
Based on these exercise prices, the
weighted average exercise price for Captiva's repriced options will be $0.0129
per share.

If the merger is consummated, ActionPoint will assume all of Captiva's
outstanding options, including the repriced options.  Assuming that all of
Captiva's outstanding options issued under the stock plan are repriced and the
merger is consummated, the repriced options assumed by ActionPoint will have an
exercise price of $1.56 per share of ActionPoint common stock.  For more
information on the repricing of stock options held by Captiva's directors and
officers, see "Interests of Executive Officers and Directors of ActionPoint
and Captiva in the Merger-Interests of Captiva's Executive Officers and
Directors" on page 58.

100

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Accounting Charges Related to Assumption of Captiva Options

To the extent that any unvested options assumed by ActionPoint at the
time of the merger have an exercise price that is less than the ActionPoint
market price at the time of the merger, a deferred compensation charge will be
recorded, which will be amortized through operating income over the remaining
vesting period of the applicable options.  The applicability of a deferred
compensation charge will be made based upon the price of ActionPoint stock at
the time of the merger.  Based upon the  ActionPoint price at May 31, 2001
there would be no deferred compensation charge required.

AMENDMENT TO CAPTIVA'S ARTICLES OF INCORPORATION

In connection with the merger, Captiva's stockholders will vote on the
amendment and restatement of Captiva's articles of incorporation as follows:

- to increase the number of shares of common stock authorized under the
articles from 108,488,564 shares to 440,000,000 shares to allow for the exercise
of Captiva's outstanding options and the conversion of Captiva's outstanding
notes immediately prior to the merger; and
- to waive the anti-dilution rights of Captiva's preferred stockholders in
connection with the issuance of shares of Captiva common stock upon the
amendment and conversion of Captiva's promissory notes.

In order to adopt the amendment, it must be approved by more than 50% of the
holders of Captiva's common stock voting as a separate class and more than 50%
of the holders of each of the series of Captiva's preferred stock voting
separately as a series.  The full text of Captiva's articles of incorporation,
as proposed to be amended and restated, is attached to this joint proxy
statement/prospectus as Annex K.

Recommendation of the Captiva Board of Directors

The Captiva board of directors unanimously recommends the Captiva
stockholders to vote FOR the approval of the amendment and restatement of
Captiva's articles of incorporation.  The approval of the amendment and
restatement of Captiva's articles of incorporation is contingent upon the
approval of the merger, and the approval of the merger is contingent upon the
approval of the amendment and restatement of Captiva's articles of
incorporation.

101

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AMENDMENT TO ACTIONPOINT'S CERTIFICATE OF
INCORPORATION

One of the conditions of the merger with Captiva is that ActionPoint
change its name to Captiva Software Corporation at the effective time of the
merger.  The board of directors of ActionPoint believes that the name Captiva
Software Corporation will more accurately reflect the business and direction of
the combined companies, to provide a complete information capture software
solution.  Accordingly, a resolution will be presented at the stockholders
meeting to approve a proposed amendment to ActionPoint's certificate of
incorporation changing the name of ActionPoint if the merger is completed.  The
certificate of amendment to ActionPoint's certificate of incorporation is
attached to this joint proxy statement/prospectus as Annex L.

If this proposal is not approved by the ActionPoint stockholders but the
merger is completed, ActionPoint will nonetheless be required to change its name
to Captiva Software Corporation by completing a merger that will not require the
approval of the ActionPoint stockholders and will not change any provisions of
ActionPoint's certificate of incorporation other than the ActionPoint name.

The amendment of ActionPoint's certificate of incorporation is subject to the
completion of the merger and will not be made if the merger is not
completed.

Recommendation of the ActionPoint Board of Directors

The ActionPoint board of directors recommends that ActionPoint
stockholders vote FOR the approval of the amendment to ActionPoint's
certificate of incorporation to change ActionPoint's name to Captiva Software
Corporation, if the merger is completed.

102

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INFORMATION CONCERNING ACTIONPOINT

ActionPoint's Business

ActionPoint develops, markets and services information capture software.
Information capture software enables organizations to collect, organize and
input paper and fax-based information into their installed computing systems,
providing a critical bridge between the paper world and the digital world.  The
result is improved customer satisfaction, increased productivity and cost
control.  ActionPoint's customers have traditionally been large global 1000
businesses and governmental agencies.  ActionPoint's InputAccel family of
information capture software helps automate the conversion of paper and fax
documents into electronic format thus allowing improved operating efficiencies.
ActionPoint's customers use InputAccel to convert transaction-related documents,
such as order forms, claim forms, or loan applications, into an appropriate
electronic format and to transport images of and information from these
documents to storage on Web sites, compact disks, or internal databases for
subsequent search, retrieval or further processing.  Additionally, ActionPoint
markets software tools under its Pixel Translations brand to various hardware
and software providers.

Additional information concerning ActionPoint's business is incorporated
herein by reference to ActionPoint's annual report for the year
ended December 31, 2001 and ActionPoint's quarterly report on Form 10-Q
for the period ended March 31, 2002, both of which are being furnished with this
joint proxy statement/prospectus and ActionPoint's current report on Form 8-K filed
with the Securities and Exchange Commission on March 20, 2002.

Board Meetings and Committees

During the fiscal year ended December 31, 2001, the board of directors of
ActionPoint held a total of fifteen meetings. During this period, all directors
attended or participated in at least 75% of the aggregate of (i) the total
number of meetings of the board and (ii) the total number of meetings held
by all committees of the board of which they were members.

ActionPoint has an audit committee and a compensation committee of the board
of directors.  There is no nominating committee.

The audit committee meets with ActionPoint's financial management and its
independent accountants at various times during each year and reviews internal
control conditions, audit plans and results, and financial reporting procedures.
This committee, consisting of Mr. Edsell, Mr. Tompkins and Mr. Silver, held four
meetings during fiscal year 2001.

The compensation committee reviews and approves ActionPoint's compensation
arrangements for management.  This committee, consisting of Mr. Edsell and
Mr. Tompkins, held two meetings during fiscal year 2001.

The board has authority to create special committees from time to time as
circumstances require-such as the special committee created in January 2002 for
the purpose of reviewing strategic alternatives prior to entering into the
merger agreement with Captiva.  Mr. Edsell and Mr. Silver served on this special
committee.  For more information regarding the board's approval of the merger
agreement with Captiva, see "The Merger-Background of the Merger" on
page 41.

Director Remuneration

Non-employee members of the board are each paid a fee of $3,000 per
calendar quarter and $1,000 for each scheduled board meeting attended in person
and are reimbursed for all out-of-pocket costs incurred in connection with their
attendance at board and committee meetings.

Each member of ActionPoint's special committee formed to review ActionPoint's
strategic alternatives, including the merger with Captiva, was paid an initial
retention fee of $10,000 when he was appointed to the special committee and
$1,000 for each meeting of the special committee he attended in person and $500
for each meeting of the special committee he attended telephonically.

103

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Under the automatic option grant program in effect under ActionPoint's 1993
stock option/stock issuance plan, an individual who first becomes a non-employee
member of the board will receive an automatic option grant
for 10,000 shares of
ActionPoint common stock upon commencement of board service, and each individual
with six or more months of board service will receive an automatic option grant
for an additional 2,500 shares at each annual stockholders meeting at which he
or she continues to serve as a non-employee board member.  The initial grants
vest over four years in equal annual installments, while the annual grants vest
after four years of service following the date of grant.

No other compensation is paid to the non-employee members of the board with
respect to their service on the board.

Executive Compensation and Related Information for ActionPoint's Executive
Officers

The following table sets forth the compensation earned by ActionPoint's
current and former chief executive officers, each of ActionPoint's four other
most highly compensated executive officers (as determined as of the end of
fiscal year 2001) and two ActionPoint executive officers who would have been
among the five highest paid executive officers of ActionPoint but left their
positions prior to the end of last fiscal year, who are all hereinafter referred
to as ActionPoint's named executive officers, for services rendered in all
capacities to ActionPoint and its subsidiaries for the three fiscal years ended
December 31, 2001.

SUMMARY COMPENSATION TABLE

`Long Term
                                     Annual Compensation      Compensation
                                -----------------------------      Awards
                                                              -----------    All
                                                                            Other
                                                               Securities Compen-
                                   Fiscal   Salary     Bonus   Underlying  sation
Name and Principal Position        Year     ($)(1)    ($)(2)   Options(#)   ($)(3)
------------------------------  --------  --------- --------- ----------- --------
Kimra Hawley..................     2001    113,475    29,468      40,000    2,000
  Chairman of the Board, former    2000    263,416   706,406           0    2,000
  President and Chief Executive    1999    239,333    89,280     100,000    2,000
  Officer

Stephen Francis...............     2001    212,854    46,000     220,000    2,000
  President, Chief Executive       2000    199,737   416,268           0    2,000
  Officer and Director             1999    172,917    70,000     100,000    2,000

John Finegan..................     2001    200,000    58,544      10,000    2,000
  Chief Financial Officer,         2000    200,000   455,482           0    2,000
  Secretary and Director           1999    100,000    32,025      25,000    2,000

Matthew Albanese..............     2001    181,125    35,000      20,000    2,000
  Vice President, Professional     2000    179,333   211,240      60,000    2,000
  Services                         1999    159,667    53,750      45,000    2,000

Joseph Falk...................     2001    142,308    70,514      35,000  132,000
  Former Vice President, Sales     2000    186,100   267,491      40,000    2,000
                                   1999    148,750    92,975      20,000    2,000

Johannes Schmidt..............     2001    156,100    26,513      15,000    2,000
  Former Chief Technical Officer   2000    219,094   795,558           0    2,000
  and former Director              1999    203,333    64,050     100,000    2,000

David Sharp...................     2001    139,167    27,000      35,000    2,000
  Vice President, Engineering      2000    125,500    49,109           0    2,000
                                   1999    115,000    24,640      16,000    2,000

John Stetak...................     2001    176,400    35,000      10,000    2,000
  Vice President, Marketing        2000    173,950   129,610      28,000    2,000
                                   1999    146,416   121,283      25,000    2,000`

___________________

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1. Includes salary deferred under ActionPoint's 401(k) plan.
2. Substantially all of the bonus payments made in 2000 were made pursuant to
ActionPoint's special incentive bonus plan, a stock price-based incentive plan.
This plan was adopted in October 1999 to create an additional incentive for
ActionPoint's management team to increase stockholder value.  The bonus payments
under the plan were contingent upon the attainment of certain stock price levels
for ActionPoint's common stock over an extended period of time.  The applicable
price level objectives were achieved in February 2000.
3. Consists of a matching contribution to ActionPoint's 401(k) plan and, for
Mr. Falk in 2001, a severance payment.

Stock Options

The following table contains information concerning the grant of stock
options under the 1993 stock option/stock issuance plan, or the 1993 option
plan, for the 2001 fiscal year to ActionPoint's named executive officers.

OPTION GRANTS IN LAST FISCAL YEAR

`Individual Grants
                           -------------------------------------------
                                        % of
                                        Total                              Potential Realizable
                           Number of   Options                              Value at Assumed
                           Securities  Granted   Exercise                  Annual Rates of Stock
                           Underlying    to        Price                 Price Appreciation for
                            Options   Employees     per       Expir-         Option Term
                            Granted   in Fiscal    share       ation    ---------------------
Name                        (#)(1)      Year     ($/sh)(2)     Date     5% ($)(3)   10% ($)(3)
-------------------------  ---------  ---------  ---------   ---------  ---------   ---------
Kimra Hawley.............    40,000        5.4%      5.38    02/05/11    135,338     342,973

Stephen Francis..........    20,000        2.7%      5.38    02/05/11     67,669     171,486
                            200,000       26.6%      2.75    06/04/11    345,891     876,557

John Finegan.............    10,000        1.3%      5.38    02/05/11     33,834      85,743

Matthew Albanese.........    20,000        2.7%      5.38    02/05/11     67,669     171,486

Joseph Falk..............    35,000        4.7%       1.8    08/30/11     39,620     100,406

Johannes Schmidt.........    15,000        2.0%      5.38    02/05/11     50,752     128,615

David Sharp..............     5,000        2.7%      5.75    01/31/11     18,801      45,820
                             30,000       26.6%      2.63    06/22/11     49,620     125,746

John Stetak..............    10,000        1.3%      5.38    02/05/11     33,834      85,743`

___________________

1. The options listed in the table were granted under the 1993
option plan.  The options become exercisable as follows:  25% upon the
completion of the first year of service measured from the vesting date, and an
additional 6.25% upon the completion of each full quarter elapsed thereafter,
until the option is fully vested upon the completion of the fourth year of
service from the vesting commencement date.  The options will vest in full if
ActionPoint is subject to a change in control.  The merger with Captiva will not
constitute a change in control under the 1993 option plan.  The options have a
maximum term of 10 years, subject to earlier termination in the event of the
optionees' cessation of service with ActionPoint.
2. The exercise price of the option may be paid in cash, in shares of common
stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares.
ActionPoint may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise

105


price for the purchased shares and the
federal and state tax liability incurred in connection with such exercise.  The
optionee may be permitted, subject to the approval of the plan administrator, to
apply a portion of the shares purchased under the option (or to deliver existing
shares of common stock) in satisfaction of such tax liability.

1. The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the rules of the Securities and Exchange Commission.  There is
no assurance provided to any executive officer or any other holder of
ActionPoint's securities that the actual stock price appreciation over the 10-
year option term will be at the assumed 5% or 10% levels or at any other defined
level.  Unless the market price of the common stock does in fact appreciate over
the option term, no value will be realized from the option grant.

TEN-YEAR OPTION REPRICINGS

`Exercise                  Length Of
                                      Number of    Market Price  Price At                Original Option
                                      Securities   of Stock At    Time Of                     Term
                                      Underlying     Time of     Repricing      New       Remaining At
                                       Options     Repricing Or     Or       Exercise       Date Of
                                      Repriced or   Amendment    Amendment     Price      Repricing Or
Name                       Date(1)    Amended(#)         ($)         ($)         ($)      Amendment(2)
------------------------  ---------   ----------   -----------   ---------   ---------   --------------
John Finegan............  03/02/02       50,000          2.43        8.63        2.43    4 yrs, 2 mos
                                         12,500          2.43        8.00        2.43    1 yr, 5 mos
                                         30,000          2.43        7.88        2.43    4 yrs, 11 mos
                                         30,000          2.43        7.25        2.43    5 yrs, 8 mos
                                         10,000          2.43        5.38        2.43    8 yrs, 11 mos
                                         36,771          2.43        5.31        2.43    7 yrs, 4 mos

Matthew Albanese........  03/02/02       20,000          2.43        8.63        2.43    4 yrs, 2 mos
                                          8,000          2.43        8.50        2.43    5 yrs
                                          9,500          2.43        8.25        2.43    5 yrs, 2 mos
                                         25,000          2.43        6.38        2.43    6 yrs, 3 mos
                                         15,000          2.43        6.13        2.43    6 yrs, 11 mos
                                         20,000          2.43        5.38        2.43    8 yrs, 11 mos
                                         45,000          2.43        5.31        2.43    7 yrs, 4 mos
                                          5,000          2.43        5.00        2.43    4 yrs, 8 mos
                                         45,000          2.43        4.56        2.43    8 yrs, 5 mos

John Stetak.............  03/02/02       10,000          2.43       18.00        2.43    8 yrs
                                         30,000          2.43        7.25        2.43    5 yrs, 8 mos
                                         45,000          2.43        5.38        2.43    8 yrs, 11 mos`

___________________

1. Options were cancelled on August 31, 2001
and regranted on March 2, 2002 at the then current market price.
2. Length of original option term remained unchanged
following the regrant.

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Option Exercises and Holdings

The following table provides information with respect to ActionPoint's
named executive officers concerning the exercise of options during the 2001
fiscal year and unexercised options held as of the end of the 2001 fiscal
year.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

`Number of Securities
                                                      Underlying Unexercised    Value of Unexercised
                              Shares                    Options at Fiscal      In-the-Money Options at
                             Acquired                    Year-End(#)            Fiscal Year-End($)
                                on         Value     -----------------------  --------------------
                             Exercise    Realized      Exercis-    Unexercis- Exercis-   Unexercis-
Name                            (#)          ($)         able        able       able       able
---------------------------- ---------   ---------   ------------  ---------  ---------  ---------
Kimra Hawley................        0           0        256,500     77,500          0          0

Stephen Francis.............        0           0        205,000    225,000          0          0

John Finegan.................       0           0         35,767     17,462          0          0

Matthew Albanese............        0           0              0          0          0          0

Joseph Falk.................        0           0         35,000          0          0          0

Johannes Schmidt............        0           0         70,000          0          0          0

David Sharp.................        0           0         31,275     40,625          0          0

John Stetak.................        0           0         17,188     25,812          0          0`

Equity Compensation Plan Information

The following table gives information about ActionPoint common stock that may be issued
upon the exercise of options, warrants and rights under all of the company's existing
equity compensation plans as of December 31, 2001, including ActionPoint's 1993 stock
option/ stock issuance plan, 1998 employee stock purchase plan, and 1999 stock plan.

EQUITY COMPENSATION PLAN TABLE

`Number of shares
                                                                      remaining available for
                         Number of Shares to be   Weighted-average    future issuance under
                        issued upon exercise of  exercise price of    equity compensation
Plan Category or         outstanding options,   outstanding options,  plans (excluding share
Type of Options          warrants and rights    warrants and rights   reflected in column (a)
                                 (a)                   (b)                       (c)
-------------------   ------------------------  -----------------     -------------------
ActionPoint equity
 compensation plans
 approved by
 security holders..                 1,450,241              $5.17               1,212,414 (*)

ActionPoint equity
 compensation plans
 not approved by
 security holders..                  (371,850)             $4.62                (374,244)

Total ActionPoint
 compensation
 plans.............                (1,822,091)             $5.06              (1,586,658)(*)`

___________________

(*)    Includes [50,000] shares which may be sold to ActionPoint employees under
ActionPoint's employee stock purchase plan.



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ActionPoint's employees and consultants are eligible for awards under the 1999 stock
plan as long as they are not members of ActionPoint's board of directors or executive
officers of ActionPoint.  The exercise price of an option may not be less than the fair
market value of the underlying stock on the date of grant and no option may have a term
of more than ten years.  All of the options that are currently outstanding under the plan vest
as follows: 25% one year after the vesting commencement date determined by ActionPoint's
Compensation Committee and in equal monthly installments for 3 years thereafter.
All of the options expire ten years from the date of grant.  The ActionPoint board of
directors may amend or terminate the plan without stockholder approval, but no amendment or
termination of the plan may be made that would affect any award previously made under the
plan.

Compensation Committee Interlocks and Insider Participation

No member of the ActionPoint's compensation committee is a former or
current officer or employee of ActionPoint or any of its subsidiaries.  No
executive officer of ActionPoint serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of ActionPoint's board of directors or compensation
committee.

Change in Control Arrangements and Employment Contracts

Outstanding options held by executive officers that were granted under
the 1993 option plan will become immediately exercisable in full and unvested
shares will become fully vested, in the event of certain changes in the
ownership or control of ActionPoint.  The merger of ActionPoint and Captiva will
not constitute a change in control under the 1993 option plan.  None of the
ActionPoint executive officers have employment agreements with ActionPoint, and
they or ActionPoint may terminate their employment at any time subject to the
terms and conditions of the existing severance agreements and the new severance
agreements ActionPoint has entered into with certain of its executive
officers.

Existing Severance Agreements

Prior to pursuing a merger with Captiva, ActionPoint had existing
severance agreements with certain of its executive officers, including Stephen
Francis, John Finegan, John Stetak and Matthew Albanese.  These existing
severance agreements were unaffected by the new severance agreements entered
into with each of Stephen Francis, John Finegan, John Stetak, James Vickers,
Matthew Albanese and David Sharp in connection with the merger.  The merger with
Captiva will not constitute a change in control under the existing severance
agreements but will constitute a change in control under the new severance
agreements.  The merger will therefore result in the possible availability of
certain severance benefits to ActionPoint's executive officers under the new
severance agreements, including the right to six, ten or twelve months salary,
upon their voluntary termination.  Mr. Stetak's employment will terminate effective
upon the merger or shortly thereafter, and therefore he will likely be entitled
to severance benefits at that time under his new severance agreement.
For a description of the new severance
agreements, see "Other Agreements-New Severance Agreements" on page
87.

The existing severance agreements provide that each of these officers is
entitled to benefits if:

- ActionPoint terminates his employment without cause within twelve months
after a change in control; or
- he resigns for good reason within six months after a change in
control.

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The benefits include a lump sum severance payment equal to 100% of the annual
salary for ActionPoint's chief executive officer, Mr. Francis, and 50% of
the annual salary for the other executive officers.  The benefits also include
continuation of group insurance coverage for a period of 12 months for Mr.
Francis, and 6 months for the other officers.  However, group insurance coverage
terminates when the officer becomes eligible for comparable coverage in
connection with new employment.  Finally, the existing severance agreements
provide that the officers are entitled to prorated bonuses for the year in which
their employment terminates.  As a condition of providing these benefits,
ActionPoint may require that the officer remain employed for up to 90 days to
ensure an orderly transition and that the officer execute a release of all
claims that he may have against ActionPoint.

For purposes of the existing severance agreements, the term "change in
control" generally includes:

- a merger after which ActionPoint's stockholders own less than 50% of the
surviving corporation's stock;
- a sale of all or substantially all of ActionPoint's assets;
- a proxy contest that results in the replacement of 50% or more of the
members of ActionPoint's board of directors over a 24-month period; or
- any transaction as a result of which another person owns 50% or more of
ActionPoint's stock.

The existing severance agreements generally provide that an officer's
resignation will be for "good reason" under the following
circumstances:

- the officer has incurred a material reduction in his authority or
responsibility, with the result that the officer's position is no longer
comparable to the position that he held before the change in control;
- the officer has incurred a reduction of more than 10% in his base
salary;
- the officer has been notified that his principal place of work will be
relocated, with the result that the officer's commuting distance will increase
by more than 40 miles; or
- the officer becomes employed by a successor to ActionPoint and the successor
fails to assume the existing severance agreement.

Report of ActionPoint's Compensation Committee

The following is the report of the compensation committee of the board of
directors, describing the compensation policies and rationale applicable to
ActionPoint's executive officers with respect to the compensation paid to such
executive officers for the year ended December 31, 2001.

Purpose of the Compensation Committee. The committee is responsible
for determining compensation levels for ActionPoint's executive officers for
each fiscal year based upon a consistent set of policies and procedures.

Committee Structure.  The committee is made up of two independent,
non-employee members of the board of directors who meet during the first quarter
of each fiscal year to set executive officer salaries, and as needed thereafter.
No prior or current member of the committee has any interlocking relationships
as defined by the Securities and Exchange Commission.

Objectives of the Compensation Program.  The objectives of the
compensation program are: (1) to provide a means for ActionPoint to attract and
retain high-quality executives, (2) to tie executive compensation directly to
ActionPoint's business and performance objectives, and (3) to reward outstanding
individual performance that contributes to the long-term success of
ActionPoint.

Elements of Compensation.  Each executive officer's compensation
package is ordinarily comprised of three elements: (1) base compensation, which
reflects individual performance and is designed primarily to be competitive with
salary levels in a comparative group, (2) annual bonus plan compensation
ordinarily payable in cash and tied to

109

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Base Compensation.  The base compensation for each executive officer
is determined using an analysis of competitive salary ranges provided by an
independent public accounting firm focusing on companies similar in size and
business that compete with ActionPoint in the recruitment and retention of
senior personnel.  The committee believes that ActionPoint's most direct
competitors for executive talent are not necessarily all of the companies that
ActionPoint would use in a comparison of stockholder returns.  Therefore, the
compensation comparison group is not the same as the industry group in the index
used in the Performance Graph set forth in "
Information concerning ActionPoint--Comparison of ActionPoint Stockholder Return" on page
111.

For executive officers other than ActionPoint's chief executive officer, the
committee considers specifically the following factors in determining base
compensation: (1) a comparison of ActionPoint's growth and financial
performance relative to the performance of competitors, (2) salary levels
for comparable positions in the compensation comparison group and (3) each
executive's responsibility level and financial and strategic objectives for the
subsequent year.  The committee believes that the current base compensation for
executive officers is at the mid-range of the companies in the compensation
comparison group with which the ActionPoint competes for talent.

Annual Bonus Plan Compensation.  ActionPoint's annual bonus plan
provides for incentive bonus compensation to all officers and a number of key
employees based on the achievement of specific corporate performance targets
established during the year relating to revenues and operating profits as well
as specific individual performance objectives.

Long-Term Stock-Based Incentive Compensation.  Long-term
incentives are provided through stock option grants.  The grants are designed to
align the interests of each executive officer with those of the stockholders and
provide each individual with a significant incentive to manage ActionPoint from
the perspective of an owner with an equity stake in the business.  Each grant
generally allows the officer to acquire shares of the ActionPoint's common stock
at a fixed price per share (the market price on the grant date) over a specified
period of time (up to 10 years).  Each option generally becomes exercisable in
installments over a four-year period, contingent upon the executive officer's
continued employment with ActionPoint.  Accordingly, the option will provide a
return to the executive officer only if the executive officer remains employed
by ActionPoint during the vesting periods, and then only if the market price of
the shares appreciates over the option term.  The size of the option grant to
each executive officer, based on the aggregate exercise price, generally is set
to a multiple of salary that the committee deems appropriate in order to create
a meaningful opportunity for stock ownership based upon the individual's current
position with ActionPoint, but also takes into account comparable awards to
individuals in similar positions in the industry as reflected in external
surveys, the individual's potential for future responsibility and promotion over
the option term and the individual's personal performance in recent periods.
The committee also takes into account the number of vested and unvested options
held by the executive officer in order to maintain an appropriate amount of
equity incentive for that individual.  The weight of these various factors will
vary over time and with respect to each individual.  However, the committee does
not adhere to any specific guidelines as to the relative option holdings of
ActionPoint's executive officers.

ActionPoint's Option Exchange Program.  On July 10, 2001,
ActionPoint's board of directors approved an option exchange program pursuant to
which certain executive officers and employees were allowed to exchange all
outstanding options.  Options were tendered by 81 employees and 3 executive
officers, and those options were cancelled by ActionPoint on August 31,
2001.  Under the option exchange program, new options having exercise prices
equal to $2.43, the fair market value of ActionPoint common stock on
March 2, 2002, were granted to replace the options cancelled on
August 31, 2001.  The replacement options were issued with the same vesting
terms as the
options which they replaced.  Any employee whose employment
terminated prior to March 2, 2002 was not eligible to have his or her
options replaced.

Stock options are intended to provide incentives to ActionPoint's executive
officers and employees.  The compensation committee believes that such equity
incentives are a significant factor in ActionPoint's ability to attract, retain
and motivate key employees who are critical to the ActionPoint's long-term
success.  The compensation committee further believes that, at their original
exercise prices, the disparity between the exercise price of these options and
the then market prices for the ActionPoint common stock did not provide
meaningful incentives to the

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The board of directors approved the option exchange program as a means of
ensuring that optionees will continue to have meaningful equity incentives to
work toward ActionPoint's success.  The option exchange program was deemed by
the board of directors to be in the best interests of ActionPoint and its
stockholders.

Chief Executive Officer's Compensation.  Compensation for the chief
executive officer is determined by a process similar to that discussed above for
executive officers.  Mr. Francis's base compensation for fiscal 2001 was
established by the board of directors in June 2001.  The committee established
Mr. Francis's base salary adjustment based on an evaluation of his personal
performance and the objective of having his base salary keep pace with salaries
being paid to similarly situated chief executive officers.  Further, the
Committee intends base salary to provide Mr. Francis with a level of stability
and certainty each year and intends that this particular component of
compensation not be affected to any significant degree by company performance
factors.

The remaining components of Mr. Francis's 2001 compensation, however, were
dependent upon company financial and shareholder value performance and provided
no dollar guarantees.  Incentive bonus compensation for Mr. Francis for the 2001
fiscal year was largely dependent on the achievements of specific corporate
performance targets established in the middle of the fiscal year when Mr.
Francis was appointed president and chief executive officer, as set forth above
in the discussion of the annual bonus plan compensation.

Deduction Limit for Executive Compensation.  Section 162(m) of the
Internal Revenue Code, enacted in 1993, limits federal income tax deductions for
compensation paid to the chief executive officer and the four other most highly
compensated officers of a public company to $1 million per year, but contains an
exception for performance-based compensation that satisfies certain conditions.

The committee believes that option grants under the 1993 option plan are
exempt from the deduction limit.  Because it is unlikely that other compensation
payable to any ActionPoint executive has materially exceeded or would exceed the
deduction limit in the near future, the Committee has not yet considered whether
it will seek to qualify compensation other than options for the performance-
based exception or will prohibit the payment of compensation that would
materially exceed the deduction limit.  However, in approving the amount and
form of compensation for ActionPoint executives, the committee will continue to
consider all elements of cost to ActionPoint of providing that compensation.

Submitted by the compensation committee of the ActionPoint's board of
directors:

Daniel Tompkins, Chairman
Patrick Edsell

Comparison of ActionPoint Stockholder Return

This graph reflects a comparison of the cumulative total return (change
in stock price plus reinvested dividends) of ActionPoint's common stock price
with the cumulative total returns of the S&P Midcap 400 Index and the
S&P Technology Sector Index.  The graph covers the five years from December
31, 1996, through the fiscal year ended December 31, 2001.  The graph assumes
that $100 was invested on December 31, 1996 in ActionPoint's common stock and in
each index and that all dividends were reinvested.  No cash dividends have been
declared on ActionPoint's common stock.  Stockholder returns over the indicated
period should not be considered indicative of future stockholder returns.

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`Cumulative Total Return
                           -----------------------------------------------------------
                             12/96     12/97     12/98     12/99     12/00     12/01

ACTIONPOINT, INC.           $100.00    $69.83    $79.31   $192.25    $28.46    $22.34
S&P MIDCAP 400               100.00    132.25    157.53    180.72    212.36    196.43
S&P TECHNOLOGY SECTOR        100.00    126.09    218.11    381.99    229.38    174.89`

The performance graph and all of the material in the reports of the
compensation committee and the audit committee of ActionPoint's board of
directors which appear elsewhere in this joint proxy statement/prospectus are
not deemed filed with the Securities and Exchange Commission, and are not
incorporated by reference to any filing of ActionPoint under the Securities Act,
or the Securities Exchange Act of 1934, as amended, or the Exchange Act, whether
made before or after the date of this joint proxy statement/prospectus and
irrespective of any general incorporation language in any such filing.

Report of ActionPoint's Audit Committee

The audit committee was organized in June 2000.  The audit committee for
the last fiscal year consisted of James E. Crawford, III (until August 2001),
Patrick Edsell (since August 2001), Daniel Tompkins and Bruce Silver.  The audit
committee held four meetings during the last fiscal year.

ActionPoint's management has primary responsibility for preparing
ActionPoint's financial statements and the financial reporting process.
ActionPoint's independent public accountants, PricewaterhouseCoopers LLP, are
responsible for expressing an opinion on the conformity of ActionPoint's audited
financial statements to generally

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In this context, the audit committee hereby reports as follows:

- The audit committee has reviewed and discussed the audited financial
statements with ActionPoint's management and the independent public accountants.
- The audit committee has discussed with the independent accountants the
matters required to be discussed by Statement on Auditing Standards No. 61.
- The audit committee discussed with the independent public accountants the
accountants' independence from ActionPoint and its management.  The audit
committee has received the written disclosures and the letter from the
independent accountants required by independence standards board standard
no. 1.

Audit Fees.  Aggregate fees for professional services rendered by
PricewaterhouseCoopers in connection with its audit of ActionPoint, Inc.'s
consolidated financial statements as of and for the year ended December 31, 2001
and its limited reviews of its unaudited condensed consolidated interim
financial statements were $103,000.

Financial Information Systems Design and Implementation Fees.  During
the year ended December 31, 2001,      PricewaterhouseCoopers rendered no
professional services to ActionPoint, Inc. in connection with the design and
implementation of financial information systems.

All Other Fees.  In addition to the fees described above, aggregate
fees of $78,320 were billed by PricewaterhouseCoopers during the year ended
December 31, 2001, primarily for income tax compliance and related tax services
and for audit-related services.  The Audit Committee has determined that the
provision of the services by PricewaterhouseCoopers included in the category
"All Other Fees" was compatible with maintaining their independence.

Based on the review and discussions referred to above, the audit committee
recommended to the board of directors of ActionPoint, and the board has
approved, that the audited financial statements be included in ActionPoint's
annual report for the fiscal year ended December 31, 2001, for
filing with the Securities and Exchange Commission. The committee and the board
also have recommended, subject to stockholder approval, the selection of
PricewaterhouseCoopers LLP, as our independent public accountants.

Each of the members of the audit committee is independent as defined under
the listing standards of The Nasdaq National Market.

Submitted by the audit committee of ActionPoint's board of directors:

Patrick Edsell
                  Daniel Tompkins
                  Bruce Silver



ActionPoint's Related-Party Transactions

Severance Agreements.  In connection with the merger, ActionPoint
entered into severance agreements with each of Stephen Francis, John Finegan,
John Stetak, Matthew Albanese, James Vickers and David Sharp, providing for
severance benefits in the event their employment is terminated.  These new
severance agreements are in addition to the existing severance agreements with
each of Stephen Francis, John Finegan, John Stetak and Matthew Albanese.  These
executive officers will not be entitled to any severance benefits under the
existing severance agreements as a result of the merger.

Separation and Release Agreements.  In June 2001, ActionPoint entered
into a separation and release agreement with Kimra Hawley.  The terms of the
agreement provide that ActionPoint will reimburse Ms. Hawley

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In October 2001, ActionPoint entered into a separation and release agreement
with Joseph Falk.  Pursuant to the agreement, Mr. Falk received a lump sum
payment of $130,000.  In addition, options to purchase 35,000 shares of
ActionPoint common stock held by Mr. Falk were accelerated and became fully
vested, and the exercise date for those options was extended to September 30,
2002.  Mr. Falk agreed to release ActionPoint from any and all claims arising
from or relating to his employment with ActionPoint.

Employment Agreement with Johannes Schmidt.  In June 2001, ActionPoint
entered into an employment agreement with Johannes Schmidt to convert his full-
time employment status to part-time for a term of not less than three months.
During this term, Mr. Schmidt will serve as chief technologist for ActionPoint
and, in exchange for such services, Mr. Schmidt will receive an annual salary of
$110,187.48 and be eligible to receive a bonus equal to 35% of his annual
salary.  Mr. Schmidt agreed to surrender his vested options to purchase up to
115,000 shares of ActionPoint common stock.

Options Regrants.  In connection with an option exchange program, John
Finegan, John Stetak and Matthew Albanese tendered to ActionPoint options
exercisable for 446,771 shares of ActionPoint common stock in the aggregate at
various exercise prices.  The tendered options were canceled on August 31, 2001
and the same aggregate number of replacement options was granted to these
executive officers on March 2, 2002 at an exercise price of $2.43 per share, the
then market price for shares of Action Point common stock.

Novus Ventures.  As a result of the merger, Novus Ventures, L.P. will
receive approximately 181,706 shares of ActionPoint common stock.  Thomas van
Overbeek, Kimra Hawley and Daniel Tompkins, each a director of ActionPoint, are
beneficial owners of shares of Captiva preferred stock held by Novus Ventures.
Messrs. van Overbeek and Tompkins are general partners of Novus Ventures, and
Ms. Hawley is married to Mr. van Overbeek.

Enterprise Partners.
  Patrick Edsell serves as a director and the chief executive
officer of Gigabit Optics Corporation, an early-stage venture capital-backed
company.  A limited partnership that is affiliated with Enterprise Partners III,
L.P. owns approximately 19.9% of Gigabit and has representative on the Gigabit
board of directors.  Enterprise Partners III, L.P. will beneficially own
approximately 6.6% of Captiva's common stock immediately prior to the merger.

Indemnification of Directors and Officers. Pursuant to its
certificate of incorporation, ActionPoint limits the liability of its directors
for monetary damages arising from a breach of their fiduciary duty as directors,
except to the extent otherwise required by Delaware law.  Such limitation of
liability does not affect the availability of equitable remedies such as
injunctive relief or rescission.  In addition, the bylaws of ActionPoint require
that ActionPoint indemnify its directors and officers to the fullest extent
permitted by Delaware law, including circumstances in which indemnification is
otherwise discretionary under Delaware law.  ActionPoint has entered into
indemnification agreements with its officers and directors containing provisions
that may require ActionPoint, among other things, to indemnify such officers and
directors against certain liabilities that may arise by reason of their status
or service as directors or officers and to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
ActionPoint's directors, executive officers and persons who beneficially own
more than 10% of a registered class of ActionPoint's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of
ActionPoint.  ActionPoint's officers, directors and greater than 10% beneficial
owners are required by Securities and Exchange Commission regulations to furnish
ActionPoint with copies of all Section 16(a) reports they file.

Based solely upon review of the copies of such reports furnished to
ActionPoint and written representations that no other reports were required,
ActionPoint believes that there was compliance for the fiscal year ended

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INFORMATION CONCERNING CAPTIVA

Captiva's Business

Captiva was originally incorporated in Delaware in 1989 as TextWare
Corporation.  In 1997, Captiva acquired Symbus Technology, Inc. and changed its
name to FormWare Corporation.  In 1998, Captiva acquired Wheb Systems, Inc.,
changed its name to Captiva Software Corporation and became a California
corporation.  Captiva's principal executive offices are located at 10145 Pacific
Heights Boulevard, San Diego, California 92121 and its telephone number is (858)
320-1000.

Business Overview.  Captiva is a leading provider of software that
automates the processing of paper and electronic forms, documents and electronic
data in an eXtensible Markup Language (or XML) format, which is an emerging
standard for structuring data.  Captiva's software converts these information
sources into more valuable digital information usable in database and other
information management systems.  This is typically accomplished in a
significantly more accurate, timely and cost effective manner than the manual
processes Captiva's software products have replaced.  This in turn often
increases the users' revenues, for example, by accelerating enrollment or credit
approval processes, and improves their customer service operations, for example,
by making more accurate information accessible more quickly.  Captiva believes
that organizations are acutely aware of the benefits of automation and problems
associated with manual information capture.  The problems with manual processing
and the benefits of automation in information capture and processing will become
increasingly evident as the volume of forms and documents processed grows.
According to Strategy Partners, an independent information technology research
and consulting firm, the worldwide form and document capture market will grow
from $1.02 billion in 2000 to $2.14 billion in 2003-a 19.8% compound annual
growth rate.  Presently, Captiva's software products serve more than 600 users
in insurance, financial services, banking, government, business process
outsourcing, retail and other markets.  Captiva estimates its software products
process more than 5 billion forms and documents annually.

Industry Background

The Information Capture Problem.  Enormous quantities of information
flow into businesses and other organizations on a daily basis.  Most of this
information comes from customers, suppliers, employees and other third parties
conducting transactions or corresponding through the use of paper forms and
documents and, increasingly, electronic forms and documents.  Examples of these
forms and documents include medical claims, credit applications, new account
enrollments, tax returns, invoices, legal briefs, regulatory filings and other
information intensive forms and documents.  Predictions have been made that the
use of paper forms and documents would rapidly decline in favor of their
electronic counterparts.  In fact, the use of both of these information mediums
is increasing at a significant rate and both paper and electronic forms and
documents are expected to remain in use for the foreseeable future.  For
example, in 2000 Xerox Corporation stated that the percentage of paper versus
electronic documents is expected to decline from 90% today to 40% in 2005 but
also predicted a 400% increase in the volume of printed pages.  These increases
have and will continue to fuel rapid growth in the amount of information that
needs to be entered into database, enterprise content management, enterprise
resource planning, customer relationship management, financial accounting and
other information management systems.

Regardless of the source, pertinent information must be extracted, perfected,
formatted and exported into an organization's information management systems as
quickly and cost effectively as possible.  Irrelevant, incorrect or invalid
data, processing delays and inefficient methods can adversely impact an
organization's revenues, operating expenses and interactions with customers,
suppliers and employees.  For example, an incorrect policy number for a medical
insurance claim can cause the claim to be rejected, which necessitates a second
submission and processing cycle or exception processing and additional
correspondence, causing delays in payment to the provider, telephone calls from
both the provider and the insured and a reduced level of customer satisfaction.
Conversely, accurate, timely and cost effective information capture processes
can increase an organization's revenue, reduce its expenses and improve its
relationships with customers, suppliers and employees.

Current Approaches are Inadequate.  Current approaches to capturing
data from paper forms and documents rely principally upon manual data entry.
According to Harvey Spencer Associates, a consultancy specializing in
information capture, organizations in the United States spend $15 billion a year
manually keying data from forms alone.  Organizations generally perform this
work internally or outsource it to business process outsourcing firms.  Both
approaches have inherent problems.  Organizations performing this work
internally usually distribute it on a

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Alternative approaches to capturing data include electronic data interchange,
electronic forms and documents and, more recently, e-commerce applications.  All
of these approaches have inherent problems and limitations.  Electronic data
interchange is difficult to implement and has been adopted in only a few
vertical markets, such as medical claims processing, where approximately 50% of
all claims continue to be submitted on paper forms.  Electronic forms and
documents suffer from the absence of a standard data exchange format and limited
acceptance of legally binding, digital signatures.  As a result, the use of
electronic forms and documents has usually been limited to certain types of
intra-company applications.  The Internet provides a platform for e-commerce
applications which have potentially broad applicability but suffer from high
Internet site abandonment rates.  According to Forrester Research, an
independent information technology research firm, less than 5% of visitors to an
e-commerce site attempt to purchase and only 33% of those attempting to purchase
actually do so.  Similarly, large financial service and insurance companies
report that over 95% of all Internet transactions are abandoned prior to
completion.

All of these data capture methods require substantial custom application
development and maintenance, feature minimal data validation capabilities, are
disparate, single point technologies and are incapable of capturing data from
legacy and new paper forms, documents and attachments.  Gartner Group, another
independent information technology research firm, estimates that for every
dollar spent on Internet applications software organizations should expect to
spend from five to twenty dollars on services, especially integration of
Internet applications with existing information management systems.

Many organizations processing paper and electronic data intensive
transactions are acutely aware of these problems and are seeking a more
comprehensive solution.

Captiva's Solution

Captiva's solution provides a universal information capture platform
and related services.  This solution provides Captiva's customers with the
following more important benefits:

The Ability to Capture Data from Diverse Sources and Export Data to Most
Information Management Systems.  Captiva's solution enables capture from
paper, faxed and scanned forms, documents and attachments, electronic forms and
electronic data in XML format, as both separate and hybrid transactions.  Hybrid
means transactions in which information must be captured from more than one
source.  For example, a credit application submitted via an electronic form and
the related paper attachments, such as tax returns and W-2 forms submitted via
fax, both of which contain information required to complete the process.
Captiva's solution also provides the ability to export data in many formats,
including XML, to most information management systems.  This allows Captiva's
customers to deploy and benefit from a single, fully integrated data capture
solution as opposed to multiple separate technologies and systems.

A More Accurate, Timely and Cost Effective Information Capture Process.
Captiva's software products allow customers to capture information from all
sources in a more accurate, timely and cost effective manner while consistently
applying a single set of business rules throughout the capture process.  This
allows Captiva's customers to achieve higher information accuracy rates, faster
processing times and lower operating costs.  These benefits can increase the
user's revenues, reduce expenses and improve relationships with customers,
suppliers and employees.

Rapid Implementation Timeframes.  Captiva's software products utilize
a single, integrated environment that enables rapid application development,
testing and deployment.  Captiva also offers professional services to assist
customers with these tasks or to perform them entirely on their behalf.  These
capabilities allow Captiva's customers to achieve lower implementation costs and
shorter implementation timeframes.

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A Highly Flexible, Open and Scalable System.  Captiva's software
products provide a modular platform with an open architecture that is scalable
from a single personal computer to large computer networks processing from
several hundred to hundreds of thousands of forms and documents a day.  This
allows Captiva's customers to configure systems and supplement Captiva's
software products with third party software and hardware products in order to
meet their unique requirements and easily expand their systems should the need
arise.

An Increased Return on Information Technology Investments.  Captiva's
software products typically provide a 12- to 24-month return on investment
through reduced manual data entry costs alone.  They also improve the quality
and timeliness of information, which significantly increases its value.

Captiva's Strategy

Captiva's objective is to extend its position as a leading provider
of information capture software.  Key elements of Captiva's strategy to achieve
this objective include:

Leverage Customers, Resellers, System Integrators and Strategic
Cooperative Marketing Partners.  Captiva perceives significant opportunities
to leverage the use of its software by its existing customer base and through
its resellers, system integrators and strategic cooperative marketing partners.
Captiva's new customers generally deploy Captiva's software on a departmental
basis or for limited form or document types.  Captiva believes that high levels
of satisfaction with these initial deployments can lead to enterprise-wide
adoption of Captiva's software.  In addition, because many of the leading
resellers and system integrators remarket Captiva's software and because Captiva
has strategic cooperative marketing partners who offer synergistic products,
Captiva benefits from a multiplier effect as existing users expose Captiva's
software to more of their current and prospective customers.

Capitalize on XML as a Standard Data Exchange Format.  XML is an
emerging standard for structuring data that allows XML enabled software products
to exchange electronic data without extensive and costly custom application
development and maintenance.  The World Wide Web Consortium formally recommended
XML as a standard in February 1998.  Since then a number of industry leaders,
including Microsoft, SAP, IBM, Sun and Oracle, have announced support for XML.
Captiva believes this support will drive the rapid adoption of XML based
replacements for current electronic data interchange applications, growing
demand for information in XML format and the open integration of applications
across enterprises in general.  Captiva's software enables information capture
from electronic forms and data in XML format, and the export of information in
XML format, regardless of its source.  Captiva intends to leverage these
capabilities with the goal of increasing revenues.

Leverage Professional Services Staff.  Captiva's professional services
staff is among the largest and most experienced in the information capture
market.  This allows Captiva to respond to the implementation needs of its
customers, resellers and system integrators in a timely manner and gives Captiva
the ability to manage multiple concurrent deployments while maintaining a strong
commitment to quality.  The ability to meet customers' needs enables Captiva to
establish strong relationships with these parties.  Captiva intends to commit
significant resources to continue growing its professional services staff in
order to gain competitive advantage.

Strengthen Captiva's International Presence.  Captiva believes there
are significant opportunities to increase sales of its software and services in
international markets, but in each of 1999, 2000 and 2001 Captiva derived less
than 15% of its revenues from outside the United States.  To take advantage of
these perceived opportunities, Captiva has formed local subsidiaries, opened
offices and hired sales, marketing and professional services staff in Australia,
Germany and the United Kingdom, established a distributor for its software in
Japan and introduced localized German and Japanese versions of its software.
Captiva intends to continue expending resources in order to increase its
international presence and revenues.

Maintain Technology and Product Leadership.  Captiva's products are
among the most comprehensive information capture software products available
today.  Captiva has devoted significant resources to developing its software and
intends to continue investing in software development to ensure that its
software incorporates the most current technology and standards.  Captiva also
intends to increase the performance, functionality and ease of use of its
software and to support information capture from additional information sources,
such as speech and personal digital assistants and other wireless devices.

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Captiva's Software and Services

Captiva provides a universal information capture platform marketed
under the name FormWare.  The FormWare software suite began shipping in 1996 and
now provides a comprehensive set of fully compatible modules that work in
conjunction with one another to capture data from paper, faxed and scanned
forms, documents and attachments, electronic forms and documents and electronic
data in XML format, in both separate and hybrid transactions.  Furthermore,
Captiva provides a complete range of professional and technical services that
complement its software.  The key elements of Captiva's information capture
software and services are as follows:

Captiva's Software Products.  FormWare is a sophisticated 32 bit
application for use on standalone personal computers and client-server systems
using Microsoft Windows 98, NT, 2000 and XP.  FormWare Enterprise Edition is
available for implementing mission critical, production level solutions on
client-server platforms.  FormWare Desktop Edition provides many of these
capabilities in a tightly integrated bundle for less demanding applications on
standalone personal computers.  Both are available in English, German and
Japanese versions, and Captiva expects to provide additional localized versions
as part of its strategy to increase its international presence and revenues.

Because Captiva's customers are regularly required to capture large amounts
of information within short timeframes in order to meet inflexible deadlines,
Captiva has optimized FormWare to provide this level of system performance and
availability.  FormWare uses complex queuing algorithms to ensure less than one
second response times and minimize the number of system calls required to
complete various tasks.  Many of FormWare's modules function as servers, which
means that their resources can be shared by multiple users and that additional
modules can be added as required to address more complex processing or greater
throughput requirements.  In the event of a system failure, the entire FormWare
system or a single module can be restarted with no loss of data or significant
duplicate processing.  Depending upon the FormWare module, Captiva's software is
licensed on either a per server or per concurrent user basis.

FormWare software currently includes the following modules:

|Module                                        | Initial Shipment Date | Description                                                                                                                                                                                                                                                                                          
|--------------------------------------------- | --------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Designer                                      | November 1996         | Provides a single, integrated environment that enables rapid
application development, testing and deployment of information capture
applications                                                                                                                                                     
|Administration                                | November 1996         | Includes system configuration, management, statistics, reporting
and security capabilities                                                                                                                                                                                                           
|JobFlow                                       | November 1996         | Provides specialized workflow based on a proprietary file system
that is optimized for routing, tracking and monitoring large amounts of data and
images and the handling of exceptions without delaying the downstream processing
of valid data                                                     
|WorkFlow                                      | June 2001             | Provides specialized workflow based on Microsoft SQL Server as
an alternative to JobFlow                                                                                                                                                                                                             
|Scan & Import                                 | November 1996         | Supports the scanning of paper forms, documents and attachments
using most commercially available production level scanners and the automated
importing of scanned or faxed images and electronic data in many formats,
including XML, which are received from other devices or applications         
|Image Quality Control                         | May 1999              | Allows for the automated or visual inspection of scanned and
faxed images to ensure their quality and usefulness for downstream
processes                                                                                                                                                            
|Form & Document Identification Server         | November 1996         | Automates the identification of forms and documents in
intermixed batches                                                                                                                                                                                                                            
|Virtual Classification & Auto Learning Server | March 2002            | Automates the creation of virtual templates to be used in
extracting data from forms containing the same data in highly variable
formats                                                                                                                                                             
|Image Pre-Processing Server                   | November 1996         | Automates the enhancement of images and faxes to improve
downstream processes and the removal of form backgrounds to improve recognition
accuracy                                                                                                                                                    
|Recognition Server                            | November 1996         | Automates the extraction of data from machine print, hand print,
cursive handwriting, marks and barcodes in scanned and faxed images using
optical character recognition, intelligent character recognition, optical mark
recognition, barcode recognition technologies and voting algorithms        
|FreeForm Server                               | May 1999              | Applies recognition technologies to entire forms or documents
and then parses through the results using key word searches to locate the
desired information                                                                                                                                          
|PDF Conversion Server                         | May 1999              | Automates the conversion of images and data into Adobe's
Portable Document Format, word processing files and the HyperText Markup
Language (HTML) format and enables the creation of full text indexes                                                                                               
|Rules Processor Server                        | May 1999              | Automates the validation of data by consistently applying an
organization's business rules to all information captured on a continual basis
throughout the capture process in order to perfect data as soon as possible and
minimize the downstream manual intervention required                     
|Completion                                    | November 1996         | Provides productive and ergonomically correct methods for
performing manual data entry from paper or images of data that could not be
extracted using recognition technologies and allows for reject repair of
questionable data extracted using recognition technologies and double key
verification
|Internet Server                               | April 2000            | Aggregates information submitted by electronic forms and XML
data streams and supports the ability to run FormWare modules in highly
distributed, remote locations over the Internet or dedicated telecommunications
lines                                                                           
|Filler                                        | April 2000            | Provides for manual data entry into electronic forms without
being connected to the Internet or dedicated telecommunications lines, the
temporary storage of that data and the ability to transmit that data to the
Internet Server over the Internet or dedicated telecommunications lines          
|Export Server                                 | May 1999              | Automates the formatting of data in many formats, including XML,
and the exporting of data and images to most information management
systems                                                                                                                                                         

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FormWare also includes an open architecture with many application
programming interfaces and access to real time event and data level information.
These features and FormWare's modular platform allow Captiva's customers,
resellers and system integrators to programmatically control processing
sequences, supplement Captiva's solution with third party software and hardware
products, configure systems to meet their unique needs and easily expand systems
to meet new requirements.

Captiva also offers two vertical market applications that run on FormWare's
information capture platform.  ClaimPack is for the processing of medical claims
submitted on HCFA 1500 and UB 92 forms, and InvoicePack is for automating the
manual keying of data from invoices by accounts payable staff.  The use of these
applications can speed deployment times by typically providing 80% or more of
the functionality required with the remainder being implemented by Captiva's
customers, resellers, system integrators or professional services staff.

Captiva's Services

Captiva's AdvantEDGE services program allows Captiva to better
address the implementation needs of customers, resellers and system integrators
and achieve a greater level of customer satisfaction.  This program includes a
comprehensive range of services provided by Captiva's professional and technical
services staff, which consisted of 57 employees as of December 31, 2001.

Captiva's professional services staff provides project management, functional
and detailed specification preparation, application development, form redesign,
system configuration, quality assurance, installation and application specific
training services to customers.  While Captiva's resellers and system
integrators can and do provide these services to their customers, they often
also ask Captiva to provide these services to their customers on a subcontract
basis.  Captiva generally charges for professional services on a fixed fee basis
for projects utilizing mutually agreed upon functional and detailed
specifications and for other projects on a time and materials basis.

Captiva's technical services staff provides for the dependable and timely
resolution of technical inquiries by telephone, email and over the Internet and
a set of regularly scheduled training classes usually held at Captiva's offices
in San Diego, California and Waltham, Massachusetts.  Captiva offers several
levels of customer support, with the most comprehensive option covering 24 hours
a day, seven days a week.  Captiva generally charges for customer support based
upon a percentage of the related software license fees and classroom training on
a per attendee basis.

Captiva's Customers

As of December 31, 2001 Captiva had licensed its software to over 600
customers.  Captiva's software has been designed to address the needs of a broad
range of businesses, including those in the insurance, financial services,
banking, government, business process outsourcing, retail and other markets.

For the years ended December 31, 2001 and December 31, 2000 no customer
accounted for more than 10% of Captiva's total revenues.  In 1999 Citicorp
accounted for 13% of Captiva's total revenues.

Sales, Marketing & Business Development

Captiva sells information capture software and services through its
direct sales staff, resellers who package Captiva's software with their product
offerings and system integrators, often in conjunction with strategic
cooperative marketing partners.  Approximately 50% of Captiva's sales are made
through resellers and system integrators and the remainder comes from Captiva's
direct sales staff.  Captiva believes its ability to successfully work with and
through these diverse and sometimes competing groups represents a significant
competitive advantage.  As of December 31, 2001, Captiva's sales, marketing and
business development staff consisted of 46 employees and Captiva had over 85
resellers, system integrators and strategic cooperative marketing partners.
Captiva intends to aggressively expand its sales and marketing staff and
activities increase the number of its resellers, system integrators and
strategic cooperative marketing partners.

Captiva's sales strategy involves targeting organizations with forms or
document capture needs that either already recognize or can be educated about
their information capture problems.  Because Captiva's software can increase an
organization's revenue, reduce its expenses and improve its relationships with
customers, suppliers and employees, Captiva directs its selling efforts to
senior management, including executives responsible for information

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Captiva uses a variety of marketing programs to build awareness of data
capture problems and Captiva's software and brand name, including market
research, product and strategy updates with industry analysts, public relations
activities, direct mail and relationship marketing programs, seminars, trade
shows, speaking engagements and Internet site marketing.  Captiva's marketing
staff also produces collateral materials to support sales to prospective
customers that include brochures, data sheets, white papers, customer success
stories, presentations and demonstrations.

Captiva's resellers and system integrators include American Management
Systems, BancTec, DST, EDS, Lockheed Martin, Logicon (a Northrop Grumman
company), Nissho Electronics Corporation, PFPC (PNC's mutual fund servicing
subsidiary) and Unisys.  These distribution channels currently represent
Captiva's solution in Australia, Germany, Japan, the United Kingdom and the
United States.  In the years ended December 31, 2001 and 2000 none of Captiva's
resellers or system integrators accounted for more than 10% of Captiva's total
revenues.  In 1999 BancTec accounted for 16% of Captiva's total revenues.

Captiva believes strategic cooperative marketing partners who offer
synergistic products are important in selling and marketing Captiva's solution.
Captiva benefits from a multiplier effect as these partners expose Captiva's
solution to more of their customers and prospects.  As a result, Captiva has
developed arrangements with numerous strategic cooperative marketing partners,
including Eastman Kodak, FileNET, IBML, Information Management Resources, Optika
and OTG Software.

Software Development

Captiva believes that its future success will depend in large part on
its ability to enhance its software, develop new software, implement emerging
standards, maintain technology leadership and satisfy an evolving range of
customer requirements for existing and new information capture problems.
Captiva's software development staff is responsible for achieving these
objectives and consisted of 27 employees as of December 31, 2001.

Captiva believes that its software development staff is a key component in
the success of its software and represents a significant competitive advantage.
Captiva's software development staff includes many individuals who have
previously worked together in other organizations where they developed
alternative information capture solutions.  Captiva must attract and retain
highly qualified employees to further its software development efforts and
Captiva's business and operating results could be seriously harmed if it is not
able to do so.

Captiva's software development expenditures were approximately $2.30 million,
$2.59 million and $2.34 million in 2001, 2000 and 1999, respectively.  All
software development expenditures are expensed as incurred.  Captiva intends to
continue to devote substantial resources to these efforts.

Competition

Captiva has experienced and expects to continue experiencing
increased competition from current and potential competitors.  Some of these
companies may have greater name recognition, longer operating histories, larger
customer bases and significantly greater sales, marketing, product development,
technical, financial, distribution and other resources than Captiva.  In the
future, Captiva expects to face competition from these and other competitors,
including:

- companies addressing segments of the information capture market, including
Accelio, ActionPoint, Cardiff Software, CGK (an Oce company), Dakota Imaging,
Datacap, Easy Software, Improx (an Isis Holding AG company), IteSoft,
Kleindienst, Kofax (a Dicom Group company), Microsystems Technology, Mitek
Systems, PureEdge, ReadSoft, Recognition Research, Shana, Scan-Optics, Top Image
Systems and others;
- Electronic data interchange and e-commerce software vendors; and
- in-house development efforts by Captiva's customers, prospective customers,
resellers and system integrators.

Captiva may also face additional competition from database and content
management system vendors, enterprise and departmental software application
vendors, data warehouse vendors and other data intensive repository system
vendors and operating system vendors.  If the products sold now or developed in
the future by any of Captiva's competitors were to become the industry standard
or if such competitors were to enter into or expand relationships with
significantly larger companies through mergers, acquisitions or other similar
transactions, Captiva's business could be seriously harmed.  In addition,
potential competitors may bundle their products or incorporate functionality
into existing products in a manner that discourages users from purchasing
Captiva's solution.

Captiva believes that the principal competitive factors in the information
capture market are:

- solution performance, features, functionality and reliability;
- ability to provide professional services;
- price/performance characteristics;
- timeliness of new product introductions with minimal fixes;
- adoption of emerging standards;
- brand name; and
- access to customers.

Captiva believes that it compares favorably with its competitors with respect
to each of the above factors.  However, many of Captiva's existing and potential
competitors may have greater name recognition, stronger brand names, longer
operating histories, larger customer bases and greater sales, marketing, product
development, technical, financial, distribution and other resources than
Captiva.  These competitors also may be able to undertake more extensive
marketing campaigns, adopt more aggressive pricing policies and make more
attractive offers to distribution partners than Captiva can.  To remain
competitive, Captiva believes it must invest significant resources in enhancing
its current software and developing new software and maintaining customer
satisfaction.  If Captiva fails to do so, its software will not compete
favorably with those of Captiva's competitors and Captiva's business will be
significantly harmed.

Captiva expects that competition will continue to increase and that Captiva's
primary competitors may not have entered the market yet.  Increased competition
could result in price reductions, fewer customer orders, reduced gross margins
and a loss of market share, any of which could cause Captiva's operating results
to suffer.

Intellectual Property

Captiva believes its success and ability to compete is largely
dependent on its ability to develop and protect its proprietary technology.  To
protect its proprietary technology, Captiva relies primarily on patent,
trademark, service mark, trade secret, copyright laws and contractual
restrictions.

Use by customers of Captiva's software is governed by shrink-wrap or executed
license agreements.  Captiva also enters into written agreements with each of
its resellers and system integrators for the distribution of its software.  In
addition, Captiva seeks to avoid disclosure of trade secrets by requiring each
of its employees and others with access to proprietary information to execute
confidentiality agreements.  Captiva protects its software, documentation and
other written materials under trade secret and copyright laws, which afford only
limited protection.

Captiva currently holds a United States patent covering certain neural
networking capabilities used in Captiva's software.  It is possible that this
patent or potential future patents may be found invalid or unenforceable

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Despite Captiva's efforts to protect its proprietary rights, Captiva may be
unable to prevent others from infringing upon or misappropriating its
intellectual property.  Any steps Captiva takes to protect its intellectual
property may be inadequate, time consuming and expensive.  In addition, the laws
of some foreign countries do not protect Captiva's proprietary rights to the
same extent as the laws of the United States.

Substantial litigation regarding intellectual property rights exists in the
software industry.  To date Captiva has been notified that its technologies
infringe the proprietary rights of 2 other parties and has settled such claims
on terms Captiva considers to be favorable.  There can be no assurance that
others will not claim that Captiva has infringed proprietary rights relating to
past, current or future software or technologies.  Captiva could become subject
to intellectual property infringement claims as the number of its competitors
grows and as Captiva's software overlaps with competitive offerings.  These
claims, even if meritless, could be expensive, time-consuming to defend, divert
management's attention from the operation of Captiva and cause software shipment
delays.  If Captiva infringes another party's intellectual property rights,
Captiva could be required to pay a substantial damage award and to develop non-
infringing technology, obtain a license or cease selling the software that
contains the infringing intellectual property.  Captiva may be unable to develop
non-infringing technology or obtain a license on commercially reasonable terms,
if at all.

Captiva licenses some technologies from third parties.  There can be no
assurance that these technology licenses will not infringe the proprietary
rights of others or will continue to be available to Captiva on commercially
reasonable terms, if at all.  If Captiva cannot renew these licenses, shipments
of Captiva's software could be delayed until equivalent capabilities can be
developed or licensed and integrated into Captiva's products.  These types of
delays could seriously harm Captiva's business.

Employees

As of December 31, 2001, Captiva employed 154 full-time employees.
These included 46 in sales, marketing and business development, 57 in
professional and technical services, 27 in software development and 24 in
administration and finance.  Captiva's future success depends in part on its
ability to attract, retain and motivate highly qualified technical and
management personnel for whom competition is intense.  From time to time Captiva
has employed and Captiva will continue to employ independent contractors and
consultants to support its professional and technical services and research and
development.  None of Captiva's employees are represented by a collective
bargaining agreement and Captiva has never experienced a strike or similar work
stoppage.

Facilities

Captiva's principal offices are located in San Diego, California and
consist of approximately 30,200 square feet of office space held under a lease
that expires in January 2005. Captiva also leases approximately 8,200 square
feet of office space in Park City, Utah under a lease expiring in November 2002,
with an option to extend the lease for an additional five years, and 4,600
square feet of office space in Waltham, Massachusetts under a lease expiring in
April 2008, both of which house a portion of Captiva's professional and
technical services and software development employees.  Captiva also leases
office space for sales and professional and technical services employees in
Wokingham Berkshire, United Kingdom; Freiburg, Germany; and Toorak, Australia.
Captiva believes these offices are adequate to meet its needs for the
foreseeable future.

Legal Proceedings

Captiva is not a party to any material legal proceedings.

Captiva Management's Discussion and Analysis of Financial Conditions and
Results of Operations

Certain information in this registration statement, including the
discussion below, contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities

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Overview

Captiva is a provider of information capture software and
related services.  Captiva products are employed by over 600 customers in
insurance, financial services, government, business process outsourcing, direct
marketing as well as other markets.  Captiva's technology is used to manage
business critical information from paper, faxed and scanned forms and documents,
Internet forms and XML data streams in a more accurate, timely and cost-
effective manner.  Captiva's technology and products automate the processing of
billions of forms and documents annually, converting their contents into
information that is usable in database, document, content and other information
management systems.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the financial
statement date, as well as the reported amounts of revenues and expenses during
the reporting period.  Accordingly, actual results could differ from those
estimates.  Captiva believes that the following are some of the more critical
judgment areas in the application of Captiva's accounting policies that
currently affect Captiva's financial condition and results of operations.

Revenue Recognition. Software revenue is recognized upon meeting all
of the following criteria: execution of a written purchase commitment, license
agreement or contract; delivery of software and or authorization keys; the
license fee is fixed and determinable; collectibility of the proceeds is
assessed as being probable; and vendor-specific objective evidence of the fair
values of the elements in a multiple element arrangement exist to allocate the
total fee to elements of the arrangement.  Vendor-specific objective evidence is
based on the price charged when an element is sold separately, or if not yet
sold separately, is established by authorized management.  If vendor-specific
objective evidence of fair values of all elements in a multiple element
arrangement does not exist, but it does exist for the undelivered elements, the
residual method is used to recognize revenue related to delivered elements of a
multiple element arrangement.

Revenue is primarily derived from the sale of software licenses and
professional services.  In sales of professional services, Captiva evaluates
whether such services are essential to the overall functionality of the solution
being delivered.  When software licenses are sold with professional services and
such services are deemed essential to the functionality of the overall solution,
combined software license and service revenue is recognized using the
percentage-of-completion method of accounting, based on labor costs incurred
compared to estimates of total expected labor costs.  When software licenses are
sold with professional services and such services are not considered essential
to the functionality of the software, software license revenue is recognized
when the above criteria are met and service revenue is recognized as the
services are performed, or in the case of fixed fee service contracts, on a
percentage of completion basis.  When software licenses are sold without
services, revenue is recognized when the above criteria are met.

Service revenues include fees primarily from software maintenance agreements,
custom programming services and customer training.  Software maintenance
agreements are generally prepaid and recognized ratably over the maintenance
agreement period.  Custom programming and customer training revenues are
generally recognized as the services are performed.

Treatment of Trade Receivables. Management is required to estimate the
collectibility of trade receivables.  A considerable amount of judgment is
required in assessing the ultimate realization of these receivables including

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Valuation of Deferred Tax Assets.  In assessing the realizability of
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be realized.  The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible.  At December 31, 2001, all of the deferred tax assets were
fully reserved due to the operating losses for the past three years and the
inability to assess as more likely than not the likelihood of generating
sufficient future taxable income to realize such benefits.  In the event
management were
to determine that it would be able to realize its deferred tax
assets in the future, an adjustment to the deferred tax asset would increase
income in the period such determination was made.

Results of Operations

The following table sets forth, for the periods indicted, condensed
consolidated statement of operations information and the percentage of total
revenues represented by such information:

Consolidated Statements of Operations

`Year Ended December 31,          Three Months Ended March 31
                                                 ------------------------          ---------------------------
(Amount in Millions)                     % of           % of           % of             % of            % of
                                         Total          Total          Total            Total           Total
                                  2001  Revenue 2000   Revenue  1999  Revenue    2002  Revenue   2001  Revenue
Revenues:
Software.......................   $10.5     43% $10.2       52%  $8.3      45%    $2.6      43%   $2.4      45%
Services.......................    13.1     54    9.5       48   10.2      55      3.0      49     2.9      55
Other..........................     0.7      3       -        -      -       -     0.5       8     0.0       0
Total revenues.................    24.3    100   19.7      100   18.5     100      6.1     100     5.3     100
Cost of revenues...............     8.9     36    8.3       42    9.1      49      2.3      38     2.0      37
Gross profit...................    15.4     64   11.4       58    9.4      51      3.8      62     3.3      63

Operating Expenses:
Sales and marketing............     8.6     36   10.6       54    8.1      44      2.1      35     2.2      42
General and administrative.....     3.5     14    3.9       20    3.8      20      1.0      16     0.6      11
Software development costs.....     2.3      9    2.5       13    2.3      13      0.6      10     0.6      12
Amortization and impairment of
 goodwill and intangible assets        -          0.4        2    0.1         -               -       -       -
Total operating expenses.......    14.4     59   17.4       88   14.3      77      3.7      61     3.4      65
Income (loss) from operations..     1.0      4   (6.0)     (30)  (4.9)    (27)     0.1       1    (0.1)     (2)
Interest and other expense.....     1.4      6    1.0        5    1.2       7      0.4       6     0.4       7
Loss before provision for taxes    (0.4)    (2)  (7.0)     (35)  (6.1)    (33)    (0.3)     (5)   (0.5)     (9)`

Comparison of Three Months Ended March 31, 2002 and 2001

Total Revenues.   Total revenues for the three months ended March 31, 2002
increased $825,000, or 16%, to $6.1 million from $5.3 million in 2001.
The growth in revenues was primarily a result of increased other revenues,
primarily sales of scanners and other third party products and, to a lesser extent,
an increase in sales of software licenses.  Revenues from third party products and
software licenses for the three months ended March 31, 2002 increased $450,000
and $296,000, respectively, compared to the same period in 2001.

Software License Revenues. 
Sales of software licenses accounted for $2.6 million for the three months ended
March 31, 2002 compared to $2.4 million for the same period in 2001, an increase
of $296,000, or 13%.  Total software revenues declined slightly as a percentage of total
revenues to 43% for the first three months of 2002 from 45% for the same period in the
prior year.

Services Revenues. 
Services revenues include fees from software maintenance agreements and professional
services, including consulting, programming and customer training.  Services revenues
increased $79,000, or 3%, to

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Other Revenues.
Other revenues include sales of scanners and other peripherals and software products
purchased from third party vendors and sold by Captiva to its customers.  Other revenues
for the period ended March 31, 2002 increased $450,000 to $470,000 over the same
quarter in the previous year. The increased revenue reflects the anticipated ramp-up of
the third party hardware and software products business since the introduction of this
product line in March of 2001.

Cost of Software License Revenues.   
The cost of software license revenues consists primarily of the cost of software
products shipped with Captiva software, including royalty payments to suppliers and
authorization keys provided by third party suppliers. For the three months ended
March 31, 2002, the cost of software license revenues increased $64,000, or 54%, to $183,000
compared to $119,000 in the first three months of 2001.
The cost of software license revenues increased as a percentage of related revenues to
 7% in the first three months of 2002 compared to 5% in the same period in 2001.
The increase was attributable to an increase in royalty expense as a percentage of software
license revenues.

Cost of Services Revenues.   
For the three months ended March 31, 2002, the cost of services revenues was $1.8 million,
representing a decrease of $82,000, or 4%, when compared to the same period in the prior
year.  This decrease is primarily a result of cost controls in the professional services
group and the related cost savings as a result of lower sales in that area.

Cost of Other Revenues.   The cost of other revenues consists primarily
of the cost of the scanners and other peripherals and software products purchased from
third party vendors.  For the quarter ended March 31, 2002, the cost of third party
products was $400,000, or 85%, of related revenues.

Gross Profit.  

Gross profit is equal to total revenue less total cost of revenue.  Gross profit
increased $458,000, or 14%, to $3.8 million for the three months ended March 31, 2002
from $3.3 million in the first three months of 2001.
As a percentage of total revenues, gross profit for the three months ended March 31, 2002
of 62% was consistent with the gross profit percentage of 63% experienced in the same
period in 2001.  The gross profit increase in the first three months of 2002 was due to
the overall increase in revenues.  The gross profit percentage on services revenues
increased to 41% from 37% in the same periods due primarily to the ability of Captiva
to support the growth of maintenance revenues without significant increase
in related overhead costs.  This gross profit percentage increase in services
revenues was offset by a decrease in gross profit percentages in software to 93%
from 95% and third party products to 15% from 25% in the first three months of 2002
compared to the same period in 2001.

Sales and Marketing Expenses.  
Sales and marketing expenses consist of salaries, commissions and both direct and
indirect costs for the sales and marketing activities of Captiva, including advertising,
promotion and trade show participation costs.
For the three months ended March 31, 2002 sales and marketing expenses decreased $24,000,
or 1%, to $2.1 million when compared to the same period in 2001 and decreased as
a percentage of revenues to 35% from 41% for the same periods.
The decrease in sales and marketing expenses resulted from a combination of reduced
international costs of $163,000 offset by higher domestic selling and marketing costs
of $140,000 related to the increase in domestic revenues.

General and Administrative Expenses. 
General and administrative expenses include costs of corporate functions including
general business, accounting, human resources and information technologies.
General and administrative expenses increased $333,000, or 54%, to $1.0 million for the
three months ended March 31, 2002 compared to $622,000 in the first three months of 2001.
The increase was primarily attributable to legal and accounting costs of $288,000 incurred
in the first three months of 2002 that were directly related to the planned merger
with ActionPoint.

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Software Development Costs. 
Software development costs are comprised primarily of salaries and an allocation of
overhead costs for Captiva's in-house staff.  Software development costs, for the periods
reported, have been charged to operations as such costs are incurred.  Software development
costs of $583,000 in the first three months of 2002 were consistent with those
experienced for the same period in 2001.

Interest and Other Expense. 
Interest and other expense is primarily interest expense associated with Captiva's
bank credit facility and its subordinated debt.  Interest and other expense decreased
$29,000 to $336,000 for the three months ended March 31, 2002 compared to $365,000 for the
same period in the prior year.  The decrease was primarily attributable to a decrease
in interest paid on a variable rate bank line of credit.

Net Loss before Provision for Taxes.  
Net loss before provision for taxes decreased $188,000 to $279,000 in the first three
months of 2002 compared to $467,000 for the first three months of 2001.  The net loss
before provision for taxes as a percentage of total revenues was 5% and 9% for the three
months ended March 31, 2002 and 2001, respectively.

Comparison of Years Ended December 31, 2001 and 2000



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Software License Revenues.   Sales of software licenses accounted for
$10.5 million in 2001 compared to $10.2 million in 2000, an increase of
$311,000, or 3%.  Due primarily to the growth in service revenues, total
software revenues declined as a percentage of total revenues to 43% of total
revenues in 2001 from 52% of total revenues in 2000.

Services Revenues.   Services revenues include fees primarily from
software maintenance agreements and professional services, including consulting,
programming and customer training.  Software maintenance agreements are
generally prepaid and recognized ratably over the maintenance agreement period.
At December 31, 2001, $4.1 million of the total deferred revenue of $4.8 million
was related to software maintenance agreements.  Professional service revenues
are generally recognized as the services are performed. Services revenues
increased $3.5 million, or 37%, to $13.1 million in 2001 compared to $9.5
million in 2000.  As a percentage of total revenues, revenues in this category
increased to 54% in 2001 compared to 48% in 2000.  The increase was attributable to
an increase in revenues from professional services of $1.8 million
and an increase in software support maintenance revenues of $1.7 million related to
Captiva's growing installed customer base which
subscribes to ongoing maintenance support.  The professional services revenue
increase related directly to higher demand, a higher utilization rate of
chargeable activities by the professional staff and an increase in the daily
rate charged. As announced in 2001, effective January 1, 2003 Captiva will stop
support of three non-core products.  The recurring maintenance loss for these products
is approximately $700,000 annually.

Other Revenues.  Other revenues include sales of scanners and other
peripherals and software products purchased from third party vendors and sold by
Captiva to its customers. Captiva commenced the resale of peripherals and
software products during 2001.  Revenues in 2001 for this category were
$693,000, or 3%, of total revenues for the year. Captiva expects other revenues to
increase in 2002, which will be the first full year of sales of these products.

Cost of Software License Revenues.  The cost of software license
revenues consists primarily of the cost of software products shipped with
Captiva software, including royalty payments to suppliers and authorization keys
provided by third party suppliers.  For the year 2001, the cost of software
license revenues increased $180,000, or 28%, to $828,000 compared to $648,000 in
2000. The cost of software license revenues increased as a percentage of related
revenues to 8% in 2001 compared to 6% in 2000. The increase was primarily
attributed to an increase in royalty expense.

Cost of Services Revenues.  For the year 2001, cost of services revenues
decreased $191,000, or 2%, to $7.5 million compared to $7.7 million in
2000.  As a percentage of related revenues, cost of service revenues

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Cost of Other Revenues.  The cost of other revenues consists primarily
of the cost of the scanners and other peripherals and software products
purchased from third party vendors.  For the year 2001, the cost of third party
products was $524,000, or 76%, of related revenues.

Gross Profit.  Gross profit is equal to total revenue less total cost
of revenue. Gross profit increased $4.0 million or 35%, to $15.4 million in
2001 from $11.4 million in 2000 and increased as a percentage of total revenues
to 64% from 58%, respectively.  The increase in gross profit was due primarily
to the increase in gross profit from services of $3.7 million and, to a lesser
extent, by the increase in profit from software license and other revenues of
$300,000 in 2001 compared to 2000.

Sales and Marketing Expenses.   Sales and marketing expenses consist
of salaries, commissions and related overhead costs for the sales and marketing
activities of Captiva, including advertising, promotion and trade show
participation costs.  Sales and marketing expenses decreased $2.0 million, or 18%,
to $8.6 million in 2001 compared to $10.6 million in 2000 and decreased as a
percentage of revenues to 36% from 54% for the same periods. The decreases in
sales and marketing expenses were primarily attributable to a reduction in
international sales expenses of $891,000 and, to a lesser extent, a decrease of $538,000
related to the contraction of the domestic sales and marketing staff.
Additionally, direct marketing expenses, decreased in 2001 by $141,000 as
part of Captiva's overall cost reduction effort.  Captiva expects sales and
marketing expenses to increase as Captiva expands its sales and marketing
programs in 2002 and beyond.

General and Administrative Expenses.  General and administrative
expenses include costs of corporate functions including general business,
accounting, human resources and information technologies.  General and
administrative expenses decreased $400,000 or 10% to $3.5 million in 2001
compared to $3.9 million in 2000. The decrease was primarily attributable to non-recurring
litigation related expenses of $532,000 incurred in 2000.
As a percentage of total revenues, general and
administrative expenses decreased to 14% from 20% in 2001 and 2000,
respectively.
In 2002 and beyond, Captiva expects general
and administrative expenses to increase, but to remain a similar percentage of
revenues.

Software Development Costs.   Software development costs are comprised
primarily of salaries and an allocation of overhead costs for Captiva's in-house
staff.  In isolated cases, amounts are paid to outside consultants to supplement
the product development efforts of its in-house staff.  Software development
costs, for the periods reported, have been charged to operations as such costs
are incurred.  Software development costs decreased $283,000, or 11%, to $2.3
million in 2001 compared to $2.5 million in 2000, or 9% and 13%, respectively,
of the total revenues for 2001 and 2000.  The decrease was primarily due to
a decrease in expenses of $129,000 related to
reduced headcount in 2001 compared to 2000.

Amortization and Impairment of Goodwill and Intangible Assets.  Total
amortization and impairment of goodwill and intangible assets was $361,000 in
2000.  In 2000, management assessed the recoverability of goodwill and
intangible assets due to the continued net cash outflows from operations
experienced by Captiva.  As a result, all goodwill and intangible assets were
written off.

Interest and Other Expense.  Interest and other expense is primarily
interest expense associated with Captiva's bank credit facility and its
subordinated debt.  Interest and other expense increased $466,000 to $1.4
million in 2001 compared to $963,000 in 2000. The increase was primarily
attributable to increased amortization expense and interest expense related to
the issuance of the subordinated notes, and partially offset by a decrease in
interest paid on a variable rate bank line of credit. The amortization of the
subordinate debt discount and debt issue costs in 2001 increased $446,000
compared to 2000 reflecting a full year of amortization in 2001 compared to 5
months in 2000.

Net Loss before Provision for Taxes.  Net loss before provision for
taxes decreased $6.6 million to $422,000 in 2001 compared to $7.0 million in
2000.  The net loss before provision for taxes as a percentage of total revenues
was 2% and 35% in 2001 and 2000, respectively.

129

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Comparison of Years Ended December 31, 2000 and 1999

Software License Revenues.   Software license fees accounted for $10.2
million, or 52%, of the total revenues in 2000, up from $8.3 million or 45% of
total revenues in 1999.  This represents an increase of $1.9 million, or 22%.
This growth is primarily attributable to an increase in
international software license revenues in 2000 compared to 1999.

Services Revenues.  Revenues from services decreased $616,000, or 6%,
to $9.5 million in 2000 as compared to $10.2 million in 1999.  As a percentage
of total revenues, services decreased to 48% in 2000 from 55% in 1999. The
decrease was reflective of a reduction in revenues from professional services contracts
of $1.2 million in 2000 compared to 1999 related to
the elimination of a product line that required a significant amount of
professional services and offset by an increase in revenue from software maintenance
agreements of $548,000.

Cost of Software License Revenues.  For the year 2000, the cost of
software license revenues decreased $25,000 to $648,000 compared to $673,000 in
1999.  As a percentage of software license revenues, cost of software licenses
decreased from 8% in 1999 to 6% in 2000.  The decrease was directly related to
the write off of pre-paid royalties and inventories related to discontinued
products in 1999.

Cost of  Services Revenues.  For the year 2000, cost of maintenance
and other services decreased $787,000, or 9%, to $7.7 million as compared to
$8.5 million in 1999.  As a percentage of related revenues, cost of maintenance
and other services was 80% and 83%, respectively, in 2000 and 1999.  The
decrease was primarily attributable to a reduction in headcount in Captiva's
professional and technical services organizations.

Gross Profit.  Gross profit increased $2.0 million, or 22%, to $11.4
million in 2000 from $9.4 million in 1999 and increased as a percentage of total
revenues to 58% from 51%, respectively, in 2000 and 1999.  These operating
improvements were due primarily to the increase in higher margin software
license revenues.
Software license revenues were 52% of total revenues in 2000 compared to 45% in 1999
as a percentage of total revenues and an overall reduction in
service costs.

Sales and Marketing Expenses.  Sales and marketing expenses increased
$2.5 million, or 31%, to $10.6 million in 2000 compared to $8.1 million in 1999
and increased as a percentage of revenues to 54% from 44% for the same period.
The increases in sales and marketing expenses were primarily attributable to
the growth of Captiva's international operations in 2000.  International
selling expenses increased $2.0 million primarily due to the addition of sales headcount.
International marketing expenses increased $400,000 primarily related to increase in staff
and in direct marketing expenses.

General and Administrative Expenses.  General and administrative
expenses increased $92,000, or 2.0%, to $3.9 million in 2000 as compared to $3.8
million in 1999. As a percentage of total revenues, general and administrative
expenses remained at 20% for 2000 and 1999.  The increase was primarily
attributable to Captiva's expansion internationally in 2000, which included the set-up,
business development and infrastructure cost for subsidiaries in the United
Kingdom, Germany and Australia of approximately $176,000.

Software Development Costs.  Software development costs increased
$248,000, or 11%, to $2.5 million in 2000 compared to $2.3 million in 1999.  As
a percentage of total revenues, software development expenses remained at 13%
for 2000 and 1999.  The increase was due primarily to the initial translation of
Captiva's software and documentation for its German subsidiary.

Amortization and Impairment of Goodwill and Intangible Assets.
Amortization and impairment of goodwill and intangible assets increased
$289,000 to $361,000 in 2000 compared to $72,000 in 1999.  The 1999 amortization
represents the annual amortization of goodwill from a prior acquisition.  In
2000, management assessed the recoverability of goodwill and intangible assets
due to the continued net cash outflows experienced by Captiva.  As a result, all
goodwill and intangible assets were written off at that time.

130

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Interest and Other Expense.  Interest and other expense decreased
$259,000 to $963,000 in 2000 compared to $1.2 million in 1999.  The decrease was
primarily attributable to modifications related to the subordinated debt that
resulted in the reversal of interest expense.

Net Loss before Provision for Taxes.  Net loss before provision for
taxes increased $825,000 to $7.0 million in 2000 compared to $6.1 million in
1999. The net loss before provision for taxes as a percentage of total revenues
was 35% and 33% in 2000 and 1999, respectively.

Liquidity and Capital Resources

As of March 31, 2002, Captiva had approximately $838,000 in cash and cash equivalents
and $2.3 million outstanding under its line of credit.  As of March 31, 2002, Captiva
had a working capital deficiency of $14.0 million.  Cash decreased from December 31, 2001
by  $223,000.

As of December 31, 2001, Captiva had approximately $1.1 million in
cash and cash equivalents, an increase of $495,000, or 87%, from
December 31, 2000, and $2.5 million outstanding under its line of credit.
Captiva is restricted in its ability to procure further advances under the line
of credit.

Captiva had working capital deficiencies of $13.6 million and $3.4 million as
of December 31, 2001 and December 31, 2000, respectively.  The decrease in
working capital of $10.2 million was primarily attributable to the
reclassification in 2001 of long-term debt to current debt. The outstanding
balances on Captiva's credit line and subordinate notes of $2.5 million and $7.9
million, respectively, become due in 2002 and are shown as current obligations
as of December 31, 2001.  These circumstances raise substantial doubt about
Captiva's ability to continue as a going concern.  Captiva's independent
accountants have included an explanatory paragraph regarding this matter in
their report on the consolidated financial statements at December 31, 2001 and
for the years then ended.

Should Captiva fail to complete the merger with ActionPoint, management plans
to seek to extend the maturity dates of the bank line of credit and subordinated
notes or arrange for alternative sources of funding through additional equity
capital, new debt financing or another merger or sale of Captiva.  In the past,
Captiva has obtained private debt and equity capital and has negotiated
amendments to the terms of its credit facility in 2001 and the subordinated
notes in 2000.  There can be no assurance, however, that management will be
successful in its attempts to refinance or amend the terms of Captiva's existing
debt, obtain new debt financing, raise additional equity capital or complete a
merger or sale of Captiva, in which case Captiva will be unable to meet its
obligations under its existing contractual obligations.  Failure by Captiva to
pay the entire principal amount plus accrued but unpaid interest as of the
maturity date would constitute a default under the line of credit and the
subordinated notes.

In the first quarter of 2002, Captiva's operating activities used $9,000.
This included $344,000 of non-cash charges offset by $279,000 net loss and  $74,000
change in working capital.  The major changes in working capital were a reduction in
accounts receivable of $841,000 and pay down of accounts payable by $410,000.  In
addition, Captiva used $40,000 in the quarter for the purchase of computer and telecom
equipment and $157,000 to pay down the bank line of credit and capital leases.

During 2001, Captiva's operating activities provided $1.1 million of cash.  This included
$1.6 million of non-cash expenses offset by $422,000 of net loss and $137,000 used for
working capital purposes.  The most significant changes in working capital were a reduction
 of accounts payable and accrued expenses of  $1.2 million.  Of this amount, $1.0 million
related to the reduction of payables to vendors to bring Captiva's accounts more current.
This use of cash was offset by a $1.0 million increase in deferred revenues.
 The deferred revenue increase reflects the higher volume of prepaid support
contracts in effect in 2001 versus 2000.
Cash used in investing activities amounted to $129,000  and
represented purchases of computer equipment and software.
Financing activities required $468,000 of capital in 2001, representing cash used to
pay down Captiva's bank line of credit
obligation.

During 2000, Captiva's operating activities used  $4.1 million of cash.  This included
a net loss of $7.0 million offset by $2.0 million of non-cash expenses and $948,000
of benefits from working capital changes.  The most significant change in working capital
was the $2.6 million decrease in accounts receivable offset by an increase of $1.3 million
in accounts payable and other accrued expenses and $1.7 million increase in deferred revenue.
The accounts receivable decrease resulted from a more focused collection effort.
The accounts payable and accrued

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Summary of Contractual Obligations and Commercial
Commitments

`Payments due by Period
Contractual Obligations                    ----------------------
                                           less than
(Amounts in Thousands)          Total        1 Year   1-3 Years  4-5 years
----------------------          ---------  ---------  ---------  --------- 
Long-term debt................    $8,088     $8,088        -          -
Operating leases..............     3,942      1,358      2,427        157
Other long-term obligations*..       290        142        148        -
                                ---------  ---------  ---------  ---------
Total                             12,320      9,588      2,575        157`

* These amounts relate primarily to legal settlements being paid
by Captiva over time based on product sales.  Management expects these amounts
to be paid as follows:  $142,000 in 2002 and $148,000 in 2003.  For additional
information see Note 12 to the consolidated financial statements of
Captiva.

`Payments due by Period
Commercial Commitments                     ----------------------
                                          less than
(Amounts in Thousands)          Total       1 Year   1-3 Years  4-5 years
                                ---------  ---------  ---------  --------- 
Line of Credit................     2,495      2,495        -          -`

At December 31, 2001, Captiva had approximately $14.8 million of outstanding
contractual obligations and commercial commitments.  Captiva's contractual
obligations as of December 31, 2001 consisted primarily of subordinated notes
and obligations under operating leases for facilities and equipment. At December
31, 2001, Captiva had outstanding subordinated notes with a principal amount of
$8,087,877 maturing on March 29, 2002. Future minimum payments under non-
cancelable operating leases are $1.4 million, $1.1 million, $1.0 million and
$245,000 for the years 2002, 2003, 2004 and 2005, respectively, and $157,000 for
years 2006 and beyond.  In addition, at December 31, 2001, Captiva had
$2,495,000 outstanding under a bank line of credit maturing on June 30, 2002.

As of March 31, 2002, holders of 50.5% of the aggregate principal amount of
Captiva's amended and restated senior subordinated notes, or senior notes, have
agreed to amend the outstanding senior notes and the holders of 46.9% of the
aggregate principal amount of Captiva's subordinated secured convertible notes,
or convertible notes, have agreed to amend the outstanding convertible notes,
contingent upon the completion of Captiva's merger with ActionPoint.  The
amendment will extend the maturity of any remaining promissory notes outstanding
after the merger with ActionPoint until March 29, 2007.  In addition,
holders of promissory notes representing an aggregate of $3.9 million principal
amount have executed agreements with Captiva to convert those notes into shares
of Captiva's common stock immediately prior to the merger with ActionPoint.
Based on the outstanding shares of Captiva capital stock and warrants and
options to acquire Captiva common stock on March 31, 2002, each $1,000 principal
amount of the promissory notes and related interest will be converted into
approximately 26,662 shares of Captiva common stock.  The exact conversion price
cannot be determined at this time because interest continues to accrue under the
promissory notes, and the capitalization of Captiva may change prior to the
merger.  Captiva expects all the subordinated notes to convert in connection
with the merger with ActionPoint and therefore to have no principal amount of
promissory notes outstanding and due on March 29, 2007.

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Factors That May Affect Captiva's Business, Financial Condition and
Future Results

This registration statement, including this Management's Discussion
and Analysis of Financial Condition and Results of Operations, contains forward-
looking statements and other prospective information.  These forward-looking
statements and other information involve numerous risks and uncertainties, many
of which are beyond Captiva's control and could cause Captiva's actual results
to differ materially from its historical results or currently anticipated
results.  The following discussion highlights some of those risks and
uncertainties.

Captiva's operating results may fluctuate from year to year or over shorter
periods due to broad economic factors or changes in its customers' buying
habits, making future results difficult to predict.

Captiva's results depend to a substantial degree on the success of relatively
few software products and the introduction of new products that are accepted in
the marketplace.  If Captiva's products do not continue to be accepted by its
customers or if Captiva is not able to introduce new products that are
competitive with products offered by other companies, Captiva's future results
of operations could be impacted negatively.

The software industry is characterized by rapid technological changes that
may adversely effect the demand for Captiva's products.  Any decline in demand
would effect Captiva's results of operations

Changes in political, societal and economic conditions and local regulations
in various geographic areas where Captiva does business may impact future sales,
expenses and results of operations.

Growth rates in the software and professional services markets in which
Captiva participates may decline.

Captiva may not be able to meet its short-term financial obligations, and may
not be able to continue as a going concern.

Captiva may not have access in the future to debt or equity capital to
finance future growth or ongoing operations.

Director Remuneration

Non-employee directors are not paid for being board members but are
reimbursed for all out-of-pocket costs incurred in connection with their
attendance at board and committee meetings.

Under Captiva's stock plan, an individual who is a non-employee director is
eligible to receive options to purchase Captiva common stock.  On August 2,
2001, Jordan Libit, a director, was granted non-qualified stock options to
purchase 150,000 shares of Captiva common stock under the stock plan.  There
were no additional grants made to directors in 2001.

No other compensation is paid to Captiva's non-employee directors for their
services on the board.

Executive Compensation and Related Information for Captiva's Executive
Officers

The following table sets forth the compensation earned for services
rendered in all capacities to Captiva and its subsidiaries for the fiscal years
ended December 31, 2001, December 31, 2000 and December 31, 1999 by the chief
executive officer and three other executive officers of Captiva, who are all
hereinafter referred to as Captiva's named executive officers.  Each of the
named executive officers will continue as executive officers of the combined
company after the merger.

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SUMMARY COMPENSATION TABLE

`Long Term
                                                             Compensation
                                 Annual Compensation Awards
                                 --------------------------  ---------     All
                                                             Securities   Other
                                   Fiscal  Salary    Bonus   Underlying Compensation
Name and Principal Position         Year   ($)(1)      ($)   Options(#)   ($)(2)
------------------------------   ------- --------- --------  ---------  ---------
Reynolds C. Bish..............     2001   178,181   56,280          0      1,604
  Chairman, President, Chief       2000   172,949        0    850,000      1,536
  Executive Officer                1999   165,429   25,600          0        853

Rick Russo....................     2001   174,577   23,477          0      1,407
  Chief Financial Officer,         2000   104,615        0    700,000        393
  and Secretary                    1999     N/A      N/A            0          0

Steve Burton..................     2001   134,986   23,638          0        686
  Chief Technology Officer         2000   131,026        0    500,000        655
                                   1999   125,427   34,000          0        499

Blaine Owens..................     2001   147,208   57,062    600,000      2,310
  Vice President, Worldwide Sales  2000    83,200   62,231          0      1,904
                                   1999    44,308    8,396          0        670`

______________________________

1. Includes salary deferred under Captiva's 401(k) plan.
2. Consists of premiums paid to term life insurance and matching contribution
to Captiva's 401(k) plan.

Stock Options

The following table contains information concerning the grant of stock
options made under Captiva's stock plan for the 2001 fiscal year to Captiva's
named executive officers who will continue as executive officers of the combined
company.

OPTION GRANTS IN LAST FISCAL YEAR

`Individual Grants
                            --------------------------------------------
                                           % of
                                          Total                              Potential Realizable
                            Number of    Options                              Value at Assumed
                            Securities   Granted    Exercise                Annual Rates of Stock
                            Underlying      to        Price                Price Appreciation for
                             Options    Employees      per      Expir-         Option Term
                             Granted    in Fiscal     share      ation    --------------------
Name                             (#)        Year      ($/sh)       Date      5% ($)    10% ($)
--------------------------  ---------   ---------   ---------  ---------  ---------  ---------
Reynolds C. Bish..........         0         0.0%      N/A        N/A            0          0

Rick Russo................         0         0.0%      N/A        N/A            0          0

Steve D. Burton...........         0         0.0%      N/A        N/A            0          0

Blaine J. Owens...........   600,000        59.0%       0.22   02/08/11     83,160    209,880`

Option Exercises and Holdings

The following table provides information with respect to the named
executive officers of Captiva who will continue as executive officers of the
combined company concerning the exercise of options during the 2001 fiscal year
and unexercised options held as of December 31, 2001.

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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

`Number of Securities
                                                      Underlying Unexercised    Value of Unexercised
                              Shares                    Options at Fiscal      In-the-Money Options at
                             Acquired                    Year-End(#)            Fiscal Year-End($)
                                on         Value     -----------------------  --------------------
                             Exercise    Realized      Exercis-    Unexercis- Exercis-   Unexercis-
Name                             (#)         ($)         able        able       able       able
---------------------------- ---------   ---------   ------------  ---------  ---------  ---------
Reynolds C. Bish............        0           0      1,080,208    619,792    119,000          0

Rick Russo..................        0           0        277,083    422,917          0          0

Steve D. Burton.............        0           0        985,417    364,583    119,000          0

Blaine J. Owens.............        0           0        168,750    461,250          0          0`

Change in Control Arrangements and Employment Contracts

Under Captiva's stock plan, outstanding options will become immediately
exercisable in full in the event of certain changes in the ownership or control
of Captiva.  The merger of Captiva and ActionPoint will constitute a change in
control under the stock plan.  On January 28, 2002 the board of directors
adopted resolutions which provide that all options issued under the stock plan
will become fully vested upon consummation of the merger.

Captiva has employment letter agreements with each of Reynolds C. Bish, Rick
Russo and Blaine Owens.  Each letter agreement sets forth the employee's
position, compensation and eligibility to participate in the benefit plans of
Captiva.  Under the terms of the letter agreements, Messrs. Bish, Russo and
Owens are at will employees and each is entitled to severance benefits in the
event his employment with Captiva is terminated without cause.

In the event that Mr. Bish's employment with Captiva is terminated without
cause, as defined in the offer letter, Mr. Bish is entitled to 6 months of his
base salary plus any bonuses earned in accordance with the terms of Captiva's
bonus plan during such 6 month severance period.

In the event of certain changes in the ownership or control of Captiva, the
vesting of Mr. Owens' incentive stock options will accelerate so that at least
300,000 incentive stock options become vested and immediately exercisable.  If
in conjunction with certain changes in the ownership or control of Captiva Mr.
Owens is terminated without cause, all outstanding options held by him that were
granted under the employment letter agreement will become immediately
exercisable in full and unvested shares will become fully vested.

Reynolds Bish, the chief executive officer of Captiva, and Rick Russo, the
chief financial officer of Captiva, will become the chief executive officer and
chief financial officer, respectively, of the combined company following the
merger.  For more information on the employment offer letters offered by
ActionPoint to Messrs. Bish and Russo, see "Other Agreements-Employment
Offer Letters" on page 86.

Captiva's Related-Party Transactions

Conversion of Promissory Notes Issued by Captiva.  Mel Lavitt, a
Captiva director and stockholder, is Vice Chairman and Managing Director of C.E.
Unterberg, Towbin which agreed to convert $2,560,000 principal amount of Captiva
promissory notes, either owned or beneficially owned by C.E. Unterberg, Towbin
and its affiliates into shares of Captiva common stock contingent upon the
occurrence of and effective immediately prior to the merger.  Also, Mr. Lavitt
has agreed to convert $100,000 of Captiva's promissory notes directly or
beneficially owned by him into shares of Captiva common stock contingent upon
the occurrence of and effective immediately prior to the merger.

James Berglund, a Captiva director, is also a general partner of Enterprise
Partners Venture Capital which agreed to convert $1,069,726 of Captiva's
promissory notes either owned or beneficially owned by Enterprise Partners
Venture Capital and its affiliates into shares of Captiva common stock
contingent upon the occurrence of and effective immediately prior to the
merger.

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Shirley Cerrudo, a director of Captiva, is a general partner of Novus
Ventures, which has agreed to convert $356,575 of Captiva's promissory notes
directly or beneficially owned by Novus Ventures and its affiliates into shares
of Captiva common stock contingent upon the occurrence of and effective
immediately prior to the merger.

Affiliations with Financial Advisors.  Mel Lavitt, a Captiva director
and stockholder, is Vice Chairman and Managing Director of C.E. Unterberg,
Towbin which has provided financial advisory and investment banking services to
Captiva related to the merger pursuant to an engagement letter dated as of
December 11, 2001 between Captiva and C.E. Unterberg, Towbin.  Captiva will pay
C.E. Unterberg, Towbin $350,000 for advisory and investment banking services
rendered pursuant to this agreement if the merger is completed.

Voting Securities

Common & Preferred Stock.  The authorized capital stock of
Captiva consists of 70,000,000 shares of common stock, 2,873,564 shares of
Series A preferred stock, 1,115,000 shares of Series B preferred stock,
4,500,000 shares of  Series C preferred stock, 1,000,000 shares of  Series D
preferred stock and  29,000,000 shares of Series E preferred stock.  As of March
31, 2002, Captiva had issued and outstanding 23,760,060 shares of common stock,
2,515,587 shares of Series A preferred stock, 875,424 shares of Series B
preferred stock, 2,188,553 shares of Series C preferred stock, 769,231 shares of
Series D preferred stock, and 15,444,160 shares of Series E preferred stock, all
of which are duly authorized, validly issued, fully paid and nonassessable.
Each share of Captiva's Series A preferred stock, Series B preferred stock and
Series C preferred stock is convertible into 1.321118 shares of Captiva's common
stock and each share of Captiva's Series D preferred stock and Series E
preferred stock is convertible into one share of Captiva's common stock.

As of March 31, 2002, there were 47,344,714 shares of Captiva common stock
outstanding that were held of record by approximately 354 stockholders, after
giving effect to the conversion of all outstanding shares of preferred stock
into 23,584,654 shares of common stock.

Vote Required.
The affirmative vote of the holders of at least a majority of the
outstanding shares of Captiva common stock voting separately as a single class
and the affirmative vote of the holders of at least a majority of the
outstanding shares of each series of Captiva preferred stock, each voting
separately as a single series, will be necessary to approve the merger, the
principal terms of the merger agreement and the amendment and restatement of
Captiva's articles of incorporation.  The affirmative vote of the holders of at
least a majority of the outstanding shares of Captiva preferred stock, voting
together as a single series, will be necessary to approve the conversion of all
the shares of Captiva preferred stock into shares of Captiva common stock.  The
votes described above are the only votes of holders of any class or series of
the capital stock of Captiva necessary for Captiva to effect the merger.  If the
merger is approved, ActionPoint has agreed that Messrs. Finegan, Tompkins and
van Overbeek will resign and their successors, Messrs. Reynolds, Lavitt and
Berglund, each of whom is currently a member of Captiva's board of directors,
will be elected by the ActionPoint board of directors prior to the merger.
Therefore, no vote of Captiva stockholders will be required to elect the new
ActionPoint directors.

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INFORMATION CONCERNING THE COMBINED COMPANY

Management of the Combined Company after the Merger

The following table sets forth certain information regarding the
directors and executive officers of the combined company after the
merger:

`Name                 Age         Position
------------------   ---------   -----------------------------------
Kimra D. Hawley            45    Chairman of the Board of Directors

Reynolds C. Bish           49    President, Chief Executive Officer
                                 and Director

Stephen S. Francis         40    Chief Operating Officer
                                 and Director

John Finegan               52    Executive Vice President of Finance

Rick Russo                 51    Chief Financial Officer

Steven D. Burton           42    Chief Technology Officer

Blaine Owens               40    Vice President, Worldwide Sales

Jim Vickers                42    Vice President, Business Development

Jim Berglund               69    Director

Patrick Edsell             53    Director

Mel S. Lavitt              64    Director

Bruce Silver               53    Director`

Kimra D. Hawley.

Reynolds C. Bish.  Mr. Bish will become President, Chief Executive
Officer and a director of the combined company following the merger.  Mr. Bish
has served as Captiva's President, Chief Executive Officer and chairman of the
Captiva board of directors since co-founding the company in 1989.  From 1986 to
1989, Mr. Bish served as President, Chief Executive Officer and a director of
Unibase Systems, Inc.  Prior to Unibase, Mr. Bish spent three years as Vice
President of Finance and Chief Financial Officer at Covalent Systems
Corporation, which he co-founded, six years as Vice President of Finance and
Chief Financial Officer at Fafco, Inc. and three years as a Certified Public
Accountant at Price Waterhouse.  Mr. Bish is Chairman of the board of directors
of the Association for Information and Image Management International and The
Association for Work Process Improvement, two industry associations.  Mr. Bish
holds a  B.S. in Business Administration from Pennsylvania State University.

Stephen S. Francis.  Mr. Francis has served as President and Chief
Executive Officer of ActionPoint and as a member of the board of directors since
June 2001.  After completion of the merger, he will become the Chief Operating
Officer of the combined company.  Prior to his election as President and Chief
Executive Officer, Mr. Francis had served as Vice President of Business
Development since 1999.  From 1997 to 1999, he served as General Manager of
ActionPoint's Pixel Division.  Mr. Francis joined ActionPoint in June 1994 when
the company he founded, Pixel Translations, was acquired by ActionPoint.  Prior
to joining Pixel Translations, Mr. Francis held engineering and marketing
management roles at Calera, now part of ScanSoft Corporation, a developer of
recognition software. Mr. Francis holds a B.S. in Electrical
Engineering/Computers from Stanford University.

John Finegan.  Mr. Finegan has served as ActionPoint's Chief Financial
Officer since July 1990, as Secretary since June 1993 and as a director since
June 1997.  He will become the Executive Vice President of Finance of the
combined company following the merger.  He joined ActionPoint in July 1989.
From September 1988 until he

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Rick Russo	. Mr. Russo will become the Chief Financial Officer and
Secretary of the combined company following the merger.  Mr. Russo joined
Captiva in 2000 as Chief Financial Officer.  Mr. Russo was previously Vice
President of Finance at Epicor Software Corporation (formerly Data Works, an ERP
software company) from 1992 through 2000.  From 1982 to 1991, Mr. Russo was Vice
President of Finance for Media Duplication Services Ltd., a wholly-owned
subsidiary of Polaroid Corporation that provides software manufacturing
services, and was Controller for Media Systems Technology, Inc., a manufacturer
of disk duplication hardware.  Mr. Russo is a Certified Public Accountant and
holds a B.S. in Accounting from Syracuse University.

Steven D. Burton. Mr. Burton will become the Chief Technology Officer
of the combined company following the merger.  Since 2001 Mr. Burton has served
as the Chief Technology Officer for Captiva, after serving as Vice President of
Software Development for Captiva since co-founding the company in 1989.  From
1983 through 1989 Mr. Burton was with Unibase, where he was part of the original
programming staff and eventually managed the overall product development
effort.

Blaine J. Owens. Mr. Owens will become the Vice President of Worldwide
Sales of the combined company following the merger.  Since January 2001, Mr.
Owens has served as Vice President of Sales for Captiva.  From 1998 to 2001, Mr.
Owens served as Captiva's Director of Business Development.  Prior to joining
Captiva, Mr. Owens served in a variety of technical, marketing and sales
management positions with BancTec, Inc. and Recognition Equipment International.
Mr. Owens holds a B.S. in Computer Science from Ohio Wesleyan University.

James Vickers.  Mr. Vickers has served as Vice President of Sales
since joining ActionPoint in December 2001.  Following the merger Mr. Vickers
will become the Vice President of Business Development of the combined company.
Prior to joining ActionPoint, Mr. Vickers served as Executive Vice President for
Sales and Marketing at TR Systems, a provider of software solutions for digital
document communications.  From 1995 to 2000, Mr. Vickers served in a variety of
senior sales positions for Electronics for Imaging. Mr. Vickers holds a B.S. in
Business Administration from California State University at Long Beach.

James Berglund.  Mr. Berglund will become a director of the combined
company following the merger.  Mr. Berglund has been a member of Captiva's board
of directors since October of 1994.  He has been a general partner of Enterprise
Partners Venture Capital since 1985.  From 1978 to 1981, he served as President
of Continuous Curve Contact Lenses, Inc.  For 7 years Mr. Berglund was a Trustee
of Scripps Clinic and Research Foundation.  Mr. Berglund is a director of eight
companies and the general partner of six different venture capital partnerships.
Mr. Berglund holds a B.S. in Economics from University of Wisconsin at Madison
and a Doctorate in Optometry from Pacific University.

Patrick Edsell.  Mr. Edsell has served on the board of directors since
August 2001.  Since 2002, Mr. Edsell has served as President and Chief Executive
Officer of Gigabit Optics, a privately held supplier of components for optical
networks.  From 1997 to 2002, Mr. Edsell was President and Chief Executive
Officer for Spectra-Physics, a supplier of laser and optics products.  Mr.
Edsell holds B.S. in Economics from the United States Air Force Academy, a M.A.
in Economics from Ohio State University and a M.B.A. from the University of New
Mexico.

Mel S. Lavitt.  Mr. Lavitt will become a director of the combined
company following the merger.  Mr. Lavitt has been a member of Captiva's board
of directors since August 2000.  Mr. Lavitt has been Managing Director at the
investment banking firm of C.E. Unterberg, Towbin (or its predecessor) since
1992 and is currently serving as Vice Chairman and Managing Director.  From 1987
to 1992, he was President of Lavitt Management, Inc., a business consulting
firm.  From 1978 until 1987, Mr. Lavitt served as an Administrative Managing
Director for the investment banking firm of L.F. Rothschild, Unterberg, Towbin,
Inc.  Mr. Lavitt is also a director of Jabil Circuit, Inc. and St. Bernard
Software.  Mr. Lavitt holds a bachelors degree from Brown University.

138

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Bruce Silver.  Mr. Silver has served on ActionPoint's board of
directors since July 1995.  Since October 1994, Mr. Silver has also been a
principal of Bruce Silver Associates, an e-business consulting firm that he
founded in 1994.  From May 1990 to October 1994, Mr. Silver was a vice president
of BIS Strategic Decisions.

Management and Employee Integration after the Merger

The merger of ActionPoint and Captiva will be followed by a period of
integration and transition.  This process may result in the loss of members of
the management team of the combined company.  Any changes in the management team of the
combined company prior to the time when ActionPoint's and Captiva's businesses are fully
integrated could make it significantly more difficult to integrate the critical
functions of these two businesses as will be needed to create a combined company
that can compete effectively against other information capture software
providers.

Additionally, as a result of efficiencies expected to be realized, elimination of
redundancies and the desire to relocate certain functions to the combined company's
planned headquarters in San Diego, approximately 15 positions will be eliminated within
a short period after the closing of the merger, the majority of which are currently held
by ActionPoint employees, including John Stetak, ActionPoint's vice president of marketing.
These reductions will be made primarily in the finance, administrative and marketing
departments.

Also, as a result of the merger, each of ActionPoint's executive officers,
Stephen Francis, John Finegan, James Vickers, David Sharp and
Matthew Albanese, may be, and John Stetak will be, entitled to significant severance
benefits if they resign or if their employment is terminated under certain circumstances after
the merger.  Mr. Francis may be entitled to resign and collect severance
payments as soon as one month after the merger and the other executive officers
may be entitled to resign and collect severance payments as soon as three months
following the merger, if they have suffered a material reduction in their
authority or responsibility.  See "Other Agreements-Severance
Agreements" on page 87.  In addition, Reynolds Bish, Rick Russo, Steven
Burton and Blaine Owens are employees at will and may terminate their employment
at any time.  For details regarding employment agreements between ActionPoint
and Messrs. Bish and Russo, see "Other Agreements-Employment Offer
Letters" on page 86.

Equity Compensation Plans of the Combined Company

In the merger, ActionPoint will assume all of the outstanding options and
warrants to purchase Captiva common stock.  Captiva's 2002 equity incentive plan
and stock plan will not be assumed and ActionPoint's equity compensation plans
will remain unchanged except for the proposed amendment and restatement of
ActionPoint's employee stock purchase plan.

139

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION

The following unaudited pro forma condensed combined financial statements
have been prepared to give effect to the proposed merger of ActionPoint and
Captiva using the purchase method of accounting and the assumptions and
adjustments described herein.  These pro forma statements were prepared as if
the merger had been completed as of January 1, 2001 for statement of operations
purposes and as of March 31, 2002 for balance sheet purposes.  In accordance
with Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets", goodwill is an indefinite lived asset and will therefore not
be amortized but will be tested for impairment at least annually.  Accordingly,
the accompanying pro forma financial statements do not reflect any amortization
of goodwill.

The unaudited pro forma condensed combined financial statements are presented
for illustrative purposes only and are not necessarily indicative of the
financial position or results of operations that would have actually been
reported had the merger occurred January 1, 2001 for statement of operations
purposes and as of March 31, 2002 for balance sheet purposes, nor is it
necessarily indicative of the future financial position or results of
operations. The pro forma condensed combined financial statements include
adjustments, which are based upon management's preliminary estimates, to reflect
the allocation of purchase price to the acquired assets and assumed liabilities
of Captiva, before any integration adjustments.  The final allocation of the
purchase price will be determined after the completion of the merger and will be
based upon actual net tangible and intangible assets acquired as well as
liabilities assumed.  Because the unaudited pro forma condensed combined
financial statements are based upon preliminary estimates, the pro forma
adjustments may differ materially based upon the final allocation.

These unaudited pro forma condensed combined financial statements are based
upon the respective historical consolidated financial statements of ActionPoint
and Captiva and should be read in conjunction with the historical consolidated
financial statements of ActionPoint and Captiva and related notes and
"Captiva Management's Discussion and Analysis of Financial Conditions and
Results of Operations" on page 124 and, for ActionPoint, in the reports and
other information ActionPoint has on file with the Securities and Exchange
Commission.

140

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Unaudited Pro Forma Condensed Combined Balance Sheet
 
as of March 31, 2002
 
(In thousands)

`Historical             Pro Forma
                                                ---------------------- ---------------------------
                                                ActionPoint    Captiva  Adjustments       Combined
                                                ----------- ---------- ------------    -----------
                                                                                       
ASSETS
Cash and cash equivalents......................     $8,028       $838                      $8,866
Accounts receivable, net.......................      4,007      5,109                       9,116
Other current assets...........................      1,032        155                       1,187
                                                ----------- ---------- ------------    -----------
  Total current assets.........................     13,067      6,102            0         19,169

Property and equipment, net....................        682        489                       1,171
Goodwill and other intangible assets...........                             18,202 (a)     18,202
Other assets...................................        315        254                         569
                                                ----------- ---------- ------------    -----------
                                                   $14,064     $6,845      $18,202        $39,111
                                                =========== ========== ============    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable...............................       $367     $2,015                      $2,382
Bank debt......................................                 2,345                       2,345
Current portion of subordinated notes..........                 8,088       (6,066)(d)      2,022
Deferred revenue...............................      3,175      4,467         (223)(c)      7,419
Accrued liabilities............................      1,372      3,161        1,875 (b)      6,108
                                                                              (300)(d)
                                                ----------- ---------- ------------    -----------
  Total current liabilities                          4,914     20,076       (4,714)        20,276

Long term deferred revenue.....................        837                                    837
Other long term liabilities....................        139        118                         257
                                                ----------- ---------- ------------    -----------
  Total liabilities............................      5,890     20,194       (4,714)        21,370

Mandatorily redeemable convertible
preferred stock................................                 8,397       (8,397)(f)          0

Stockholders' equity:
Common stock...................................         44      1,833       (1,833)(f)         79
                                                                                35 (g)

 Paid-in capital...............................     10,130                   8,275 (g)     20,662
                                                                             2,257 (g)

Accumulated deficit............................     (2,000)   (23,579)      23,579 (f)     (3,000)
                                                                            (1,000)(i)
                                                ----------- ---------- ------------    -----------
Stockholders' equity...........................      8,174    (21,746)      31,313         17,741
                                                ----------- ---------- ------------    -----------
  Total liabilities and stockholder's equity...    $14,064     $6,845      $18,202        $39,111
                                                =========== ========== ============    ===========`

141

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Unaudited Pro Forma Condensed Combined Statement of Operations for
 
the Three Months Ended March 31, 2002
 
(In thousands, except per share amounts)

`Historical                 Pro forma
                                                ---------------------- ---------------------------
                                                ActionPoint  Captiva   Adjustments      Combined
                                                ----------- ---------- ------------    -----------
                                                                                       
Net revenues
  License......................................     $3,797     $2,638                      $6,435
  Service......................................      1,995      3,462                       5,457
                                                ----------- ---------- ------------    -----------
Total revenues.................................      5,792      6,100                     $11,892
                                                ----------- ---------- ------------    -----------
Cost of revenues
  License......................................        218        183          588 (h)        989
  Service.......................................       692      2,158           50 (h)      2,900
                                                ----------- ---------- ------------    -----------
Total cost of revenues.........................        910      2,341          638          3,889
                                                ----------- ---------- ------------    -----------

Gross profit...................................      4,882      3,759         (638)         8,003
                                                ----------- ---------- ------------    -----------
Research and development.......................      1,241        583                       1,824
Sales and marketing............................      2,996      2,164                       5,160
General and administrative......................       641        955                       1,596
                                                ----------- ---------- ------------    -----------
Operating profit (loss)........................          4         57         (638)          (577)

Interest and other income (expense)............         13       (336)         280 (d)        (43)
                                                ----------- ---------- ------------    -----------
Income (loss) before provision for
 income taxes..................................         17       (279)        (357)          (619)
                                                ----------- ---------- ------------    -----------
Provision (benefit) for income taxes...........                                                 0

Net income (loss)..............................        $17      ($279)       ($357)          (619)
                                                =========== ========== ============    ===========
Basic and diluted EPS:
 Net loss.......................................     $0.00                                 ($0.08)
                                                ===========                            ===========
Shares used in basic and diluted
   EPS calculations.............................     4,375                   3,492          7,867
                                                ===========            ============    ===========`

142

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Unaudited Pro Forma Condensed Combined Statement of Operations for
 
the Year Ended December 31, 2001
 
(In thousands, except per share amounts)

`Historical                 Pro forma
                                                ---------------------- ---------------------------
                                                ActionPoint  Captiva   Adjustments      Combined
                                                ----------- ---------- ------------    -----------
                                                                                       
Net revenues
  License......................................    $15,353    $10,480                     $25,833
  Service......................................      6,682     13,781                      20,463
                                                ----------- ---------- ------------    -----------
Total revenues.................................     22,035     24,261                     $46,296
                                                ----------- ---------- ------------    -----------
Cost of revenues
  License......................................        885        828        2,350 (h)      4,063
  Service......................................      2,854      8,020          200 (h)     11,074
                                                ----------- ---------- ------------    -----------
Total cost of revenues.........................      3,739      8,848        2,550         15,137
                                                ----------- ---------- ------------    -----------

Gross profit...................................     18,296     15,413       (2,550)        31,159
                                                ----------- ---------- ------------    -----------
Research and development.......................      5,552      2,304                       7,856
Sales and marketing............................     12,045      8,647                      20,692
General and administrative.....................      3,250      3,455                       6,705
                                                ----------- ---------- ------------    -----------
Operating profit (loss)........................     (2,551)     1,007       (2,550)        (4,094)

Interest and other income (expense)............        239     (1,429)       1,124 (e)        (66)
Gain on sale of Dialog Server product
  line.........................................      4,612                                  4,612
                                                ----------- ---------- ------------    -----------
Income (loss) before provision for
 income taxes..................................      2,300       (422)      (1,426)           452
                                                ----------- ---------- ------------    -----------
Provision (benefit) for income taxes...........      4,215                                  4,215

Net loss.......................................    ($1,915)     ($422)     ($1,426)        (3,763)
                                                =========== ========== ============    ===========
Basic and diluted EPS:
 Net loss......................................     ($0.45)                                ($0.48)
                                                ===========                            ===========
Shares used in basic and diluted
   EPS calculations............................      4,300                   3,492          7,792
                                                ===========            ============    ===========`

143

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Notes To Unaudited Pro Forma Condensed Combined Financial
Statements

1.  Basis of pro forma presentation.

On March 4, 2002, ActionPoint and Captiva entered into a merger agreement
whereby each outstanding share of Captiva common stock will be converted into
newly issued shares of ActionPoint common stock.  Based on the outstanding
shares of Captiva capital stock and warrants and options to acquire Captiva
common stock on March 31, 2002, each share of Captiva common stock will be
exchanged for approximately 0.0156 shares of ActionPoint common stock.  The
exact exchange ratio cannot be determined at this time because the number of
outstanding shares of Captiva and ActionPoint common stock may change prior to
the merger and the exchange ratio used to determine the number of shares of ActionPoint
common stock issued is not fixed. The final purchase price will be calculated
in accordance with EITF 99-12, using
the market price of ActionPoint's common stock a few days before and after the
date the exchange ratio is fixed. The assumptions underlying the calculation of the
conversion price and the exchange ratio and additional
details regarding the calculation of those amounts are provided in "The
Merger Agreement-Merger Consideration; Determination of the Exchange Ratio"
on page 69.  Each outstanding option and warrant to purchase shares of Captiva
common stock will be assumed also using the exchange ratio as described above.
Captiva subordinated notes are assumed to be 75% converted into Captiva common
stock prior to the consummation of the merger.  ActionPoint expects to issue or
be required to issue in the future pursuant to warrants approximately 7,805
shares of ActionPoint common stock and to assume options to purchase Captiva
common stock which will convert into options to purchase approximately 2,265,000
shares of ActionPoint common stock.  The actual number of shares of ActionPoint
common stock, options and warrants to be issued will be determined on the
effective date of the merger using the final exchange ratio based on the number
of shares of Captiva common stock, options and warrants actually outstanding on
such date.  ActionPoint will account for the merger as a purchase.  In
accordance with Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," goodwill is an indefinite
lived asset and therefore will not be amortized but will be tested for
impairment at least annually.  Accordingly, the accompanying pro forma financial
statements do not reflect any amortization of goodwill.

The unaudited pro forma condensed combined balance sheet at March 31, 2002
combines the ActionPoint and Captiva consolidated balance sheets at March 31,
2002 as if the merger had been consummated on that date.

The unaudited pro forma condensed combined statement of operations for the
year ended December 31, 2001 combines the results of operations of ActionPoint
and Captiva to give effect to the merger as if the merger had occurred on
January 1, 2001.

2.  Preliminary purchase price-assuming the conversion of 75% of the
Captiva subordinated notes.

The unaudited pro forma condensed combined financial statements reflect
an estimated purchase price of approximately $11.8 million.  The fair market
value of ActionPoint's common stock to be issued was determined using the five-
trading-day average price surrounding the date the signing of the merger
agreement was announced of $2.38 per share.  Warrants to purchase 7,805 shares
of ActionPoint common stock are assumed to be exercised as of the merger
consummation date and therefore are included below as part of the value of
common stock to be issued.  The preliminary fair market value of ActionPoint's
stock options to be issued was determined using the Black-Scholes option pricing
model.  The following assumptions were used to perform the calculation: fair
value of ActionPoint's common stock of $2.38, expected life of 24 months, risk-
free interest rate of 3.9%, expected volatility of 50% and no expected dividend
yield.  The final purchase price is dependent on the actual number of shares of
common stock exchanged, the actual number of options and warrants assumed, the
ActionPoint stock price on the day of merger consummation (as it relates to
value of options and warrants), and actual direct merger costs.  The final
purchase price will be determined upon completion of the merger.  The estimated
total purchase price of the proposed Captiva merger is as follows (in
millions):

`Value of ActionPoint common stock to be issued...    $ 8.3
Value of ActionPoint options to be issued........      2.2
Estimated direct merger costs....................      1.3
                                                  ---------
   Total estimated purchase price................    $11.8
                                                  =========`

Under the purchase method of accounting, the total
estimated purchase price is allocated to Captiva net tangible and identifiable
intangible assets based upon their estimated fair value as of the date of
completion of the

144

---

`Tangible assets acquired.........................     $6.8
Identifiable Intangible assets:
   Developed technology..........................      6.2
   Service/Maintenance agreements................      0.6
   Tradename/Trademark...........................      0.9
   Channel Partner Relationships.................      0.2
   In-process research and development...........      1.0
Goodwill.........................................     10.3
                                                  ---------
  Total assets acquired..........................     26.0

Liabilities assumed..............................    (14.2)
Deferred compensation............................      0.0
                                                  ---------
Net assets acquired..............................    $11.8
                                                  =========`

Pursuant to preliminary estimates made by management,
$7.9 million has been allocated to identifiable intangible assets with useful
lives ranging from 3 to 6 years as follows: Developed technology - 3 to 5 years;
Service/Maintenance agreements - 3 years; Trade name/Trademarks - 5 years,
and Channel Partner Relationships - 2 years.  In process-research and
development is assigned to next generation software products and was valued
by discounting anticipated cash flows resulting from those products.

A preliminary estimate of $10.2 million has been allocated to goodwill.
Goodwill represents the excess of the purchase price over the fair value of the
net tangible and intangible assets acquired.  In accordance with Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," goodwill is an indefinite lived asset and will therefore not be
amortized but will be tested for impairment at least annually.

3. Preliminary purchase price-
assuming the conversion of 100% of the Captiva subordinated notes.

Assuming that 100% of the subordinated notes are
converted into Captiva common stock, the estimated total purchase price and the
preliminary purchase price allocation are as follows (in millions):

`Value of ActionPoint common stock to be issued...    $10.4
Value of ActionPoint options to be issued........      2.2
Estimated direct merger costs....................      1.3
                                                  ---------
   Total estimated purchase price................    $13.9
                                                  =========`

Based upon the estimated purchase price, the preliminary
purchase price allocation, which is subject to change based on ActionPoint's
final analysis, is as follows (in millions):

`Tangible assets acquired.........................     $6.8
Identifiable Intangible assets:
   Developed technology..........................      6.2
   Service/Maintenance agreements................      0.6
   Tradename/Trademark...........................      0.9
   Channel Partner Relationships.................      0.2
   In-process research and development...........      1.0
Goodwill.........................................     10.3
                                                  ---------
  Total assets acquired..........................     26.0

Liabilities assumed..............................    (12.1)
Deferred compensation............................      0.0
                                                  ---------
Net assets acquired..............................    $13.9
                                                  =========`

145

---

A reduction of $18,000 and $71,000 of interest expense would result for
the three months ended March 31, 2002 and the year ended December 31, 2001, respectively,
thereby decreasing the net loss by these same amounts.

4. Pro forma adjustments.

There were no intercompany balances or transactions between ActionPoint
and Captiva.  Certain reclassifications have been made to conform Captiva's
historical amounts to ActionPoint's financial statement presentation.

The pro forma adjustments assume that 75% of the convertible notes are
converted into Captiva common stock and have been prepared as if the merger was
completed on March 31, 2002 for balance sheet purposes and as of January 1,
2001 for statement of operations purposes and reflects the following pro forma
adjustments:

1. To establish identifiable intangible assets and goodwill resulting from the
proposed merger.
2. To record estimated professional fees to advisors, legal counsel, and
accountants of approximately $1.9 million (of which $635,000 is an estimate for
Captiva).
3. To record an adjustment to fair value for Captiva deferred revenue based upon
the remaining contractual performance obligations associated with existing customer contracts.
4. To reflect conversion of Captiva subordinated notes and related accrued
interest, assumed to be 75% converted to Captiva common stock.
5. To reflect elimination of interest expense on the Captiva subordinated notes
assumed to be 75% convertible to Captiva common stock.
6. To eliminate the historical stockholders' deficit of Captiva.
7. To record the estimated value of ActionPoint common stock, options and
warrants to be issued in the proposed merger.
8. To reflect amortization of the identifiable intangible assets.
9. To reflect the write-off of in-process technology resulting from the
proposed merger.
10. No amounts have been allocated to deferred compensation for the unvested
options assumed as a result of the merger as these options currently have no
intrinsic value at the date of this calculation.

5.  Unaudited pro forma combined net loss per common share data.

Shares used to calculate unaudited pro forma combined net loss per basic
and diluted share were computed by adding 3.5 million shares assumed to be
issued in exchange for the outstanding Captiva shares, including the conversion
of the warrants and subordinated notes.  As the pro forma condensed combined
statement of operations for all periods presented shows a net loss, weighted
average basic and diluted shares are the same.

146

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF ACTIONPOINT PRIOR TO THE MERGER

The following table sets forth the beneficial ownership of the
ActionPoint common stock as of May 31, 2002, by:

- each person who is known to us to own beneficially more than 5% of the
outstanding shares of ActionPoint common stock;
- each ActionPoint director;
- each of the ActionPoint named executive officers; and
- all ActionPoint directors and named executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities.  Except as indicated by footnote, and subject
to community property laws where applicable, the stockholders named in the table
below have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them.  Percentage ownership is based on
4,374,874 shares of ActionPoint common stock outstanding as of May 31,
2002.

`Approximate
                                             Shares       Percent
                                           Beneficially  Beneficially
Name and Address of Beneficial Owner (1)    Owned (2)      Owned
-----------------------------------------  -----------   ---------
5% Stockholders                                            
Dimensional Fund Advisors................     371,600         8.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401


Directors and Named Executive Officers                     
Stephen S. Francis (3)...................     396,859         4.9%
Kimra D. Hawley (4)......................     655,525        13.7%
Matthew Albanese (5).....................     162,115         3.6%
Patrick L. Edsell........................           0            *
Joseph Falk (6)..........................      38,112            *
John Finegan (7).........................     222,398         4.9%
Daniel D. Tompkins (8)...................      76,000         1.7%
Johannes P. Schmidt (9)..................     297,578         6.5%
David Sharp (10).........................      58,376         1.3%
Bruce Silver (11)........................      19,600            *
John R. Stetak (12)......................     117,084         2.6%
Thomas T. van Overbeek (13)..............     655,525        13.7%
James Vickers............................           0            *
All current directors and executive
   officers as a group (12 persons) (14).   2,043,647        34.6%`

___________________

*      Less than 1% of the outstanding ActionPoint common stock.

1. Unless otherwise indicated, the address for each "Beneficial
Owner" is 1299 Parkmoor Avenue, San Jose, California 95126.
2. Unless otherwise indicated below, the persons and entities named in the
table above have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where applicable.
Shares of common stock subject to options that are currently exercisable or are
exercisable within 60 days of May 31, 2002 are deemed to be outstanding and to
be beneficially owned by the person holding

147



such options for the purpose of
computing the percentage ownership of such person but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person.

1. Includes 282,500 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31, 2002 and
20,780 shares beneficially owned by Mr. Francis' wife.
2. Includes 291,501 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31, 2002 and
306,449 shares beneficially owned by Mr. van Overbeek, Ms. Hawley's
husband.
3. Includes 150,626 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31, 2002.
4. Includes 35,000 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31, 2002 and
350 shares beneficially owned by Mr. Falk's wife.
5. Includes 207,500 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002.
6. Includes 20,000 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002.
7. Includes 231,250 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002 and 37,415 shares beneficially owned by Mr. Schmidt's wife.
8. Includes 43,275 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31, 2002 and
2,130 shares beneficially owned by Mr. Sharp's wife.
9. Includes 17,500 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002.
10. Includes 104,001 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002 and 3,200 shares beneficially owned by Mr. Stetak's wife.
11. Includes 125,000 shares purchasable under stock options that are
currently exercisable or that will become exercisable within 60 days of May
31, 2002 and 342,825 shares beneficially owned by Ms. Hawley, Mr. van Overbeek's
wife.
12. Includes 1,508,153 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of May 31,
2002.

148

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND
MANAGEMENT OF CAPTIVA PRIOR TO THE MERGER

The following table sets forth the beneficial ownership of the Captiva
common stock as of March 31, 2002 and as of the date immediately prior to the
merger, by:

- each person who is known to us to own beneficially more than 5% of the
outstanding shares of Captiva common stock;
- each Captiva director;
- each of the Captiva named executive officers; and
- all Captiva directors and named executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities.  Except as indicated by footnote, and subject
to community property laws where applicable, the stockholders named in the table
below have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them.  Percentage ownership as of May 31,
2002 is based on 47,344,714 shares of common stock outstanding, assuming
conversion of all outstanding shares of preferred stock into common stock.
Percentage ownership immediately prior to the merger is based on 279,728,624
shares of common stock expected to be then outstanding, assuming conversion of
all outstanding shares of preferred stock into common stock, conversion of all
promissory notes into common stock, and the exercise of options to purchase
6,083,414 shares of Captiva common stock that is expected to be made immediately
prior to the merger.  For purposes of this table, the date immediately prior to
the merger is assumed to be July 15, 2002.

`Percentage of Shares
                                                  Shares Beneficially Owned (2)          Beneficially Owned
                                                  -------------------------------   -------------------------
                                                                    Immediately       As of      Immediately
                                                    As of May       Prior to the        May      Prior to the
Name and Address of Beneficial Owner (1)             31, 2002          Merger        31, 2002       Merger
-----------------------------------------------   --------------   --------------   ----------   ------------
5% or Greater Stockholders                                                                            
Enterprise Partners III, L.P. (3)..............       7,544,588       36,865,382         15.9%          13.2%
  2223 Avenida de la Playa, Ste. 300
  La Jolla, CA 92037
C.E. Unterberg, Towbin Capital Advisors L.L.C.        3,131,984       41,257,912          6.6%          14.8%
  350 Madison Avenue
  New York, NY 10017
Andrew Arno (5)................................       4,119,270       56,242,542          8.7%          20.1%
  350 Madison Avenue
  New York, NY 10017
Thomas Unterberg (6)...........................       5,065,685       69,986,425         10.7%          25.0%
  350 Madison Avenue
  New York, NY 10017
J.F. Shea & Co., Inc...........................       2,468,207       30,157,011          5.2%          10.8%
  655 Brea Canyon Road
  Walnut, CA 91789


Directors and Named Executive Officers                                                                
Reynolds C. Bish (8)...........................       5,439,354       29,877,741         11.5%          10.7%
James Berglund, (3)............................       7,544,588       36,865,382         15.9%          13.2%
Steven D. Burton (9)...........................       4,868,502       14,701,565         10.3%           5.3%
Shirley Cerrudo (10)...........................       1,865,439       11,639,037          3.9%           4.2%
John E. Jones..................................          75,000          150,000            *            *
Mel S. Lavitt (11).............................         216,232        3,015,698            *            1.1%
Jordan M. Libit (12)...........................          37,500          150,000            *            *
Blaine J. Owens (13)...........................         260,625        1,927,096            *            *
Edward H. Pendergast...........................         206,667          265,000            *            *
Rick E. Russo (14).............................         405,412        2,316,611            *            *
All current directors and executive
   officers as a group (10 persons) (15).......      20,919,319      100,908,130         44.1%          36.0%`

149

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___________________

*      Less than 1% of the outstanding Captiva common stock.

1. Unless otherwise indicated, the address for each "Beneficial
Owner" is 10145 Pacific Heights Blvd., San Diego, CA 92121.
2. Unless otherwise indicated below, the persons and entities named in the
table above have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where applicable.
Shares of common stock subject to options that are currently exercisable or are
exercisable within 60 days of May 31, 2002, or the date immediately prior to
the merger, as applicable, are deemed to be outstanding and to be beneficially
owned by the person holding such options for the purpose of computing the
percentage ownership of such person but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
3. Includes 6,941,022 shares held by Enterprise Partners III, L.P. and 603,566
shares held by Enterprise Partners III Associates, L.P.
Shares beneficially owned immediately prior to the merger include 6,341,022 shares
held by Enterprise Partners III, L.P., 26,975,131 shares acquired through conversion
of promissory notes held by Enterprise Partners III, L.P., 603,566 shares held by
Enterprise Partners III Associates, L.P. and 2,345,663 shares acquired through conversion
of promissory notes held by Enterprise Partners III Associates, L.P.  Enterprise Partners
Venture Capital is
the general partner for each of these entities and may be deemed the beneficial
owner of the shares held by each of the entities.  James Berglund is a general
partner of Enterprise Partners Venture Capital and may be deemed the beneficial
owner of the shares beneficially owned by Enterprise Partners Venture Capital.
Mr. Berglund disclaims beneficial ownership in each case except to the extent of his
pecuniary interest therein.
4. Includes 346,907 shares held by UT Technology Fund
Ltd., 1,229,225 shares held by UT Technology Partners I, L.P., 292,374 shares
held by UT Technology Partners II, L.P. and 1,263,478 shares held by C.E.
Unterberg, Towbin Partners I, L.P.  Shares beneficially owned immediately prior to the merger
include 4,636,076 shares held by UT Technology Fund Ltd., 14,654,245 shares held
by UT Technology Partners I, L.P., 3,907,298 shares held by UT Technology
Partners II, L.P. and 18,060,293 shares held by C.E. Unterberg, Towbin Partners
I, L.P.  C.E. Unterberg, Towbin Advisors, L.L.C. manages and serves as financial
advisor to each of these entities and may be deemed the beneficial owner of the
shares held by each entity.
Andrew Arno and Thomas Unterberg have shared voting and dispositive powers with respect
to shares held by C.E. Unterberg , Towbin Advisors, L.L.C.
C.E. Unterberg, Towbin Advisors, L.L.C.
disclaims beneficial ownership in each case except to the extent of its pecuniary interest
therein.
5. Includes 3,131,984 shares held by C.E. Unterberg,
Towbin Advisors, L.L.C., 798,829 shares held by C.E. Unterberg, Towbin L.L.C.,
103,683 shares personally held by Mr. Arno, 46,887 shares held by Mr. Arno as
custodian for Jesse Arno under the New York Uniform Gift to Minors Act and
46,887 shares held by Mr. Arno as custodian for Matthew Arno under the New York
Uniform Gift to Minors Act.  Shares beneficially owned immediately prior to the merger include
41,257,912 shares held by C.E. Unterberg, Towbin Advisors, L.L.C., 11,987,705

shares held by C.E. Unterberg, Towbin L.L.C., 1,503,417 shares personally held
by him, 746,754 shares held by Mr. Arno as custodian for Jesse Arno under the
New York Uniform Gift to Minors Act and 746,754 shares held by Mr. Arno as
custodian for Matthew Arno under the New York Uniform Gift to Minors Act.  Mr.
Arno disclaims beneficial ownership in each case except to the extent of his pecuniary
interest therein.
6. Includes 3,131,984 shares held by C.E. Unterberg,
Towbin Advisors, L.L.C., 798,829 shares held by C.E. Unterberg, Towbin L.L.C.,
750,200 shares personally held by Mr. Unterberg, 262,448 shares held by the Marjorie and
Clarence Unterberg Foundation and 131,224 shares held by the Bella and Israel
Unterberg Foundation.  Shares beneficially owned immediately prior to the merger include
41,257,912 shares held by

150


C.E. Unterberg, Towbin Advisors, L.L.C., 11,987,705 shares held
by C.E. Unterberg, Towbin L.L.C., 11,948,076 shares personally held by him,
3,195,155 shares held by the Marjorie and Clarence Unterberg Foundation and
1,597,577 shares held by the Bella and Israel Unterberg Foundation.  Mr.
Unterberg disclaims beneficial ownership in each case except to the extent of his pecuniary
interest therein.
7. Includes 305,888 shares acquired through conversion of
a promissory note and interest payable on the note.  Shares immediately prior to
the merger include 27,994,692 shares attributable from the conversion of a
promissory note into Captiva common stock. John F. Shea has shared voting and dispositive
powers with respect to shares held by J.F. Shea & Co., Inc.
8. Includes 4,074,764 shares held
by the Reynolds C. Bish Family Living Trust dated March 28, 1998 and 1,364,590
shares issuable to Mr. Bish or his wife, an employee of Captiva, pursuant to
options vested or exercisable within 60 days of May 31, 2002.  Shares
beneficially owned immediately prior to the merger include 24,473,971 shares
purchasable under stock options that will become
exercisable within 60 days of the effective date of the merger.  Mr. Bish is co-trustee of the
Reynolds C. Bish Family Living Trust and may be deemed the beneficial owner of
the shares held by the Reynolds C. Bish Family Living Trust.  Mr. Bish disclaims
beneficial ownership except to the extent of his pecuniary interest therein.
9. Includes 1,058,333 shares
purchasable under stock options that are currently exercisable or that will
become exercisable within 60 days of May 31, 2002.  Shares beneficially owned
immediately prior to the merger include 9,853,896 shares purchasable under stock
options that will become exercisable within 60 days of the effective date of the merger.
10. Includes 1,865,439 shares held by Novus Ventures, L.P.
Shares beneficially owned immediately prior to the merger include 1,865,439 shares
held by Novus Ventures, L.P. and 9,773,598 shares acquired through conversion of promissory
notes held by Novus Ventures, L.P.  Novus Ventures is the general partner of Novus Ventures,
 L.P. and has [sole/shares] voting and dispositive power with respect to shares held by Novus
Ventures, L.P. Shirley Cerrudo is
the managing partner of Novus Ventures and may be deemed the beneficial owner of
the shares beneficially owned by Novus Ventures L.P.  Ms. Cerrudo disclaims
beneficial ownership in each case except to the extent of her pecuniary interest
therein.
11. Includes 42,504 shares held by Mel Lavitt,
108,116 shares held by Wendy Lavitt, Mr. Lavitt's spouse and 65,612 held by Park City
Investments, which is wholly-owned by Mr. Lavitt.  Shares beneficially owned
immediately prior to the Merger include 666,551 shares acquired by Mr. Lavitt
through conversion of a promissory note and interest payable on the note,
1,399,734 shares acquired by Ms. Lavitt through conversion of a promissory note
and interest payable on the note and 733,176 shares acquired by Park City
Investments through conversion of a promissory note and interest payable on the
note.
12. Includes 37,500 shares
purchasable under stock options that are currently exercisable or that will
become exercisable within 60 days of May 31, 2002.  Shares beneficially owned
immediately prior to the merger include 150,000 shares purchasable under stock
options that  will become exercisable within 60 days of the effective date of the merger.
13. Includes 260,265 shares
purchasable under stock options that are currently exercisable or that will
become exercisable within 60 days of May 31, 2002.  Shares beneficially owned
immediately prior to the merger include 1,692,721 shares purchasable under stock
options that  will become exercisable within 60 days of the effective date of the merger.
14. Includes 379,167 shares
purchasable under stock options that are currently exercisable or that will
become exercisable within 60 days of May 31, 2002.  Shares beneficially owned
immediately prior to the merger include 293,270 shares acquired through
conversion of a promissory note and interest payable on the note and 1,947,096
shares purchasable under stock options that  will
become exercisable within 60 days of the effective date of the merger.
15. Includes 3,381,882 shares
purchasable under stock options that are currently exercisable or that will
become exercisable within 60 days of May 31, 2002.  Shares beneficially owned
immediately prior to the merger

151


include 37,936,434 shares purchasable under
stock options that  will become exercisable within
60 days of the effective date of the merger .

152

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND
MANAGEMENT OF THE COMBINED COMPANY FOLLOWING THE MERGER

The following table sets forth the pro forma beneficial ownership of the
common stock of the combined company as of May 31, 2002, assuming the
completion of the merger, by:

- each person who is known to us to own beneficially more than 5% of the
outstanding shares of common stock of the combined company;
- each director of the combined company;
- each of the executive officers of the combined company; and
- all directors and executive officers of the combined company as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities.  Except as indicated by footnote, and subject
to community property laws where applicable, the stockholders named in the table
below have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them.  Percentage ownership is based on
8,749,747 shares of common stock of the combined company outstanding at the
effective time of the merger, which includes 4,374,874 shares actually
outstanding as of May 31, 2002 and assumes that 4,374,873 shares will be
issued at the effective time of the merger.  For purposes of this table,
effective time of the merger is assumed to be July 15, 2002.

`Approximate
                                                     Shares        Percent
                                                  Beneficially   Beneficially
Name and Address of Beneficial Owner (1)           Owned (2)        Owned
------------------------------------------------  ------------   ------------
5% Stockholders                                                       
Thomas T. van Overbeek (3)......................      837,225            9.6%
Enterprise Partners III, L.P. (4)...............      575,535            6.6%
  2223 Avenida de la Playa, Ste. 300
  La Jolla, CA 92037
C.E. Unterberg, Towbin Advisors L.L.C. (5)......      644,110            7.4%
  350 Madison Avenue
  New York, NY 10017
Andrew Arno (6).................................      878,047           10.0%
  350 Madison Avenue
  New York, NY 10017
Thomas Unterberg (7)............................    1,092,614           12.5%
  350 Madison Avenue
  New York, NY 10017
J.F. Shea & Co., Inc............................      470,805            5.4%
  655 Brea Canyon Road
  Walnut, CA 91789


Directors and Named Executive Officers                                
Reynolds C. Bish (8)............................      466,445            5.3%
James Berglund (4)..............................      575,535            6.6%
Steven D. Burton (9)............................      229,518            2.6%
Patrick L. Edsell...............................            0            *
John Finegan (10)...............................      222,398            2.5%
Stephen S. Francis (11).........................      396,859            4.5%
Kimra D. Hawley (12)............................      837,225            9.6%
Mel S. Lavitt (13)..............................       47,082            *
Blaine J. Owens (14)............................       30,085            *
Rick E. Russo (15)..............................       36,166            *
David Sharp (16)................................       58,376            *
Bruce Silver (17)...............................       19,600            *
James Vickers........................                       0            *
All current directors and executive
   officers as a group (13 persons) (18)........    3,064,342           30.9%`

154

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___________________

*      Less than 1% of the outstanding ActionPoint common stock.

1. Unless otherwise indicated, the address for each "Beneficial
Owner" affiliated with ActionPoint prior to the merger is 1299 Parkmoor
Avenue, San Jose, California 95126.  The address for each "Beneficial
Owner" affiliated with Captiva prior to the merger is 10145 Pacific Heights
Blvd., San Diego, CA 92121.
2. Unless otherwise indicated below, the persons and entities named in the
table above have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where applicable.
Shares of common stock subject to options that are currently exercisable or are
exercisable within 60 days of the effective time of the merger are deemed to be
outstanding and to be beneficially owned by the person holding such options for
the purpose of computing the percentage ownership of such person but are not
treated as outstanding for the purpose of computing the percentage ownership of
any other person.  Calculation of beneficially owned shares assumes 100% of
Captiva notes are converted to common shares at the effective time of the
merger.
3. Includes 349,076 shares beneficially owned by Kimra Hawley, Mr. van Overbeek's
wife, 125,000 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger and 181,700 shares held by Novus Ventures, L.P.  Mr. van Overbeek
is a general partner of Novus Ventures and may be deemed the beneficial owner of
the shares beneficially owned by Novus Ventures.  Mr. van Overbeek disclaims
beneficial ownership in each case except to the extent of his pecuniary interest
therein.
4. Includes 529,492 shares held by Enterprise Partners III, L.P. and 46,043
shares held by Enterprise Partners III Associates, L.P.  Enterprise Partners is
the general partner for each of these entities and may be deemed the beneficial
owner of the shares held by each of the entities.  James Berglund, is a general
partner of Enterprise Partners Venture Capital and may be deemed the beneficial
owner of the shares beneficially owned by Enterprise Partners Venture Capital.
Mr. Berglund disclaims beneficial ownership in each case except to the extent of his
pecuniary interest therein.
5. Includes 72,377 shares held by UT Technology Fund Ltd., 228,779 shares held
by UT Technology Partners I, L.P., 61,000 shares held by UT Technology Partners
II, L.P. and 281,954 shares held by C.E. Unterberg, Towbin Partners I, L.P.
C.E. Unterberg, Towbin Advisors, L.L.C. manages and serves as financial advisor
to each of these entities and may be deemed the beneficial owner of the shares
held by each of the entities.  Andrew Arno and Thomas Unterberg exercise shared
voting and dispositive powers with respect to shares held by C.E. Unterberg,
Towbin Advisors, L.L.C.  C.E. Unterberg, Towbin Advisors, L.L.C. disclaims
beneficial ownership in each case except to the extent of its pecuniary interest
therein.
6. Includes 644,110 shares held by C.E. Unterberg, Towbin Advisors, L.L.C.,
187,150 shares held by C.E. Unterberg, Towbin L.L.C., 23,471 shares personally
held by him, 11,658 shares held by Mr. Arno as custodian for Jesse Arno under
the New York Uniform Gift to Minors Act and 11,658 shares held by Mr. Arno as
custodian for Matthew Arno under the New York Uniform Gift to Minors Act.  Mr.
Arno disclaims beneficial ownership in each case except to the extent of his pecuniary
interest therein.
7. Includes 644,110 shares held by C.E. Unterberg, Towbin Advisors, L.L.C.,
187,150 shares held by C.E. Unterberg, Towbin L.L.C., 186,531 shares personally
held by him, 49,882 shares held by the Marjorie and Clarence Unterberg
Foundation and 24,941 shares held by the Bella and Israel Unterberg Foundation.
Mr. Unterberg disclaims beneficial ownership in each case except to the extent of his
pecuniary interest therein.

154

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1. Includes 402,831 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
2. Includes 170,034 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
3. Includes 207,500 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
4. Includes 291,501 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger and 20,780 shares beneficially owned by Mr. Francis' wife.
5. Includes 306,449 shares beneficially held by Mr. van Overbeek, Ms. Hawley's
husband, 285,250 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger and 181,700 shares held by Novus Ventures, L.P.  Mr. van Overbeek
is a general partner of Novus Ventures and Ms. Hawley may therefore be deemed
the beneficial owner of the shares beneficially owned by Novus Ventures.  Ms.
Hawley disclaims beneficial ownership in each case except to the extent of her pecuniary
interest therein.
6. Includes 11,070 shares held by Mr. Lavitt, 23,540 shares held by Wendy Lavitt, Mr. Lavitt's
wife and 12,471 shares held by Park City Investments, which is wholly owned by Mr.
Lavitt.
7. Includes 30,085 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
8. Includes 31,178 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
9. Includes 43,275 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger and 2,130 shares beneficially owned by Mr. Sharp's wife.
10. Includes 500 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.
11. Includes 1,476,404 shares purchasable under stock options that are currently
exercisable or that will become exercisable within 60 days of the effective time
of the merger.

155

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DESCRIPTION OF ACTIONPOINT CAPITAL STOCK

The following is a summary of certain matters with respect to the
capital stock of ActionPoint.  Because it is only a summary, it does not contain
all information that may be important to you.  Therefore, you should carefully
read the more detailed provisions of ActionPoint's amended and restated
certificate of incorporation and amended and restated bylaws attached as
exhibits to ActionPoint's filings with the Securities and Exchange
Commission.

ActionPoint's authorized capital stock currently consists of 25,000,000
shares of common stock, par value $0.01 per share, and
2,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

As of May 31, 2002, there were 4,374,874 shares of ActionPoint common
stock outstanding held of record by approximately 105 stockholders of record and
approximately 2,500 beneficial stockholders. After giving effect to the issuance
of the shares of ActionPoint common stock in connection with the merger, there
will be approximately 8,749,747 shares of ActionPoint common stock
outstanding.

Holders of ActionPoint common stock are entitled to one vote for each share
held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights.  Holders of the shares of ActionPoint common stock
entitled to vote in any election of directors may elect by a plurality vote a
board of directors.  Holders of ActionPoint common stock are entitled to receive
ratably those dividends, if any, as may be declared by the board of directors
out of legally available funds, subject to any preferential dividend rights of
any outstanding preferred stock.  Upon a liquidation, dissolution or winding up,
the holders of ActionPoint common stock are entitled to receive ratably
ActionPoint's net assets available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock.
Holders of ActionPoint common stock have no preemptive, subscription, redemption
or conversion rights. The outstanding shares of ActionPoint common stock are,
and the shares offered by ActionPoint in the offering will be, when issued in
consideration for payment, fully paid and nonassessable.  The rights,
preferences and privileges of holders of ActionPoint common stock are subject
to, and may be adversely affected by, the rights of holders of shares of any
series of preferred stock that ActionPoint may designate and issue in the
future.

Preferred Stock

The ActionPoint board of directors is authorized, without further
stockholder approval, to issue from time to time up to an aggregate of 2,000,000
shares of preferred stock in one or more series and to fix or alter the rights,
preferences, privileges and restrictions of the shares of each series, including
the dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption, including sinking fund provisions, redemption price or prices,
liquidation preferences and the number of shares constituting any series or
designations of such series.  ActionPoint does not presently have any plans to
issue any shares of preferred stock.

Anti-Takeover Effects of Certain Provisions of Delaware Law and
ActionPoint's Certificate of Incorporation and Bylaws

ActionPoint is subject to the provisions of Section 203 of the
Delaware General Corporation Law, or the DGCL.  Subject to certain exceptions,
Section 203 prohibits a publicly-held Delaware corporation from engaging in
a "business combination" with an "interested stockholder"
for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless the interested stockholder
attained such status with the approval of the board of directors or unless the
business combination is approved in a prescribed manner.  A "business
combination" includes a merger, an asset sale and any other transaction
resulting in a financial benefit to the interested stockholder. Subject to
exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock.  This statute could prohibit or delay the
accomplishment of mergers or other takeover or change in control attempts with
respect to ActionPoint and, accordingly, may discourage attempts to acquire
ActionPoint.

In addition, provisions of the certificate of incorporation and bylaws, which
provisions will be in effect upon the closing of the merger and are summarized
in the following section, may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider in its best

156

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Limitation of Liability and Indemnification Matters

ActionPoint's certificate of incorporation provides that, except to the
extent prohibited by DGCL, its directors shall not be personally liable to
ActionPoint or its stockholders for monetary damages for any breach of fiduciary
duty as directors of ActionPoint.  Under the DGCL, the directors have a
fiduciary duty to ActionPoint that is not eliminated by this provision of the
certificate and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain available.  In
addition, each director will continue to be subject to liability under the DGCL
for breach of the director's duty of loyalty to ActionPoint, for acts or
omissions which are found by a court of competent jurisdiction to be not in good
faith or which involve intentional misconduct, or knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited by
the DGCL.  This provision also does not affect the directors' responsibilities
under any other laws, such as the federal securities laws or state or federal
environmental laws.

Section 145 of the DGCL empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers, provided that
this provision shall not eliminate or limit the liability of a director:

- for any breach of the director's duty of loyalty to the corporation or its
stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- arising under Section 174 of the DGCL; or
- for any transaction from which the director derived an improper personal
benefit.

The DGCL provides further that the indemnification permitted under the DGCL
shall not be deemed exclusive of any other rights to which the directors and
officers may be entitled under the corporation's bylaws, any agreement, a vote
of stockholders or otherwise. ActionPoint's certificate of incorporation
eliminates the personal liability of directors to the fullest extent permitted
by the DGCL and provides that ActionPoint shall fully indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that such person is or
was a director or officer of ActionPoint, or is or was serving at the request of
ActionPoint as a director or officer of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding.

ActionPoint's bylaws permit it to secure insurance on behalf of any officer,
director, employee or other agent for any liability arising out of his or her
actions, to the extent that the DGCL would permit indemnification. ActionPoint
currently maintains liability insurance in favor of its officers and
directors.

At present, ActionPoint is not the subject of any pending litigation or
proceeding involving any director, officer, employee or agent as to which
indemnification will be required or permitted under its certificate of
incorporation. ActionPoint is not aware of any threatened litigation or
proceeding that may result in a claim for such indemnification.

Transfer Agent and Registrar

The transfer agent and registrar for ActionPoint common stock is
EquiServe, L.P., Canton, Massachusetts.

157

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Stockholder Rights Plan

On September 9, 1997, the board of directors of ActionPoint declared a
dividend of one preferred share purchase right for each outstanding share of
common stock, par value $.01 per share, of ActionPoint payable to stockholders
of record on September 24, 1997.  Each such right entitles the registered holder
to purchase from ActionPoint one one-thousandth of a share of Series A junior
participating preferred stock, par value $.01 per share, of ActionPoint at a
price of $40.00 per one one-thousandth of a share of preferred stock, subject to
adjustment.

Until the earlier to occur of:

- 10 days following a public announcement that a person or group of affiliated
or associated persons has acquired beneficial ownership of 15% or more of the
outstanding shares of common stock; or
- 10 business days (or such later date as may be determined by the board of
directors prior to such time as any person or group of affiliated persons
becomes an acquiring person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 15% or more of
the outstanding shares of common stock.

The rights will be evidenced, with respect to any of the common stock
certificates outstanding as of the date of record, by such common stock
certificate together with a copy of the summary of rights contained within the
rights agreement dated as of September 9, 1997.

The rights agreement provides that, until the date of distribution (or
earlier expiration of the rights), the rights will be transferred with the
common stock.  Until the date of distribution (or earlier expiration of the
rights), new common stock certificates issued after the date of record upon
transfer or new issuance of common stock will contain a notation incorporating
the rights agreement by reference.  Until the date of distribution (or earlier
expiration of the rights), the surrender for transfer of any certificates for
shares of common stock outstanding as of the date of record, even without such
notation or a copy of a summary of rights, will also constitute the transfer of
the rights associated with the shares of common stock represented by such
certificate.  As soon as practicable following the date of distribution,
separate certificates evidencing the rights will be mailed to holders of record
of the common stock as of the close of business on the date of distribution.

The rights are not exercisable until the date of distribution.  The rights
will expire on September 9, 2007, unless the date is advanced or extended or
unless the rights are earlier redeemed or exchanged by ActionPoint, in each case
as described below.

The price payable, and the number of shares of preferred stock or other
securities or property issuable, upon exercise of the rights is subject to
adjustment from time to time to prevent dilution:

- in the event of a stock dividend, subdivision, combination or
reclassification of, the preferred stock;
- upon the grant to holders of the preferred stock of certain rights or
warrants to subscribe for or purchase preferred stock at a price, or securities
convertible into preferred stock with a conversion price, less than the then-
current market price of the preferred stock; or
- upon the distribution to holders of the preferred stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in preferred stock) or of subscription rights or warrants (other than
those referred to above).

The number of outstanding rights is subject to adjustment in the event of a
stock dividend on the common stock payable in shares of common stock or
subdivisions, consolidations or combinations of the common stock occurring, in
any such case, prior to the date of distribution.

Shares of preferred stock purchasable upon exercise of the rights will not be
redeemable. Each share of preferred stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $10 per share
but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of common

158

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Because of the nature of the preferred stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
preferred stock purchasable upon exercise of each right should approximate the
value of one share of common stock.

In the event that any person or group of affiliated or associated persons
becomes an acquiring person, this would trigger these rights and each holder of
a right, other than rights beneficially owned by the acquiring person (which
will thereupon become void), will thereafter have the right to receive upon
exercise of a right that number of shares of common stock having a market value
of two times the exercise price of the right.

In the event that, after a person or group has become an acquiring person,
ActionPoint is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a right (other than rights
beneficially owned by an acquiring person, group or affiliated entities which
will have become void) will thereafter have the right to receive upon the
exercise of a right that number of shares of common stock of the person with
whom ActionPoint has engaged in the foregoing transaction (or its parent) that
at the time of such transaction have a market value of two times the exercise
price of the right.

At any time after any person or group becomes an acquiring person and prior
to the earlier of one of the events described in the previous paragraph or the
acquisition by such acquiring person of 50% or more of the outstanding shares of
common stock, the board of directors of ActionPoint may exchange the rights
(other than rights owned by such acquiring person which will have become void),
in whole or in part, for shares of common stock or preferred stock (or a series
of ActionPoint's preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of common stock, or a fractional
share of preferred stock (or other preferred stock) equivalent in value thereto,
per right.

With certain exceptions, no adjustment in the purchase price will be required
until cumulative adjustments require an adjustment of at least 1% in such
purchase price.  No fractional shares of preferred stock or common stock will be
issued, and in lieu thereof an adjustment in cash will be made based on the
current market price of the preferred stock or the common stock.

At any time prior to the time an acquiring person becomes such, the board of
directors of ActionPoint may redeem the rights in whole, but not in part, at a
price of $.01 per right, payable, at the option of ActionPoint, in cash, shares
of common stock or such other form of consideration as the board of directors of
ActionPoint shall determine. The redemption of the rights may be made effective
at such time, on such basis and with such conditions as the board of directors
in its sole discretion may establish.  Immediately upon any redemption of the
rights, the right to exercise the rights will terminate and the only right of
the holders of rights will be to receive the redemption price.

Until a right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of ActionPoint, including, without limitation,
the right to vote or to receive dividends.

159

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SELLING STOCKHOLDERS

Shares of ActionPoint common stock issued to some "affiliates"
of Captiva, as that term is defined in Rule  145 under the Securities Act,
are being registered by way of the registration statement of which this joint
proxy statement/prospectus forms a part.  Without this registration statement,
these shares could only be resold by the affiliates subject to the restrictions
on resale in Rule 145.

Assuming each share of Captiva common stock is converted at the effective
time of the merger into the right to receive approximately 0.0156 shares of
ActionPoint common stock, the selling stockholders would be entitled to receive
an aggregate of approximately 2,262,365 shares of ActionPoint common stock.

This exchange ratio is based on the following assumptions:

- the entire principal amount and interest outstanding under the amended
senior notes and amended convertible notes have been converted into shares of
Captiva common stock pursuant to the note conversion agreement;
- an aggregate of 279,728,624 shares of Captiva common stock are outstanding
at the effective time of the merger; and
- an aggregate of 4,374,874 shares of ActionPoint common stock are outstanding
at the effective of the merger.

If these assumption are not correct, the number of shares of ActionPoint
common stock that the selling stockholders may ultimately have a right to
receive in exchange for their Captiva common stock and, consequently, the number
of shares resold by the selling stockholders under this joint proxy
statement/prospectus, may be more or less than 2,838,032 shares.  Approximately
43% of the shares that may be offered for resale by the selling stockholders are
subject to lock-up agreements and, therefore, the ability to resell these shares
will be restricted during the first 180 days following the merger.  See
"Other Agreements-Lock-Up Agreements" on page 85.

The following table sets forth the name and address of the selling
stockholders, the number of shares and percentage of shares of ActionPoint
common stock that the selling stockholders owned prior to the offering for
resale of any of the shares of ActionPoint common stock being registered hereby,
the maximum number of shares of ActionPoint common stock that may be offered for
resale for the account of the selling stockholders pursuant to this joint proxy
statement/prospectus and the percentage of shares of ActionPoint common stock to
be held by the selling stockholders after the offering of the shares available
for resale (assuming all of the shares offered for resale are sold by the
selling stockholders).

`Percentage of Shares
                                                                              ActionPoint Common Stock
                                              Shares of       Number of         Beneficially Owned (3)
                                             ActionPoint      Shares of    ------------------------
                                                Common       ActionPoint     Before        After
                                             Stock to be       Common      Offering of  Offering of
                                             Resold in the     Stock       the Resale   the Resale
Selling Stockholders (1)                     Offering (2)     Owned (3)      Shares     Shares (4)
------------------------------------------   ------------    -----------   -----------  -----------
Jordan M. Libit...........................         2,342          2,342           *          0
  10145 Pacific Heights Blvd.
  San Diego, CA 92121

John Jones................................         2,342          2,342           *          0
  10145 Pacific Heights Blvd.
  San Diego, CA 92121

Edward H. Pendergast......................         4,137          4,137           *          0
  10145 Pacific Heights Blvd.
  San Diego, CA 92121

C.E. Unterburg, Towbin Capital
Partners I, L.P...........................       281,954        281,954           3.2%      0
  350 Madison Avenue
  New York, NY 10017


160





C.E. Unterburg, Towbin, LLC...............       187,150        187,150           2.1%      0
  350 Madison Avenue
  New York, NY 10017

UT Technology Partners I, L.P.............       228,779        228,779           2.6%      0
  350 Madison Avenue
  New York, NY 10017

UT Technology Partners II, L.P............        61,000         61,000           *         0
  350 Madison Avenue
  New York, NY 10017

UT Technology Fund Ltd.......................     72,377         72,377           *         0
  350 Madison Avenue
  New York, NY 10017

Enterprise Partners III, L.P..............       529,492        529,492           6.1%      0
  2223 Avenida de la Playa, Ste. 300
  La Jolla, CA 92037

Enterprise Partners Associates III, L.P...        46,044         46,044           *         0
  2223 Avenida de la Playa, Ste. 300
  La Jolla, CA 92037

Nissho Electronics Corporation............        12,009         12,009           *         0
  3-1 Tsukiji 7-Chome, Chuo-ku
  Tokyo, Japan 104-8444

Novus Ventures, L.P.......................       181,706        181,706           2.1%      0
  20111 Stevens Creek Blvd.
  Suite 130
  Cupertino, CA 95014

Totem Investment Partners, L.L.C. ........       182,228        182,228           2.1%      0
  P.O. Box 2551
  Rancho Santa Fe, CA 92067

J.F. Shea & Co., Inc. ....................       470,805        470,805           5.4%      0
  655 Brea Canyon Road
  Walnut, CA 91789`





* 	Less than 1%

(1)	This table is based upon information supplied to ActionPoint by
Captiva or the selling stockholders.

(2)	Represents shares of ActionPoint common stock issuable to the
selling stockholders based on an exchange ratio of approximately 0.0156.  See
"The Merger Agreement-Exchange of Shares" on page 72.

(3) 	The percentage of shares owned is determined based upon the sum
of (i) 4,374,874 shares of ActionPoint common stock issued and outstanding as of
May 31, 2002, and (ii) the issuance of an aggregate of 4,374,873 shares of
ActionPoint common stock at the effective time of the merger.

(4)	Assumes that the selling stockholders sell all of the shares
available for resale.

Relationship of Selling Stockholders to the Combined Company.
Immediately following the merger, Messrs. Berglund and Lavitt will be elected to
the ActionPoint board of directors.  As of the date of this joint proxy
statement/prospectus, Mr. Berglund owns 2,000 shares of ActionPoint common
stock.  In addition, Mr. Berglund is a general partner of Enterprise Partners
Venture Capital, the general partner of Enterprise Partners III, L.P. and its
related entities, which are expected to hold in the aggregate 575,535 shares of
ActionPoint common stock

161

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Nissho Electronics Corporation is Captiva's product distributor in Japan.
ActionPoint expects to continue this relationship with Nissho Electronics
Corporation as its product distributor in Japan following the merger.

Thomas van Overbeek, Kimra Hawley and Daniel Tompkins, each a director of
ActionPoint, are beneficial owners of shares of Captiva's preferred stock held
by Novus Ventures.  Messrs. van Overbeek and Tompkins are general partners of
Novus Ventures, and Ms. Hawley is married to Mr. van Overbeek.

Plan of Distribution. ActionPoint does not know of any plan of
distribution for the resale of ActionPoint common stock by the selling
stockholders.  ActionPoint will not receive any of the proceeds from the sale by
the selling stockholders of any of the resale shares.

ActionPoint expects that the selling stockholders or transferees may sell the
resale shares from time to time in transactions on The Nasdaq National Market,
in privately negotiated transactions or a combination of such methods of sale,
at fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.  The selling stockholders may sell the resale shares to or through
broker-dealers, and such broker-dealers may receive compensation from the
selling stockholders or the purchasers of the resale shares, or both.

At any time a particular offer of resale shares is made, to the extent
required, a supplemental prospectus will be distributed which will set forth the
number of resale shares offered and the terms of the offering including the name
or names of any underwriters, dealers or agents, the purchase price paid by any
underwriter for the resale shares purchased from the selling stockholders, any
discounts, commission and other items constituting compensation from the selling
stockholders and any discounts, concessions or commissions allowed or reallowed
or paid to dealers.

The selling stockholders and any broker-dealers who act in connection with
the sale of resale shares hereunder may be deemed to be "underwriters"
as that term is defined in the Securities Act and any commissions received by
them and profit on any resale of shares might be deemed to be underwriting
discounts and commissions under the Securities Act.

Any or all of the sales or other transactions involving the resale shares
described above, whether by the selling stockholders, any broker-dealer or
others, may be made pursuant to this joint proxy statement/prospectus.  In
addition, any resale shares that qualify for sale under Rule 145 of the
Securities Act may be sold under Rule 145 rather than under this joint proxy
statement/prospectus.

In order to comply with the securities laws of certain states, if applicable,
the resale shares may be sold in such jurisdictions only through registered or
licensed brokers or dealers.

The selling stockholders and any other persons participating in the sale or
distribution of the resale shares will be subject to liability under the federal
securities laws and must comply with the requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended, or Exchange Act, including Rule
10b-5 and Regulation M under the Exchange Act.  These rules and regulations may
limit the timing of purchases and sales of shares of ActionPoint common stock by
the selling stockholders or other persons.  Under these rules and regulations,
the selling stockholders and other persons participating in the sale or
distribution:

- may not engage in any stabilization activity in connection with ActionPoint
common stock;
- must furnish each broker which offers resale shares covered by this joint
proxy statement/prospectus with the number of copies of this joint proxy
statement/prospectus and any supplement which are required by the broker; and
- may not bid for or purchase any ActionPoint common stock or attempt to
induce any person to purchase any ActionPoint common stock other than as
permitted under the Exchange Act.

These restrictions may affect the marketability of any resale shares offered
by the selling stockholders.

ActionPoint will make copies of this joint proxy statement/prospectus
available to the selling stockholders and has informed the selling stockholders
of the need for delivery of a copy of this joint proxy statement/prospectus to
each purchaser of the resale shares prior to or at the time of any sale of the
resale shares offered hereby.  After the merger, ActionPoint has agreed with
Captiva to file a post-effective amendment on Form S-3 to the registration
statement of which this joint proxy statement/prospectus is a part, which post-
effective amendment will include a resale prospectus for the benefit of the
selling stockholders of the number of shares of ActionPoint common stock
received by the selling stockholders in the merger, and to keep this amendment
effective until the earlier of one year after the merger or the date of final
sale by the selling stockholders of all shares of ActionPoint common stock
registered on the amendment.

ActionPoint may suspend the effectiveness or use of, or trading under, the
registration statement if it shall determine that the sale of any securities
pursuant to the registration statement would:

- materially impede, delay or interfere with any material pending or proposed
financing, acquisition, corporate reorganization or other similar transaction
involving ActionPoint for which its has authorized negotiations;
- materially adversely impair the consummation of any pending or proposed
material offering or sale of any class of securities by the Company; or
- require disclosure of material nonpublic information that, if disclosed at
such time, would be materially harmful to the interests of ActionPoint and its
stockholders.

All costs and expenses associated with registering the resale shares being
offered hereunder with the Securities and Exchange Commission will be paid by
ActionPoint.

The selling stockholders may agree to indemnify certain persons including
broker-dealers or others, against certain liabilities in connection with any
offering of the resale shares including liabilities under the Securities Act.
ActionPoint has not agreed to indemnify any selling stockholders, their broker-
dealers or others against any liabilities in connection with any offering of the
resale shares including liabilities under the Securities Act. ActionPoint may
enter into agreements with the selling stockholders regarding, among other
things, the ability of the selling stockholders to sell shares registered for
resale under the registration statement and compliance by the selling
stockholder with the Securities Act and the Exchange Act

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COMPARISON OF RIGHTS OF HOLDERS OF CAPTIVA COMMON STOCK AND
ACTIONPOINT COMMON STOCK

Upon consummation of the merger, the stockholders of Captiva, which is a
California corporation, will become stockholders of ActionPoint, which is a
Delaware corporation.  The rights of Captiva stockholders will be governed by
the certificate of incorporation and bylaws of ActionPoint, which differ in
certain material respects from the articles of incorporation and bylaws of
Captiva.  The following discussion summarizes certain material differences
between the certificate of incorporation and bylaws of ActionPoint, on the one
hand, and the articles of incorporation and bylaws of Captiva, on the other, as
well as material differences between California and Delaware law that may affect
the interests of Captiva stockholders.  The discussion is only a summary and is
not a complete description of such differences, and is qualified in its entirety
by reference to Delaware law,  California law, the common law thereunder and the
full text of the certificate of incorporation and bylaws of ActionPoint and the
articles of incorporation and bylaws of Captiva.

Limitation of Director Liability

California and Delaware law each permit a corporation to adopt a
provision in its articles or certificate of incorporation eliminating the
liability of directors to the corporation or its stockholders for monetary
damages for breach of a director's fiduciary duty, subject to certain
limitations.  ActionPoint's certificate of incorporation and Captiva's article
of incorporation each contain a provision eliminating director liability to the
maximum extent permitted by law, with Delaware law permitting somewhat broader
elimination of liability.

California law does not permit the elimination of monetary liability of a
director where such liability is based on:

- intentional misconduct or a knowing and culpable violation of law;
- acts or omissions that a director believes to be contrary to the best
interests of the corporation or its stockholders or that involve the absence of
good faith on the part of the director;
- receipt of an improper personal benefit by the director;
- acts or omissions that show reckless disregard for the director's duty to
the corporation or its stockholders in circumstances in which the director was
aware, or should have been aware in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
stockholders;
- acts or omissions that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the corporation or its
stockholders;
- interested transactions between the corporation and a director in which a
director has a material financial interest; or
- liability for improper distributions, loans or guarantees.

Delaware law does not permit the elimination of monetary liability of a
director where such liability is based on:

- breaches of a director's duty of loyalty to the corporation or its
stockholders;
- acts or omissions not in good faith or involving intentional misconduct or
knowing violations of law;
- the payment of unlawful dividends or unlawful stock repurchases or
redemptions; or
- transactions in which the director received an improper personal benefit.

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Indemnification

The bylaws of ActionPoint and Captiva require those companies to
indemnify all directors, officers and employees to the maximum extent permitted
by law.

California law permits indemnification of expenses, judgments, fines and
settlements in connection with third-party actions, and indemnification of
expenses (and possibly settlements) in derivative actions, except that, with
respect to derivative actions (i.e., actions brought on behalf of a corporation
by a stockholder of such corporation):

- no indemnification may be made when a person is adjudged liable to the
corporation in the performance of that person's duty to the corporation and its
stockholders unless a court determines such person is entitled to indemnity for
expenses, and then such indemnification may be made only to the extent that the
court so determines; and
- no indemnification may be made in respect of amounts paid or expenses
incurred in settling or otherwise disposing of a pending action without court
approval.

The foregoing indemnification is permitted only for acts taken in good faith
and believed to be in the best interests of the corporation and its
stockholders, as determined by a majority vote of a disinterested quorum of the
directors, independent legal counsel (if a quorum of independent directors is
not obtainable), a majority vote of a quorum of the stockholders (excluding
shares owned by the indemnified party) or the court handling the action.
California law requires indemnification when the individual has successfully
defended an action on the merits. California law also permits a corporation to
advance expenses to a person to defend a proceeding and to provide
indemnification broader than that expressly allowed by statute, subject to
certain limitations.

Delaware law relating to indemnification is similar to California law except
that: (i) no court approval is required to provide indemnification for expenses
incurred in derivative actions that are settled; (ii) it appears less likely
that a corporation could provide indemnification of amounts paid in settling a
derivative suit; (iii) the standard of conduct as to when indemnification is
permitted includes actions reasonably believed to be not opposed to the best
interests of the corporation, not just those believed to be in the best
interests of the corporation; and (iv) indemnification of expenses is required
whenever an individual has successfully defended an action, regardless of
whether or not a judgment was rendered on the merits of the action.

Restrictions on Certain Business Combinations

Pursuant to the Anti-Takeover Law, certain "business
combinations" with "interested stockholders" of Delaware
corporations are subject to a three-year moratorium unless specified conditions
are met. For a description of the Anti-Takeover Law, see "Description of
Capital Stock-Delaware's Anti-Takeover Law."

Although California law does not have a provision comparable to the Anti-
Takeover Law, it does require that holders of nonredeemable common stock receive
nonredeemable common stock in a merger of the corporation with a holder of more
than 50% but less than 90% of such common stock or such holder's affiliate,
unless all of the holders of such common stock consent to the transaction or it
is approved by the California Department of Corporations at a "fairness
hearing."  This provision of California law may have the effect of making a
"cash-out" merger by a majority stockholder more difficult to
accomplish.

California law also provides that, except in certain circumstances, when a
tender offer or a proposal for a reorganization or for a sale of assets is made
by an interested party (generally a controlling or managing party of the target
corporation), an affirmative opinion in writing as to the fairness of the
consideration to be paid to the stockholders must be delivered to stockholders.
Furthermore, if a tender of shares or vote is sought pursuant to an interested
party's proposal, and a later proposal is made by another party at least ten
days prior to the date for acceptance of the interested party proposal, then the
stockholders must be informed of the later offer and be afforded a reasonable
opportunity to withdraw any vote, consent or proxy, or to withdraw any tendered
shares.

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Classification of Board of Directors

California law provides that corporations that are listed on the New York
or American Stock Exchange or The Nasdaq National Market and have at least 800
stockholders may, with the approval of their board of directors and
stockholders, divide their board of directors into as many as three classes with
staggered terms of office, with only one class elected each year.  A corporation
must have at least six directors to divide its board of directors into two
classes and must have at least nine directors to classify its board of directors
into three classes.  Captiva does not have a classified board of directors.

Delaware law permits (but does not require) any corporation to classify its
board of directors and does not have a minimum board of directors size that is
required to classify the board of directors.

The certificate of incorporation and bylaws of ActionPoint presently do not
provide for a classified board of directors, although a classified board of
directors could be established following the merger with the approval of the
ActionPoint stockholders.

Size of Board of Directors

Under California law, the number of directors of a corporation may be
fixed in the articles of incorporation or bylaws of a corporation, or a limited
range may be established for the number of directors, with the board of
directors given authority to fix the exact number of directors within such
range.  The bylaws of Captiva establish the number of directors of Captiva to be
not less than four and not more than seven, and is currently set at seven.  The
provision setting forth the number of directors in the Captiva's bylaws may not
be amended to change the number of directors below four or above seven.

Under Delaware law, the number of directors of a corporation may be fixed or
changed by the board of directors acting alone, by amendment to the
corporation's bylaws, unless the directors are not authorized to amend the
bylaws or the number of directors is fixed in the certificate of incorporation,
in which cases stockholder approval is required.  The bylaws of ActionPoint
states that the number of directors that shall constitute the whole board shall
be determined by resolution of ActionPoint's board of directors or by the
stockholders at the annual meeting of the stockholders.  Immediately prior to
the merger, ActionPoint has agreed that Messrs. Finegan, van Overbeek and
Tompkins will resign from the ActionPoint board of directors and Messrs. Bish,
Berglund and Lavitt will be appointed to fill the vacancies on the ActionPoint
board of directors.  The certificate of incorporation and bylaws of ActionPoint
authorize the ActionPoint board of directors to amend the bylaws, and
accordingly a majority of ActionPoint's board of directors will have the ability
to change the authorized number of directors and appoint additional directors
without having such additional directors first elected by stockholders.  This
ability could have the effect of delaying or preventing a change in control of
ActionPoint.

Cumulative Voting for Directors

Under California law, stockholders of a California corporation may,
unless such corporation's articles of incorporation or bylaws expressly
eliminate cumulative voting, cumulate their votes in the election of directors
so long as at least one stockholder has given notice, prior to the voting, of
such stockholder's intent to cumulate his, her or its votes at the meeting.  The
articles of incorporation and bylaws of Captiva do not contain any provision
eliminating cumulative voting.

Stockholders of ActionPoint will not be entitled to cumulate their votes in
the election of directors.

Removal of Directors

Under California law, a director or the entire board of directors may be
removed, with or without cause, by the affirmative vote of the holders of a
majority of the securities entitled to vote, provided that no director of a
corporation whose board of directors is unclassified (such as Captiva) may be
removed (unless the entire board of directors is removed) if the votes cast
against such removal would be sufficient to elect the director in an election
involving cumulative voting.  A director of a corporation whose board of
directors is classified may not be removed if the votes cast against removal of
the director would be sufficient to elect the director if voted cumulatively
(without regard to whether shares may otherwise be voted cumulatively) at an
election at which the same total

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Under Delaware law, any director of a corporation without cumulative voting
and without a classified board of directors may be removed with or without cause
by holders of a majority of the shares then entitled to vote at an election of
directors.  In addition, a Delaware corporation that adopts a classified board
of directors has the option of allowing directors to be removed only for cause.

Board of Directors Vacancies

The bylaws of both ActionPoint and Captiva provide that vacancies on the
board of directors, including newly created directorships, may be filled by the
vote of a majority of directors then in office.  However, California law
prohibits directors from filling a vacancy on the board of directors created by
the removal of a director without cause unless such power is expressly granted
to the board of directors in a corporation's charter documents.  Captiva's
bylaws prohibit the board of directors from filling a vacancy caused by removal
of a director; such vacancy can only be filled by approval of the
stockholders.

Notice of Special Meetings of the Board of Directors

California law does not specify requirements with respect to the notice
period prior to a special meeting of the board of directors.  Under Captiva's
bylaws, notice of a special meeting of the board of directors must be given four
days prior to such a meeting, if the notice is delivered by mail, or 48 hours
prior to such a meeting, if the notice is delivered personally or by telephone
or telegraph.

Delaware law does not specify requirements with respect to the notice period
prior to a special meeting of the board of directors.  The bylaws of ActionPoint
require four days notice by mail or 48 hours notice delivered personally or by
telephone, telegraph, telex, mailgram or facsimile prior to such a special
meeting.

Special Stockholder Meetings; Stockholder Action by Written Consent

Under California law, special meetings of stockholders may be called by
the board of directors, the chairman of the board of directors, the president,
the holders of shares representing 10% or more of the outstanding voting power
of the corporation and such other persons as may be designated in the articles
of incorporation or bylaws.  The bylaws of Captiva authorize the president, the
chairman of the board, the board of directors, one or more members of the board
of directors or stockholders entitled to cast not less than 10% of the votes at
the meeting to call a special meeting.

Any action required or able to be taken at any meeting of Captiva
stockholders may be taken without a meeting, without prior notice, if a written
consent is signed by the holders of outstanding shares of Captiva stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted.  However, directors may not be elected except by
unanimous written consent of shares entitled to vote unless it is to fill a
vacancy caused by removal which requires the consent of a majority of the shares
entitled to vote.  Unless the consents of all stockholders entitled to vote have
been solicited in writing, prompt notice of the taking of any corporate action
which is approved by stockholders without a meeting by less than unanimous
written consent shall be given to those stockholders entitled to vote who have
not consented in writing.

Delaware law provides that special meetings of stockholders may be called by
a majority of the board of directors or by such persons as may be designated in
the certificate of incorporation or bylaws, and does not expressly provide
stockholders the right to call special meetings.  The bylaws of ActionPoint
currently provide that special meetings of stockholders may be called by the by
the president and shall be called by the president or secretary at the request
in writing of a majority of the board of directors.  The certificate of
incorporation of ActionPoint also provides that stockholders may not act by
written consent.

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Amendment of Certificate or Articles of Incorporation

Under both Delaware and California law, a corporation's certificate or
articles of incorporation may be amended only if such amendment is approved by
the board of directors and by a majority of the stockholders.  In addition,
under both Delaware and California law, if a corporation has more than one class
or series of stock outstanding, certain amendments that would affect the rights
of a particular class or series require the vote of a majority of the shares of
such class or series.

California and Delaware law permit corporations to impose
"supermajority" requirements (i.e., requirements of a vote of more
than a majority of the shares) for the amendment of certificates and articles of
incorporation.  Nevertheless, California law provides that, for a corporation
with outstanding shares held of record by 100 or more persons, such provision:
(i) cannot require a vote higher than 66 2/3%; (ii) must be approved by at least
as large a proportion of the outstanding shares as the supermajority provision
requires; and (iii) automatically expires after two years unless renewed
pursuant to a stockholder vote.  Delaware law contains no similar provision.

Amendment of Bylaws

Under California law, bylaws may be amended by stockholders holding a
majority of the outstanding shares or by the board of directors, except that if
the number or a range of directors is specified in the bylaws, this provision
can be changed only with the approval of the stockholders.  Stockholders can
adopt or amend bylaw provisions to limit the ability of the board of directors
to amend the bylaws.

Under Delaware law, the bylaws may be amended only by the stockholders,
unless the corporation's certificate of incorporation also confers the power to
amend the bylaws on the directors.  The certificate of incorporation authorizes
ActionPoint directors to amend the bylaws of ActionPoint.

Stockholder Vote for Mergers and Other Corporate Reorganizations

Generally, California law requires a stockholder vote in more situations
involving corporate mergers and other reorganizations than does Delaware law.
Both California and Delaware law generally provide for   stockholder votes of
both the acquiring and acquired corporation to approve mergers and of the
selling corporation in a sale of all or substantially all of its assets.

In addition to the foregoing, subject to certain exceptions, California law
also requires the affirmative vote of a majority of the outstanding shares
of:

- an acquiring corporation in share-for-share reorganizations;
- the acquiring and acquired corporations in sale-of-assets reorganizations;
and
- a parent corporation whose equity securities are being issued or transferred
in connection with certain corporate reorganizations (such as triangular
mergers).

Delaware law does not require the affirmative vote of a majority of the
outstanding shares for the foregoing transactions.  California law generally
requires a vote of all outstanding shares voting in the aggregate and by class
when a vote is required in connection with these transactions, whereas Delaware
law generally does not require class voting in connection with these
transactions.

Delaware law does not require a stockholder vote of the surviving corporation
in a merger (unless the corporation provides otherwise in its certificate of
incorporation) if:

- the merger agreement does not amend the existing certificate of
incorporation;
- each share of the surviving corporation outstanding before the merger is an
identical outstanding or treasury share after the merger; and
- the number of shares to be issued by the surviving corporation in the merger
does not exceed 20% of the shares outstanding immediately prior to the merger.

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California law contains a similar exception to its voting requirements for
mergers and other reorganizations where a corporation or its stockholders
immediately prior to the reorganization own immediately after the reorganization
more than 5/6ths of the voting power of the surviving or acquiring corporation,
or its parent.

Appraisal and Dissenters' Rights in Mergers and Reorganizations

Under both California and Delaware law, a dissenting stockholder of a
corporation engaging in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal rights. Appraisal rights permit a
stockholder to receive cash equal to the fair market value of such stockholder's
shares, in lieu of the consideration such stockholder would otherwise receive in
any such transaction.

Delaware law provides for dissenters' rights in certain mergers and
consolidations. However, such rights are not available with respect to:

- a merger or consolidation by a corporation, with respect to any class or
series of shares that are either listed on a national securities exchange or
held by more than 2,000 stockholders, if such stockholders receive shares of the
surviving corporation or of such a listed or widely-held corporation; or
- stockholders of a corporation surviving a merger if no vote of the
stockholders of the surviving corporation is required to approve the merger.

In general, California law does not afford dissenters' rights in share-for-
share reorganizations (except for those that do not result in the acquirer
gaining control of the other corporation) and sale-of-assets reorganizations,
and affords only limited dissenters' rights for mergers where a stockholder vote
is required if the shares are publicly traded.  See "The Merger-Appraisal
and Dissenters' Rights" on page 65.

Loans to Directors, Officers and Employees

Under California law, a corporation may make a loan to, or guarantee the
obligations of, directors or officers only if a majority of the disinterested
directors determines that such loan or guarantee may reasonably be expected to
benefit the corporation.

Under Delaware law, a corporation may make loans to, guarantee the
obligations of or otherwise assist its officers or other employees (including
those who are directors), and those of its subsidiaries, when such action, in
the judgment of the directors, may reasonably be expected to benefit the
corporation.

Inspection of Stockholder Lists

Both California and Delaware law allow any stockholder to inspect a
corporation's stockholder list for a purpose reasonably related to such person's
interest as a stockholder.

In addition, California law provides that stockholders holding 5% or more of
a corporation's shares, or who hold 1% or more of a corporation's shares after
it is a public company and has filed a Schedule 14A with the Securities and
Exchange Commission relating to the election of directors, have an absolute
right to inspect and copy the corporation's stockholder list.

Delaware law permits a stockholder to inspect the stockholder list during the
ten days preceding a stockholders' meeting for any purpose germane to the
meeting, but does not contain a provision comparable to the absolute right of
inspection provided by California law to certain stockholders.

Dividends

California law does not use the concepts of par value of shares, capital
or surplus.  The concepts of par value, capital and surplus are retained under
Delaware law.

Under California law, any distribution of corporate assets to stockholders
(including dividends and repurchases of shares) are limited either to:

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- retained earnings; or
- an amount that would leave the corporation with assets (exclusive of
goodwill, capitalized research and development expenses and deferred charges)
equal to at least 11⁄4  times its liabilities (not including deferred taxes,
deferred income and other deferred credits) and with current assets, as defined,
at least equal to its current liabilities (or 1 1/4 times its current
liabilities if the average pretax and pre-interest earnings for the preceding
two fiscal years were less than the average interest expense for such years).

There are exceptions to the foregoing rules for repurchases pursuant to
employee stock plans. Additionally, a corporation cannot make a distribution if,
as a result of such distribution, the corporation would likely be unable to meet
its liabilities as they come due or if such distribution would impair certain
preference rights of the holders of preferred stock.

Delaware law permits the payment of dividends out of surplus (generally
defined as stockholders' equity less the par value of outstanding stock) or, if
there is no surplus, out of net profits for the current fiscal year and/or the
preceding fiscal year.  Delaware law generally provides that a corporation may
redeem or repurchase its shares only if such redemption or repurchase would not
impair the capital of the corporation.

Interested Director Transactions

Under both California and Delaware law, certain contracts or transactions
in which one or more of a corporation's directors has an interest are not void
or voidable because of such interest, provided certain conditions are met.  With
certain exceptions, the conditions are similar under California and Delaware
law.  Under California and Delaware law:

- either the stockholders or the board of directors must approve any such
contract or transaction after full disclosure of the material facts, and, in the
case of board of directors approval, the contract or transaction must also be
"just and reasonable" in California or "fair" in Delaware to
the corporation; or
- the contract or transaction must have been just and reasonable or fair, as
applicable, to the corporation at the time it was approved.  In the latter case,
California law explicitly places the burden of proof on the interested director.

Under California law, if stockholder approval is sought, the interested
director is not entitled to vote his or her shares at a stockholder meeting or
by written consent with respect to any action regarding such contract or
transaction.  If the approval of the board of directors is sought, the contract
or transaction must be approved by a majority vote of a quorum of the directors,
without counting the vote of any interested directors (except that interested
directors may be counted for purposes of establishing a quorum).

Under Delaware law, if board of directors approval is sought, the contract or
transaction must be approved by a majority of the disinterested directors (even
though less than a majority of a quorum).

Notice of Board of Directors Nominations and Other Stockholder Business-
Annual Meetings

The bylaws of ActionPoint require that nominations of persons for
election to the board of directors and the proposal of business to be considered
at an annual meeting of stockholders must be made:

- by the board of directors; or
- if by a stockholder, by advance written notice received by the secretary
between 10 and 60 days prior to any meeting of stockholders called for the
election of stockholders.

In addition, certain other information regarding a board of directors'
nominee or the business proposed for discussion must be included in the
stockholder's notice to ActionPoint.

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Notice of Board of Directors Nominations and Other Stockholder Business-
Special Meetings

ActionPoint's bylaws also provide that, at special meetings of
stockholders, the only business that can be conducted will be the items of
business set forth in notice of such special meeting.

Derivative Suits

California law provides that a stockholder bringing a derivative action
on behalf of a corporation need not have been a stockholder at the time of the
transaction in question, provided that certain tests are met.

Under Delaware law, a stockholder may only bring a derivative action on
behalf of the corporation if the stockholder was a stockholder of the
corporation at the time of the transaction in question or the stockholder's
stock thereafter devolved upon the stockholder by operation of law.

California law also provides that the corporation or the defendant in a
derivative suit may make a motion to the court for an order requiring the
plaintiff stockholder to furnish a security bond.  Delaware does not have a
similar bond requirement.

Dissolution

Under California law, stockholders holding 50% or more of the total
voting power may authorize a corporation's dissolution, with or without the
approval of the corporation's board of directors, and this right may not be
modified by the articles of incorporation.

Under Delaware law, unless the board of directors approves the proposal to
dissolve, the dissolution must be unanimously approved by all stockholders
entitled to vote.  A dissolution initiated by the board of directors only
requires the approval of a majority of the corporation's stockholders.  In the
event of such a board of directors-initiated dissolution, Delaware law allows a
Delaware corporation to include in its certificate of incorporation a
supermajority-voting requirement in connection with dissolutions. ActionPoint's
certificate of incorporation does not contain such a requirement.

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OTHER STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF
ACTIONPOINT STOCKHOLDERS

Proposal to Elect Directors

The nominees for the board of directors are set forth below.  The proxy
holders intend to vote all proxies received by them in the accompanying form for
the nominees for directors listed below.  In the event any nominee is unable or
declines to serve as a director at the time of the 2002 annual meeting, the
proxies will be voted for any nominee who shall be designated by the present
board of directors to fill the vacancy.  In the event that additional persons
are nominated for election as directors, the proxy holders intend to vote all
proxies received by them for the nominees listed below.  As of the date of this
joint proxy statement/prospectus, the ActionPoint board of directors is not
aware of any nominee who is unable or will decline to serve as a director.

Nominees to Board of Directors:

`Director
Name                                Since      Age
--------------------------------  --------- ---------
Patrick L. Edsell...............      2001        53
John Finegan....................      1997        52
Kimra D. Hawley.................      1998        45
Stephen S. Francis..............      2001        40
Bruce Silver....................      1995        53
Daniel D. Tompkins..............      1992        61
Thomas T. van Overbeek..........      1988        52`

Daniel D. Tompkins.

Thomas T. van Overbeek.  Mr. van Overbeek has served on the board of
directors of ActionPoint since 1988.  Mr. van Overbeek served as the chairman of
the board of directors from 1998 to June 2001.  From 1990 to 1998, Mr. van
Overbeek was the Chief Executive Officer of ActionPoint and, from 1988 to 1990,
the President.  Mr. Van Overbeek is currently Chief Executive Officer of
Shoretel Communications.  From 1998 to 2000, Mr. van Overbeek served as Chief
Executive Officer of Wavtrace, Inc.  Mr. Van Overbeek is married to Ms. Hawley,
the chairman of the board of directors of ActionPoint.

For information regarding the remaining nominees for director, Ms. Hawley and
Messrs. Edsell, Finegan, Francis and Silver, see "Information Concerning
the Combined Company--Management of the Combined Company After the Merger" on page
137 and for additional information regarding the operation of the ActionPoint
board of directors and its standing committees, see ActionPoint's annual report
for the year ended December 31, 2001 which is incorporated herein by reference.

If the merger is approved, ActionPoint has agreed that Messrs. Finegan,
Tompkins and van Overbeek will resign and their successors, Reynolds Bish, Mel
Lavitt and Jim Berglund, current members of Captiva's board of directors, will
be elected as members of the ActionPoint board of directors in connection with
the merger.

For information regarding stockholder return, a comparison of the cumulative total
return of ActionPoint's common stock over a five year period beginning from December 31, 1996
through the fiscal year ended December 31, 2001 is provided in the section entitled
"Information Concerning ActionPoint-Comparison of ActionPoint Stockholder Return" on
page 111.

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Recommendation of the Board of Directors.  The board of directors
recommends that the stockholders vote FOR the election of each of the
above nominees.

Proposal to Ratify the Selection of ActionPoint's Independent Public
Accountants

The firm of PricewaterhouseCoopers LLP served as independent public
accountants for ActionPoint for the fiscal year ended December 31, 2001.  The
board of directors desires the firm to continue in this capacity for the current
fiscal year.  Accordingly, a resolution will be presented to the meeting to
ratify the selection of PricewaterhouseCoopers LLP by the board of directors as
independent public accountants to audit the accounts and
records of ActionPoint
for the fiscal year ending December 31, 2002, and to perform other appropriate
services.  In the event that stockholders fail to ratify the selection of
PricewaterhouseCoopers LLP, the board of directors would reconsider such
selection.  Even if the selection is ratified, the board of directors in its
discretion may direct the appointment of a different independent auditing firm
at any time during the year if the board of directors believes that such a
change would be in the best interests of ActionPoint and its stockholders.

A representative of PricewaterhouseCoopers LLP will be present at the annual
meeting to respond to appropriate questions and to make a statement if such
representative desires to do so.

Recommendation of the Board of Directors.  The board of directors
recommends that the stockholders vote FOR the ratification of the
selection of PricewaterhouseCoopers LLP to serve as ActionPoint's independent
public accountants for the fiscal year ending December 31, 2002.

Proposal to Amend and Restate ActionPoint's Employee Stock Purchase
Plan

ActionPoint is asking its stockholders to vote on a proposal to amend its
1998 employee stock purchase plan, or ESPP, by:

- increasing the number of shares reserved for issuance under the ESPP during
each six-month purchase period from 50,000 to 150,000, and
- adding a provision under which the total number of shares reserved for
issuance under the ESPP will automatically be restored to 150,000 on
July 1, 2002, and to 300,000 on January 1 of each subsequent
year.

The board of directors adopted the ESPP in March of 1998 to offer the
employees of ActionPoint an opportunity to purchase common stock through payroll
deductions.  The principal provisions of the ESPP are summarized below.  The
summary, however, does not purport to be a complete description of the ESPP.
Any stockholder who would like a copy of the plan text may request one by
writing to the corporate secretary at ActionPoint's principal office in San
Jose.

Summary of ESPP.  The ESPP became effective on July 1, 1998, and
replaced an employee stock purchase plan that ActionPoint had maintained since
1993.  As of May 31, 2002, a total of 50,000 shares remain available for
issuance under the ESPP, and it is expected that all or most of these shares
will be issued to participants on June 30, 2002.  On July 1, 2002, the
number of available shares will be increased to 150,000, if the stockholders
approve the proposal to amend the ESPP.  On January 1 of each year,
starting on January 1, 2003, the number of available shares will
automatically be restored to 300,000, if the stockholders approve the proposal.
In the past, the ESPP limited to 50,000 the aggregate number of shares that
could be issued during each six-month purchase period, but ActionPoint is asking
the stockholders to approve an increase of this limit to 150,000 shares.  The
increase in the number of available shares is needed to accommodate the
additional participants that are expected to enroll in the ESPP as a result of
the merger with Captiva.

All employees who work more than 20 hours per week and more than five months
per year, and who have completed at least 30 days of service, are eligible to
participate in the ESPP.  The number of eligible employees was approximately 125
before the merger with Captiva and is expected to increase to approximately 250
after the closing of the merger.  Eligible employees may contribute up to 10% of
their base salaries to the ESPP.  Amounts withheld are used at the end of every
six-month purchase period to buy shares of common stock, but not more than 1,000
shares per participant per purchase period.  The value of the common stock
(determined as of the beginning of the 24-month offering period) that may be
purchased by any participant in a calendar year is limited to $25,000.  The

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The purchase price is equal to 85% of the lower of (a) the market price
of common stock immediately before the beginning of the applicable offering
period or (b) the market price of common stock at the time of the purchase.
In general, each offering period is 24 months long, but a new offering period
begins every six months.  Thus up to four overlapping offering periods may be in
effect at the same time.  An offering period continues to apply to a participant
for the full 24 months, unless the market price of common stock is lower when a
subsequent offering period begins.  In that event, the subsequent offering
period automatically becomes the applicable period for purposes of determining
the purchase price.

The board of directors may amend any provision of the ESPP.  Amendments do
not require stockholder approval, unless ActionPoint increases the aggregate
number of shares of common stock available for purchase under the ESPP.  The
ESPP will terminate on December 31, 2021, unless ActionPoint extends it
with the approval of the stockholders.  The board of directors may also
terminate the ESPP at any earlier time.

New Plan Benefits.  Since purchase rights are subject to discretion,
including an employee's decision not to participate in the ESPP, awards under
the ESPP for the current fiscal year are not determinable.  No purchase rights
have been granted to date under the ESPP with respect to the increase in the
ESPP's reserve that ActionPoint is submitting to the stockholders for
approval.

Federal Income Tax Consequences.  The following is a general
description of certain federal income tax consequences of the ESPP.  This
description does not purport to be complete.

The ESPP is intended to qualify as an "employee stock purchase
plan" under section 423 of the Internal Revenue Code.  A participant
does not need to recognize any taxable income when he or she enrolls in the
ESPP.  Likewise, a participant does not need to recognize any taxable income
when purchasing shares, even though the purchase price reflects a discount from
the market value of the shares at that time.

A participant must recognize taxable income on a disposition of shares
acquired under the ESPP.  The tax treatment may be more favorable if the
participant disposes of the shares after meeting the holding period requirements
of section 423.  To satisfy the holding period requirements, a participant
may not dispose of the shares within two years after the first day of the
offering period during which he or she purchased the shares or within one year
after purchasing the shares.  If both holding periods are met, the participant
recognizes ordinary income equal to the lower of (a) the excess of the fair
market value of the shares on the date of the disposition over the purchase
price or (b) 15% of the fair market value of the shares on the first day of
the applicable offering period.  ActionPoint will not be entitled to any
deduction under these circumstances.  The excess, if any, of the fair market
value of the shares on the date of the disposition over the sum of the purchase
price plus the amount of ordinary income recognized (as described above) will be
taxed as a long-term capital gain.  If a taxable disposition produces a loss
(i.e., the fair market value of the shares on the date of the disposition is
less than the purchase price) and the disposition involves certain unrelated
parties, then the loss will be a capital loss.

If a participant disposes of shares without meeting the holding-period
requirements, then the entire difference between the purchase price and the
market value of the shares on the date of purchase will be taxed as ordinary
income in the year of disposition.  ActionPoint will be entitled to a deduction
for the same amount, subject to certain conditions.  The excess, if any, of the
market value of the shares on the date of disposition over their market value on
the date of purchase will be taxed as a capital gain (long-term or short-term,
depending on how long the shares have been held).  If the value of the shares on
the date of disposition is less than their value on the date of purchase, then
the difference will result in a capital loss (long-term or short-term, depending
on the holding period), provided the disposition involves certain unrelated
parties.  Any such loss will not affect the ordinary income recognized upon the
disposition.

Recommendation of the Board of Directors.  The board of directors
recommends that the stockholders vote FOR the approval of the amendments
to the ESPP.

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Proposal to Amend ActionPoint's 1993 Stock Option/Stock
Issuance Plan

ActionPoint is asking its stockholders to vote on a proposal to amend its
1993 stock option/stock issuance plan, or the 1993 option plan, by:

- increasing from 10,000 to 20,000 the number of shares of ActionPoint common
stock that will be subject to the initial option granted to new non-employee
directors of ActionPoint who become directors after (a) the merger of
ActionPoint and Captiva and the election of the three Captiva directors to
ActionPoint's board of directors or (b) the termination of the merger agreement;
and
- increasing from 2,500 to 5,000 the number of shares of ActionPoint common
stock that will be subject to the annual option granted to non-employee
directors of ActionPoint.

The board of directors adopted the 1993 option plan in September 1993 to,
among other things, encourage the attraction and retention of employees and non-
employee directors with exceptional qualifications and to link employees and
non-employee directors interests directly to stockholder interests through
increased stock ownership.

Summary of the 1993 Option Plan.  The principal terms and provisions
of the 1993 option plan are summarized below.  The summary, however, does not
purport to be a complete description of all the provisions of the 1993 option
plan.  Any stockholder of ActionPoint who wishes to obtain a copy of the actual
plan document may do so by written request to the corporate secretary at
ActionPoint's principal executive offices in San Jose.

Structure.  The 1993 option plan includes three separate equity
incentive programs:

- a discretionary option grant program, under which eligible individuals may
be granted options to purchase shares of ActionPoint common stock at an exercise
price not less than 85% of their fair market value on the grant date;
- an automatic option grant program, under which option grants will
automatically be made to eligible non-employee members of ActionPoint's board of
directors to purchase shares of ActionPoint common stock at an exercise price
equal to their fair market value on the grant date; and
- a stock issuance program, under which eligible individuals may be issued
shares of ActionPoint common stock directly, through the immediate purchase of
the shares or as a bonus tied to the performance of services or ActionPoint's
attainment of financial objectives.

Options granted under the discretionary option grant program may be either
incentive stock options designed to meet the requirements of Section 422 of the
Internal Revenue Code or non-statutory options not intended to satisfy these
requirements. All grants under the automatic option grant program will be non-
statutory options.

Securities Subject to the 1993 Option Plan.  3,274,852 shares of
ActionPoint common stock have been reserved for issuance over the term of the
1993 option plan.  As of May 31, 2002, additional options could be granted and
issuances of stock could be made for up to an aggregate of 388,267 shares of
ActionPoint common stock under the 1993 option plan.

Shares of ActionPoint common stock will be drawn from either ActionPoint's
authorized but unissued shares of common stock or from reacquired shares of
ActionPoint common stock, including shares repurchased by ActionPoint on the
open market.  Should an option expire or terminate for any reason prior to
exercise in full, the shares subject to the portion of the option not so
exercised will be available for subsequent issuance under the 1993 option plan.
Likewise, if shares issued under the 1993 option plan are forfeited, those
shares again become available for non-statutory option grants or direct
issuances (but not for incentive stock option grants).

No individual participating in the 1993 option plan may be granted stock
options for more than 500,000 shares of ActionPoint common stock in the
aggregate over the term of the 1993 option plan, exclusive of option grants made
prior to January 1, 1996.

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Securities Subject to Other Option Plans.  In addition to shares
available under the 1993 option plan, 700,000 shares of ActionPoint common stock
have been reserved for issuance under ActionPoint's 1999 stock option plan, or
1999 option plan.  As of May 31, 2002, additional options could be
granted and issuances of restricted stock could be made for up to an aggregate
of 105,977 shares of ActionPoint common stock under the 1999 option plan.
ActionPoint's employees and consultants are eligible for awards under the 1999
option plan as long as they are not members of ActionPoint's board of directors
or officers.

Plan Administration.  The discretionary option grant program and stock
issuance program may be administered by a committee that is comprised of two or
more non-employee members of ActionPoint's board of directors who are appointed
by the ActionPoint board of directors.  These programs are currently
administered by ActionPoint's compensation committee.  The compensation
committee generally has discretion under the provisions
of the 1993 option plan
to authorize stock option grants and direct stock issuances.  The 1993 option
plan may also be administered with respect to participants who are not directors
or officers by a secondary committee comprised of one or more members of
ActionPoint's board of directors.  All grants under the automatic option grant
program will be made in compliance with the provisions of the program, and no
administrative discretion may be exercised with respect to the automatic
grants.

The compensation committee has full authority, subject to the provisions of
the 1993 option plan, to determine the eligible individuals who are to receive
grants under the 1993 option plan and stock awards under the stock issuance
program, the number of shares to be covered by each granted option and stock
award, the date or dates on which each option is to become exercisable, the
maximum term for which each option is to remain outstanding, whether a granted
option will be an incentive stock option that satisfies the requirements of
section 422 of the Code or a non-statutory option not intended to meet such
requirements, and the remaining provisions of the option grant or stock
issuance.

Eligibility.  Officers and other employees, non-employee members of
the ActionPoint board of directors, and consultants and advisors to ActionPoint
or any parent or subsidiary corporation of ActionPoint are eligible to
participate in the discretionary option grant and stock issuance programs.  Only
non-employee members of ActionPoint's board of directors who were never employed
by ActionPoint may participate in the automatic option grant program.

As of May 31, 2002, it was estimated that 6 executive officers and
approximately 124 other employees were eligible to participate in the 1993
option plan and 3 non-employee members of ActionPoint's board of directors were
eligible to participate in the automatic option grant program.

Valuation.  The fair market value per share of ActionPoint common
stock on any relevant date under the 1993 option plan will be the closing price
per share on that date on The Nasdaq National Market.  If there is no reported
closing price for such date, then the fair market value will be the closing
price for the last previous date for which a quotation exists.

Discretionary Option Grant Program.

Price and Exercisability.  Under the discretionary option grant program,
the exercise price per share of ActionPoint common stock subject to an incentive
stock option may not be less than 100% of the fair market value per share on the
grant date.  The exercise price per share of the ActionPoint common stock
subject to a non-statutory option may not be less than 85% of the fair market
value of that security on the grant date, except that grants intended to be
exempt from the $1 million limitation on compensation deductions will be made at
100% of fair market value.  No option will have a maximum term in excess of ten
years measured from the grant date.  The compensation committee has discretion
to grant options that are immediately exercisable for vested or unvested shares
or that become exercisable in installments for vested shares over the optionee's
period of service.

The exercise price may be paid in cash or in shares of ActionPoint common
stock valued at fair market value on the exercise date.  Options may also be
exercised through a same-day sale program, pursuant to which a designated
brokerage firm is to effect the immediate sale of the shares purchased under the
option and pay over to ActionPoint, out of the sale proceeds on the settlement
date, sufficient funds to cover the exercise price for the purchased shares plus
all applicable withholding taxes.  The compensation committee may also assist
any optionee

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The compensation committee has the authority to effect, on one or more
separate occasions, the cancellation of outstanding options under the
discretionary option grant program (including outstanding options incorporated
from the predecessor plans) and to issue replacement options with an exercise
price based on the market price of ActionPoint common stock at the time of the
new grant.

Termination of Service.  Any option held by the optionee at the time
of cessation of service will normally not remain exercisable beyond a limited
period to be designated by the compensation committee at the time of the option
grant.  During that period, the option will generally be exercisable only for
the number of shares in which the optionee is vested at the time of cessation of
service.  Under no circumstances, however, may any option be
exercised after the
specified expiration date of the option term. The compensation committee may
extend the period following the optionee's cessation of service during which his
or her outstanding options may be exercised and/or accelerate the exercisability
of such options in whole or in part at any time while the options remain
outstanding.

Any unvested shares of ActionPoint common stock will be subject to repurchase
by ActionPoint, at the original exercise price paid per share, upon the
optionee's cessation of service prior to vesting in those shares.  The
compensation committee will have complete discretion in establishing the vesting
schedule for any such unvested shares and has full authority to cancel
ActionPoint's outstanding repurchase rights with respect to those shares in
whole or in part at any time.

Incentive Stock Options. Incentive stock options may only be granted
to individuals who are employees of ActionPoint or its parent or subsidiary
corporations.  During any calendar year, the aggregate fair market value of the
Common Stock for which one or more options granted to any employee under the
1993 option plan or any other option plan of ActionPoint may for the first time
become exercisable as incentive stock options cannot exceed $100,000.

Automatic Option Grant Program.  Under the automatic option grant
program, each individual who becomes a non-employee member of ActionPoint's
board of directors, whether through election by ActionPoint's stockholders or
appointment by the ActionPoint's board of directors, will automatically be
granted at the time of such election or appointment an initial non-statutory
option to purchase 10,000 shares of ActionPoint common stock.  If the proposal
to amend the 1993 option plan is approved, each individual who becomes a non-
employee member of ActionPoint's board of directors, whether through election by
ActionPoint's stockholders or appointment by the ActionPoint's board of
directors, will automatically be granted at the time of such election or
appointment an initial non-statutory option to purchase 20,000 shares of
ActionPoint common stock.  However, the two Captiva directors who will be
elected to ActionPoint's board of directors as non-employee directors in
connection with the merger of ActionPoint and Captiva will not be eligible for
initial option grants.

Annually, on the date of each annual stockholders meeting, each individual
who is then serving as a non-employee member of ActionPoint's board of
directors, whether or not standing for re-election at that meeting, will
automatically be granted a non-statutory option to purchase 2,500 shares of
ActionPoint common stock, provided such individual has served as a member of the
board of directors for at least six months.  If the proposal to amend the 1993
option plan is approved, then annually on the date of each annual stockholders
meeting, commencing with the meeting for which this proxy statement is issued,
each individual who is then serving as a non-employee member of ActionPoint's
board of directors, whether or not standing for re-election at that meeting,
will automatically be granted a non-statutory option to purchase 5,000 shares of
ActionPoint common stock, provided such individual has served as a member of the
board of directors for at least six months.  No non-employee Board member who
has previously been in the employ of ActionPoint or any parent or subsidiary
corporation will be eligible to receive an automatic option grant.

The exercise price per share of the common stock subject to an automatic
option grant will equal the fair market value per share of common stock on the
automatic grant date.  Each option will have a term of ten years measured from
the grant date.  Each initial option grant will become exercisable for the
option shares in a series of four equal annual installments over the first four
years of the optionee's period of board service.  Each annual option grant will
become exercisable for the option shares on the fourth anniversary of the
automatic grant date provided the optionee continues to serve on the board.  The
option will remain exercisable for a three-month period following

177

---

Each automatic option grant will become exercisable in full upon the
occurrence of certain changes in control or ownership of ActionPoint.  Upon the
successful completion of a hostile tender offer for securities possessing more
than 50% of the combined voting power of ActionPoint's outstanding securities,
each automatic option grant
that has been outstanding for at least 6 months may
be surrendered to ActionPoint for a cash distribution per surrendered option
share in an amount equal to the excess of the price per share of Common Stock
paid in such tender offer over the exercise price payable for such share.

Stock Issuance Program.  Shares may be sold under the stock issuance
program for cash or a promissory note payable to ActionPoint, or as a bonus for
past services. Shares issued under the stock issuance program may either be
vested upon issuance or subject to a vesting schedule tied to the participant's
period of service or the attainment of designated performance goals.  Unvested
shares are subject to certain transfer restrictions and to repurchase or
cancellation by ActionPoint upon either the participant's cessation of service
prior to vesting in those shares or the non-attainment of the applicable
performance goals.  The compensation committee has discretion to accelerate the
vesting of any issued shares in whole or in part at any time. Individuals
holding shares under the stock issuance program have full stockholder rights
with respect to those shares, whether the shares are vested or unvested.

General Provisions.

Option/Vesting Acceleration.  Outstanding options under the 1993 option
plan may become immediately exercisable in full, and unvested shares issued
under the 1993 option plan may become fully vested, in the event of certain
changes in the ownership or control of ActionPoint.  A change in control is a
change in ownership or control of ActionPoint effected through any of the
following transactions:

- the sale, transfer or other disposition of all or substantially all of
ActionPoint's assets in complete liquidation or dissolution of ActionPoint;
- any merger in which securities possessing more than 50% of the total
combined voting power of ActionPoint's outstanding securities are transferred to
a person or persons different from those who held such securities immediately
prior to the merger;
- any person or related group of persons (other than ActionPoint or a person
that directly or indirectly controls, is controlled by, or is under common
control with, ActionPoint) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Act of 1934, as
amended) of securities possessing more than 50% of the total combined voting
power of ActionPoint's outstanding securities; or
- a change in the composition of ActionPoint's board of directors over a
period of 36 consecutive months or less such that a majority of the board
members (rounded up to the next whole number) ceases, by reason of one or more
contested elections for board membership, to be comprised of individuals who
either (a) have been board members continuously since the beginning of such
period or (b) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (a) who were still in office at the time such election or nomination was
approved by the Board.

The acceleration of options or vesting of shares in the event of a change in
control may be seen as an anti-takeover provision and may have the effect of
discouraging a merger proposal, a takeover attempt or other efforts to gain
control of ActionPoint.

178

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Changes in Capitalization.  In the event any change is made to the
outstanding shares of ActionPoint common stock by reason of any
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares or other change in corporate structure effected without ActionPoint's
receipt of consideration, appropriate adjustments will be made to:

- the maximum number and/or class of securities issuable under the 1993 option
plan;
- the maximum number and/or class of securities for which any one individual
may be granted stock options in the aggregate over the term of the 1993 option
plan;
- the number and/or class of securities and price per share in effect under
each outstanding option; and
- the number and/or class of securities for which automatic option grants will
subsequently be made under the automatic option grant program to each non-
employee member of ActionPoint's board of directors.

Special Tax Election.  The compensation committee may provide one or
more holders of non-statutory options or unvested shares under the discretionary
option grant or stock issuance program with the right to have ActionPoint
withhold a portion of the shares of its common stock otherwise issuable to such
individuals in satisfaction of the Federal, state and local income and
employment tax liability incurred by such individuals in connection with the
exercise of those options or the vesting of the shares.  Alternatively, the
compensation committee may allow such individuals to deliver previously acquired
shares of ActionPoint common stock in payment of such tax liability.

Amendment and Termination.  ActionPoint's board of directors may amend
or modify the 1993 option plan in any or all respects whatsoever.  However, no
such amendment may adversely affect the rights of existing optionees or holders
of unvested shares without their consent. The approval of ActionPoint's
stockholders is required only to the extent prescribed by applicable law.

New Plan Benefits. If the proposal to amend the 1993 option plan is
approved by the ActionPoint stockholders, each of Messrs. Edsell, Silver and
Tompkins will receive an option grant to purchase 5,000 shares under the
automatic option grant program on the date of the 2002 annual meeting with an
exercise price per share equal to the closing price per share of ActionPoint
common stock on the date of the 2002 annual meeting.  If the proposal to amend
the 1993 option plan is not approved, those directors will instead only receive
a grant to purchase 2,500 shares.

Federal Income Tax Consequences of Options Granted under the 1993 Option
Plan.  Options granted under the 1993 option plan may be either incentive
stock options that satisfy the requirements of Section 422 of the Internal
Revenue Code or non-statutory options that are not intended to meet such
requirements.  The Federal income tax treatment for the two types of options
differs as follows:

Incentive Stock Options.  No taxable income is recognized by the
optionee at the time of the option grant, and no taxable income is generally
recognized at the time the option is exercised.  However, the amount by which
the fair market value (at the time of exercise) of the purchased shares exceeds
the exercise price paid for those shares will constitute an adjustment to income
for purposes of the alternative minimum tax.  The optionee will, however,
recognize taxable income in the year in which the purchased shares are sold or
otherwise made the subject of disposition.  For Federal tax purposes,
dispositions are divided into two categories: qualifying and disqualifying. The
optionee will make a qualifying disposition of the purchased shares if the sale
or other disposition of such shares is made after the optionee has held the
shares for more than 2 years after the grant date of the option and more than 1
year after the exercise date.  If the optionee fails to satisfy either of these
2 holding periods prior to the sale or other disposition of the purchased
shares, then a disqualifying disposition will result.

Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of the amount realized
upon the sale or other disposition of the purchased shares over the exercise
price paid for such shares.  If there is a disqualifying disposition of the
shares, then generally the excess of the fair market value of those shares on
the date the option was exercised over the exercise price paid for the shares
will be taxable as ordinary income.  Any additional gain recognized upon the
disposition will be a capital gain.

179

---

If the optionee makes a disqualifying disposition of the purchased shares,
then ActionPoint will be entitled to an income tax deduction for the taxable
year in which such disposition occurs equal to the amount of ordinary income
recognized by the optionee.  In no other instance will ActionPoint be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
ActionPoint anticipates that any compensation deemed paid by ActionPoint upon
one or more disqualifying dispositions of incentive stock option shares by
ActionPoint's executive officers will remain deductible by ActionPoint and will
not have to be taken into account for purposes of the $1 million limitation per
covered individual on the deductibility of the compensation paid to certain
executive officers of ActionPoint.

Non-Statutory Options. No taxable income is recognized by an optionee
upon the grant of a non-statutory option.  The optionee will in general
recognize ordinary income in the year in which the option is exercised equal to
the excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and, if the optionee is an employee
or former employee, the optionee will be required to satisfy the tax withholding
requirements applicable to such income.

ActionPoint will be entitled to a business expense deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised non-statutory option. The deduction will in general be allowed for the
taxable year of ActionPoint in which such ordinary income is recognized by the
optionee. ActionPoint anticipates that the compensation deemed paid by
ActionPoint upon the exercise of non-statutory options with exercise prices
equal to the fair market value of the option shares on the grant date will
remain deductible by ActionPoint and will not have to be taken into account for
purposes of the $1 million limitation per covered individual on the
deductibility of the compensation paid to certain executive officers of
ActionPoint.

Stock Issuances.  The tax principles applicable to direct stock
issuances under the 1993 option plan will be substantially the same as those
summarized above for the exercise of nonstatutory option grants.

Recommendation of the Board of Directors.  The board of directors
recommends that the stockholders vote FORthe approval of the amendment
to the 1993 option plan.

Other Matters

ActionPoint's management does not know of any matters to be presented at
the ActionPoint 2002 annual meeting other than those set forth herein and in the
notice contained in this joint proxy statement/prospectus.



Other Matters

ActionPoint's management does not know of any matters to be presented at
the ActionPoint 2002 annual meeting other than those set forth herein and in the
notice accompanying this joint proxy statement/prospectus.

180

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STOCKHOLDER PROPOSALS FOR ACTIONPOINT'S 2003 ANNUAL MEETING OF
STOCKHOLDERS

Stockholder proposals intended to be considered at the 2003 annual
meeting of stockholders must be received by ActionPoint no later than December
21, 2002.  The proposal must be mailed or hand delivered to ActionPoint's
principal executive offices at 1299 Parkmoor Avenue, San Jose, California 95126,
Attention: Corporate Secretary.  Such proposals may be included in next year's
proxy statement if they comply with certain rules and regulations promulgated by
the Securities and Exchange Commission.

LEGAL MATTERS

The validity of the shares of ActionPoint common stock to be issued in
connection with the merger will be passed upon for ActionPoint by Gunderson
Dettmer Stough Villeneuve Franklin & Hachigian, LLP, Waltham, Massachusetts.
Legal matters pertaining to federal income tax consequences in connection with
the merger will be passed upon for Captiva by Cooley Godward LLP, and for
ActionPoint by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP, Waltham, Massachusetts.

EXPERTS

The consolidated financial statements of ActionPoint, Inc. incorporated
by reference in the Annual Report to Shareholders of ActionPoint, Inc. for the year ended
December 31, 2001 in this joint proxy statement/prospectus have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements of Captiva Software Corporation as of
December 31, 2001 and 2000 and for each of the three years in the period ended
December 31, 2001 included in this joint proxy statement/prospectus have been so
included in reliance on the report (which contains an explanatory paragraph
relating to Captiva's ability to continue as a going concern as described in
Note 2 to the consolidated financial statements) of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as
experts in auditing and accounting.

WHERE YOU CAN FIND MORE ACTIONPOINT INFORMATION

ActionPoint has filed a registration statement on Form S-4 with the
Securities and Exchange Commission to register the ActionPoint common stock to
be issued in the merger. This joint proxy statement/prospectus is a part of the
ActionPoint registration statement and constitutes a prospectus of ActionPoint
in addition to being a proxy statement of Captiva for its special meeting and a
proxy statement for ActionPoint for its 2002 annual meeting. The registration
statement, including the attached annexes, exhibits and schedules, contains
additional relevant information about ActionPoint and Captiva. As allowed by
Securities and Exchange Commission rules, this joint proxy statement/prospectus
does not contain all the information you can find in the ActionPoint
registration statement or the exhibits to the ActionPoint registration
statement.

In addition, ActionPoint is subject to the informational reporting
requirements of the Securities Exchange Act of 1934, as amended.  In accordance
with the Exchange Act, ActionPoint files annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other information
that ActionPoint files with the Securities and Exchange Commission at the
Securities and Exchange Commission's public reference room at 450 Fifth Street,
N.W., Washington, D.C.  20549. You may obtain information on the operation of
the public reference room by calling the Securities and Exchange Commission at
1-800-SEC-0330.  The Securities and Exchange Commission maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Securities and
Exchange Commission, such as ActionPoint, at http://www.sec.gov.

The Securities and Exchange Commission allows ActionPoint to
"incorporate by reference" information into this joint proxy
statement/prospectus, which means that ActionPoint can disclose important
information to you by referring you to another document filed separately with
the Securities and Exchange Commission and/or delivering that document to you. The
ActionPoint information incorporated by reference is deemed to be part of this
joint

181

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This joint proxy statement/prospectus incorporates by reference ActionPoint's
current report on Form 8-K, filed with the Securities and Exchange Commission on
March 20, 2002,  ActionPoint's annual report for the year
ended December 31, 2001 and ActionPoint's quarterly report on Form 10-Q for the period
ended March 31, 2002. Copies of the annual report and Form 10-Q are included with
the delivery of  this joint proxy statement/prospectus.

ActionPoint is also incorporating by reference all additional documents that
it files with the Securities and Exchange Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of
this joint proxy statement/prospectus and the date of ActionPoint's 2002 annual
meeting, copies of which will be delivered to recipients of this joint proxy
statement/prospectus if they are filed prior to the date of the meeting of
ActionPoint's stockholders or Captiva's stockholders.

You can obtain the documents incorporated by reference from ActionPoint or
the Securities and Exchange Commission.  Documents incorporated by reference are
available from ActionPoint, without charge, excluding exhibits unless those
exhibits are specifically incorporated by reference as an exhibit to the
registration statement of which this joint proxy statement/prospectus is a part.
Stockholders may obtain documents that are referred to or that are incorporated
by reference in this joint proxy statement/prospectus by requesting them in
writing or by telephone at the following address:

ActionPoint, Inc.
                  1299 Parkmoor Avenue
                  San Jose, California 95126
                   (408) 325-3800
                  Attention:  John Finegan, Corporate Secretary

If you would like to request documents from ActionPoint, please do so by             
, 2002 to receive them before the ActionPoint 2002 annual meeting. If you
request any incorporated documents from ActionPoint, ActionPoint will mail them
to you by first class mail, or other equally prompt means, within one business
day after ActionPoint receives your request.

Neither ActionPoint nor Captiva has authorized anyone to give you any
information or to make any representation about the merger or their companies
that differs from or adds to the information contained in this document or in
the documents ActionPoint has publicly filed with the Securities and Exchange
Commission. Therefore, if anyone should give you any different or additional
information, you should not rely on it.

If you live in a jurisdiction where it is unlawful to offer or exchange or
sell, or to ask for offers to exchange or buy, the securities offered by this
document, or to ask for proxies, or, if you are a person to whom it is unlawful
to direct such offers or requests, then the offer and request presented by this
document does not extend to you.

The information contained in this document speaks only as of the date
indicated on the cover of this document unless the information specifically
indicates that another date applies.

182

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INDEX TO CAPTIVA FINANCIAL STATEMENTS



|                                                                                                                                                                                                                   | Page
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Captiva Software Corporation                                                                                                                                                                                       |     
|Financial Statements                                                                                                                                                                                               |     
|Report of Independent Accountants                                                                                                                                                                                  | F-2 
|Consolidated Balance Sheets as of December 31, 2001 and
2000 and March 31, 2002 (unaudited)                                                                                                                        | F-3 
|Consolidated Statements of Operations for the years ended December 31,
2001, 2000 and 1999 and the three months ended March 31, 2002 and 2001 (unaudited)                                                          | F-4 
|Consolidated Statements of Mandatorily Redeemable Convertible
Preferred Stock and Shareholders' Deficit For the Years Ended December 31, 2001,
2000 and 1999 and the three months ended March 31, 2002 (unaudited) | F-5 
|Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999 and the three months ended March 31, 2002 and 2001 (unaudited)                                                          | F-6 
|Notes to Financial Statements                                                                                                                                                                                      | F-7 

F-1

---

Report of Independent Accountants





To the Board of Directors and Shareholders

of Captiva Software Corporation





In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of operations, of mandatorily redeemable
convertible preferred stock and shareholders' deficit, and of cash flows present
fairly, in all material respects, the financial position of Captiva Software
Corporation (the "Company") and its subsidiaries at December 31, 2001
and 2000, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.  These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.  At
December 31, 2001, the Company had a working capital deficiency and an
accumulated deficit of approximately $13,616,000 and $23,270,000, respectively.
As discussed in Note 2 to the consolidated financial statements, the Company has
a substantial amount of indebtedness maturing in June 2002 and the later of
March 2002 or the date on which the merger or sale of the Company is concluded
or upon the cessation of active negotiations to conclude such merger or sale.
These circumstances raise substantial doubt about the Company's ability to
continue as a going concern.  Management's plans in regard to these matters are
also described in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



/s/ PricewaterhouseCoopers LLP





San Diego, California

April 8, 2002

F-2

---

**Captiva Software Corporation
 
Consolidated Balance Sheets**
 (In Thousands)

`December 31,          March 31,
                                                    ----------------------------  -------------
                                                        2001           2000           2002
                                                    ------------  --------------  -------------
                                                                                    (unaudited)

Assets                                                                            
Current assets
  Cash and cash equivalents.......................       $1,061            $566           $838
  Accounts receivable, less allowance for doubtful
    accounts of $610,000, $610,000 and $512,000
    at March 31, 2002, December 31, 2001
    and 2000, respectively........................        5,950           6,220          5,109
  Prepaid expenses and other current assets.......          182             532            155
                                                    ------------  --------------  -------------
      Total current assets........................        7,193           7,318          6,102

Property and equipment, net.......................          551             886            489
Other assets......................................          261             240            254
                                                    ------------  --------------  -------------
      Total assets................................       $8,005          $8,444         $6,845
                                                    ============  ==============  =============

Liabilities, Mandatorily Redeemable Convertible
Preferred Stock and Shareholders' Deficit

Current liabilities
  Accounts payable and accrued expenses...........       $5,585          $6,860         $5,176
  Current portion of long-term debt...............        2,495              --          2,345
  Current portion of subordinated notes, less
   debt discount of $165,000 at December 31, 2001.        7,923              --          8,088
  Deferred revenue................................        4,799           3,785          4,467
  Other liabilities...............................            7              31               -
                                                    ------------  --------------  -------------
      Total current liabilities...................       20,809          10,676         20,076

  Long-term debt..................................           --           2,869             --
  Subordinated notes, less debt discount
   of $821,000 at December 31, 2000...............           --           7,267             --
  Other long-term liabilities.....................          260             338            118
                                                    ------------  --------------  -------------
       Total liabilities..........................       21,069          21,150         20,194
                                                    ------------  --------------  -------------
Commitments and contingencies (Note 12)

Mandatorily redeemable convertible preferred stock:
  Series A, B, C, D, and E mandatorily redeemable
  convertible preferred stock, aggregate
  liquidation preference of $6,408,000 at
  March 31, 2002 and $6,407,000 at
  December 31, 2001 (Note 9)......................        8,382           8,325          8,397
                                                    ------------  --------------  -------------
Shareholders' deficit:
Common stock, no par value, 70,000,000, 70,000,000
   and 45,000,000 shares authorized
   at March 31, 2002, December 31, 2001 and
   2000, respectively, and 23,760,060,
   23,760,060 and 23,621,929 shares outstanding
   at March 31, 2002, December 31, 2001 and
   2000, respectively.............................        1,833           1,824          1,833
Accumulated other comprehensive loss..............           (9)            (21)           (26)
Accumulated deficit...............................      (23,270)        (22,834)       (23,553)
                                                    ------------  --------------  -------------
     Total stockholders' deficit..................      (21,446)        (21,031)       (21,746)
                                                    ------------  --------------  -------------
     Total liabilities, mandatorily redeemable
      convertible preferred stock and
      shareholder' deficit........................       $8,005          $8,444         $6,845
                                                    ============  ==============  =============`

The accompanying notes are an integral part of these
              consolidated financial statements

F-3

---

**Captiva Software Corporation
 
Consolidated Statements of Operations**
 (In Thousands)

`Three Months Ended
                                                       Years Ended December 31,        March 31,
                                                  ----------------------------- ---------------------
                                                    2001      2000      1999      2002        2001
                                                  --------- --------- --------- ---------  ----------
                                                                                (unaudited)(unaudited)

Net revenues                                                                    
  Software......................................   $10,480   $10,169    $8,314    $2,638      $2,342
  Services......................................    13,088     9,562    10,178     2,992       2,913
  Other.........................................       693        --        --       470          20
                                                  --------- --------- --------- ---------  ----------
   Total  revenues..............................    24,261    19,731    18,492     6,100       5,275

Cost and expenses 
 Cost of sales
  Software......................................       828       648       673       183         119
  Services......................................     7,496     7,687     8,474     1,758       1,840
  Other.........................................       524        --        --       400          15
                                                  --------- --------- --------- ---------  ----------
    Total cost of sales.........................     8,848     8,335     9,147     2,341       1,974

Software development costs......................     2,304     2,587     2,339       583         593
Sales and marketing.............................     8,647    10,605     8,099     2,164       2,188
General and administrative......................     3,455     3,855     3,763       955         622
Amortization and impairment of goodwill and
  intangible assets.............................        --       361        72        --          --
                                                  --------- --------- --------- ---------  ----------
   Total cost and expenses......................    23,254    25,743    23,420     6,043       5,377
                                                  --------- --------- --------- ---------  ----------
Income (loss) from operations...................     1,007    (6,012)   (4,928)       57        (102)

Interest expense................................     1,428       932     1,222       336         368

Other income (expense)..........................        (1)      (31)       --        --           3
                                                  --------- --------- --------- ---------  ----------
Loss before provision for income taxes..........      (422)   (6,975)   (6,150)     (279)       (467)

Provision for income taxes......................        --        --        49        --          --
                                                  --------- --------- --------- ---------  ----------
Net loss........................................     ($422)  ($6,975)  ($6,199)    ($279)      ($467)

                                                  ========= ========= ========= =========  ==========`

The accompanying notes are an integral part of
        these consolidated financial statements

F-4

---

**Captiva Software Corporation
 
Consolidated Statements of Mandatorily Redeemable Convertible Preferred Stock and Shareholders' Deficit
 
For the Years Ended December 31, 2001, 2000 and 1999, and the Three Months Ended March 31, 2002**

`------------------------------------------------------------------------------------------------------------------  --------------------------------------------------------------------
                                                                             Manditorily Redeemable Convertible Preferred Stock                                                            Shareholders' Equity
                                               ------------------------------------------------------------------------------------------------------------------  --------------------------------------------------------------------
                                                     Series A                Series B                Series C                Series D             Series E
                                                     Redeemable              Redeemable             Redeemable              Redeemable           Redeemable
                                                     Convertible             Convertible            Convertible             Convertible          Convertible                                  Accumulated
                                                    Preferred Stock        Preferred Stock        Preferred Stock         Preferred Stock      Preferred Stock               Common Stock        Other
                                               ----------------------  -------------------  ----------------------  -------------------  ------------------------  -------------------------  Comprehensive Accumulated
                                                 Shares     Amount      Shares    Amount      Shares     Amount      Shares    Amount       Shares      Amount        Shares       Amount     Income (Loss)   Deficit         Total
                                               ---------- -----------  --------- ---------  ---------- -----------  --------- ---------  ------------ -----------  ------------  -----------  ------------ -------------  -------------
                                                                                                                                                                                                                          
Balance at December 31, 1998.................. 2,515,587  $2,170,000    875,424  $873,000   2,188,553  $2,180,000         --        --            --          --    23,892,364   $1,856,000            --   ($9,199,000)   ($7,343,000)
Issuance of Series D redeemable
   convertible preferred stock, net of
   issuance costs, $50,000....................                                                                       769,231   950,000
Shares issued in connection with amendment
   of subordinated notes......................                                                                                                                         156,362       63,000                                     63,000
Shares issued upon exercise of stock
   options....................................                                                                                                                         687,940       62,000                                     62,000
Accretion of redeemable convertible
   preferred stock............................                19,000                2,000                   9,000                                                                                               (30,000)       (30,000)
Net loss......................................                                                                                                                                                               (6,199,000)    (6,199,000)
                                               ---------- -----------  --------- ---------  ---------- -----------  --------- ---------  ------------ -----------  ------------  -----------  ------------ -------------  -------------
Balance at December 31, 1999                   2,515,587   2,189,000    875,424   875,000   2,188,553   2,189,000    769,231   950,000            --          --    24,736,666    1,981,000            --   (15,428,000)   (13,447,000)

Issuance of Series E redeemable
   convertible preferred stock (Note 9).......                                                                                            14,926,991   1,673,000
Shares issued for interest earned                                                                                                            130,143      18,000
   on subordinated notes......................
Beneficial conversion feature associated
   with the Series E redeemable
   convertible preferred stock................                                                                                                           417,000                                               (417,000)      (417,000)
Shares issued in connection with amendment
   of subordinated notes......................                                                                                                                         613,181       85,000                                     85,000
Shares redeemed in conjunction with
   subordinated notes (Note 9)................                                                                                                                      (1,839,542)    (257,000)                                  (257,000)
Shares issued upon exercise of stock
   options....................................                                                                                                                         111,624       15,000                                     15,000
Accretion of redeemable convertible
   preferred stock............................                                                                                  14,000                                                                          (14,000)       (14,000)
Components of comprehensive income:
      Foreign currency translation............                                                                                                                                                    (21,000)                     (21,000)
      Net loss................................                                                                                                                                                               (6,975,000)    (6,975,000)
      Total comprehensive loss................                                                                                                                                                                              (6,996,000)
                                               ---------- -----------  --------- ---------  ---------- -----------  --------- ---------  ------------ -----------  ------------  -----------  ------------ -------------  -------------
Balance at December 31, 2000                   2,515,587   2,189,000    875,424   875,000   2,188,553   2,189,000    769,231   964,000    15,057,134   2,108,000    23,621,929    1,824,000       (21,000)  (22,834,000)   (21,031,000)

Shares issued for interest earned
   on subordinated notes......................                                                                                               310,471      43,000
Shares issued upon exercise of stock
   options....................................                                                                                                                         138,131        9,000                                      9,000
Accretion of redeemable convertible
   preferred stock............................                                                                                  14,000                                                                          (14,000)       (14,000)
Components of comprehensive income:
      Foreign currency translation............                                                                                                                                                     12,000                       12,000
      Net loss................................                                                                                                                                                                 (422,000)      (422,000)
      Total comprehensive loss................                                                                                                                                                                                (410,000)
                                               ---------- -----------  --------- ---------  ---------- -----------  --------- ---------  ------------ -----------  ------------  -----------  ------------ -------------  -------------
Balance at December 31, 2001                   2,515,587   2,189,000    875,424   875,000   2,188,553   2,189,000    769,231   978,000    15,367,605   2,151,000    23,760,060    1,833,000        (9,000) ( 23,270,000)  ( 21,446,000)
Shares issued for interest earned
   on subordinated notes (unaudited)..........                                                                                                76,555      11,000
Accretion of redeemable convertible
   preferred stock (unaudited)................                                                                                   4,000                                                                           (4,000)        (4,000)
Components of comprehensive income:
      Foreign currency translation (unaudited)                                                                                                                                                    (17,000)                     (17,000)
      Net loss (unaudited)....................                                                                                                                                                                 (279,000)      (279,000)
      Total comprehensive loss (unaudited)....                                                                                                                                                                                (296,000)
                                               ---------- -----------  --------- ---------  ---------- -----------  --------- ---------  ------------ -----------  ------------  -----------  ------------ -------------  -------------
Balance at March 31, 2002 (unaudited)          2,515,587  $2,189,000    875,424  $875,000   2,188,553  $2,189,000    769,231  $982,000    15,444,160  $2,162,000    23,760,060   $1,833,000       (26,000) ($23,553,000)  ($21,746,000)
                                               ========== ===========  ========= =========  ========== ===========  ========= =========  ============ ===========  ============  ===========  ============ =============  =============`

The accompanying notes are an integral part of these
              consolidated financial statements

F-5

---

**Captiva Software Corporation
 
Consolidated Statements of Cash Flows**
 (In Thousands)

`Three Months Ended
                                                          Years Ended December 31,         March 31,
                                                     ----------------------------- ---------------------
                                                       2001      2000      1999       2002       2001
                                                     --------- --------- --------- ---------- ----------
                                                                                   (unaudited)(unaudited

Cash flows from operating activities                                               
Net loss............................................    ($422)  ($6,975)  ($6,199)     ($279)     ($467)
Adjustments to reconcile net loss to net cash
 provided by operating activities...................
 Depreciation, amortization and impairment of
  goodwill and intangible assets....................      464       829       937        102        121
 Provision for losses on accounts receivable........      213       344       330         --         --
 Amortization of debt issuance costs and
  debt discount.....................................      912       465       449        228        228
 Non-cash interest expense..........................       50       332        63         14         11
 Change in assets and liabilities
  Accounts receivable...............................       57    (2,550)    2,049        841        643
  Inventory.........................................       --        --       303         --         --
  Prepaid expenses and other current assets.........      103       158      (172)       (38)        57
  Other assets......................................      (21)       66        41          7        (14)
  Accounts payable and accrued expenses.............   (1,199)    1,269     1,349       (410)    (1,425)
  Income taxes payable..............................       --        --      (265)        --         --
  Deferred revenue..................................    1,014     1,675    (1,580)      (332)       754
  Other liabilities.................................      (91)      330        --       (142)       (89)
                                                     --------- --------- --------- ---------- ----------
   Cash provided by (used in) operating activities..    1,080    (4,057)   (2,695)        (9)      (181)
                                                     --------- --------- --------- ---------- ----------

Cash flows from investing activities                                               
Purchases of property and equipment.................     (129)     (417)     (817)       (40)       (51)
                                                     --------- --------- --------- ---------- ----------
   Cash used in investing activities................     (129)     (417)     (817)       (40)       (51)
                                                     --------- --------- --------- ---------- ----------

Cash flows from financing activities                                               
Proceeds from subordinated notes, net
 of issuance costs..................................       --     2,480       525         --         --
Proceeds from issuance of Series D preferred stock..       --        --       950         --         --
Proceeds from issuance of Series E preferred stock..       --     1,101        --         --         --
Proceeds from issuance of common stock..............        9        15        62         --          3
Proceeds from bank borrowings.......................       --        --     2,152         --         --
Payments of borrowings and capital leases...........     (477)     (301)      (67)      (157)       (98)
                                                     --------- --------- --------- ---------- ----------
   Cash provided by (used in) financing activities..     (468)    3,295     3,622       (157)       (95)
                                                     --------- --------- --------- ---------- ----------

Effect of changes in exchange rate..................       12       (21)       --        (17)        90

Net increase (decrease) in cash and cash equivalents      495    (1,200)      110       (223)      (237)

Cash and cash equivalents at beginning of period....      566     1,766     1,656      1,061        566
                                                     --------- --------- --------- ---------- ----------
Cash and cash equivalents at end of period..........   $1,061      $566    $1,766       $838       $329
                                                     ========= ========= ========= ========== ==========

Supplemental disclosure of cash flow information                                   
Cash paid for interest..............................     $226      $279      $318       $153       $188

Non-cash investing and financing activities                                        
Beneficial conversion feature associated with the
   issuance of Series E.............................       --      $417        --         --         --
Accretion of preferred stock........................       14        14        30          4          4
Issuance of Series E and redemption of common stock
  in lieu of accrued interest expense (Note 7)......       --       572        --         --         --
Issuance of Series E for accrued interest expense
  on subordinated notes (Note 7)....................       43        18        --         11         11
Issuance of common stock in connection with
  amendment of subordinated notes...................       --        85        63         --         --`

The accompanying notes are an integral part of
      these consolidated financial statements

F-6

---

1.	Description of Business and Summary of Significant Accounting
Policies

The Company

Captiva Software Corporation (the
"Company"), a California corporation, and its subsidiaries, are
engaged in the development, marketing and support of computer software and
professional services for automating forms processing, image capture and data
capture.  The Company markets its products to software resellers, system
integrators and directly to end users.  More than 85% of the Company's revenues
are derived from customers in North America.

Basis of Presentation

The interim financial information contained herein is
unaudited but, in management's opinion, includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation.  The financial
statements should be read in conjucntion with the Company's audited financial
statements and notes thereto for the year entded December 31, 2001 included in this
prospectus.  Results for the interim periods are not necessarily indicative of results
for other interim periods or for the full year.

Principles of Consolidation

The consolidated financial statements include the
accounts of the Company and its subsidiaries.  All significant intercompany
accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the financial statement date, as well as the reported amounts of
revenues and expenses during the reporting period.  Accordingly, actual results
could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments
with a maturity at acquisition of three months or less to be cash
equivalents.

Concentrations of Credit Risk

The Company's financial instruments that are subject
to concentrations of credit risk consist primarily of cash and cash equivalents
and accounts receivable.  The Company's policy is to place its cash and cash
equivalents with high quality financial institutions in order to limit its
credit exposure.  The Company performs on-going credit evaluations of its
customers' financial condition and generally requires no collateral from these
customers.  The Company reviews customer balances for potential credit losses
and establishes an allowance for potentially uncollectible accounts
receivable.

Property and Equipment

Property and equipment is stated at cost net of
accumulated depreciation.  Depreciation expense is calculated using the
straight-line method over the estimated useful life of the assets ranging from
three to five years.  Depreciation expense was $464,000, $468,000 and $865,000
for the years ended December 31, 2001, 2000 and 1999, respectively.
Expenditures for maintenance and repairs are charged to operations as incurred.
When assets are retired or sold, the assets and accumulated depreciation are
removed from the respective accounts and any resulting gain or loss is
recognized in operations.

Long-Lived Assets

Long-lived assets to be held and used by the Company
and goodwill and other intangibles are reviewed for impairment whenever events
or changes in circumstances indicate that their net book value may not be
recoverable.  An impairment loss is recognized if the sum of the expected
undiscounted future cash flows from the use of the assets is less than the net
book value of the asset.  The amount of the impairment loss, if any, will be
measured as the difference between the net book value of the assets and their
estimated fair values.

F-7

---

Goodwill and Other Intangible Assets

Goodwill is recorded when the consideration paid for
acquisitions exceeds the fair value of net tangible and intangible assets
acquired.  Reviews are performed to determine whether facts or circumstances
exist which indicate that the carrying values of assets are impaired.  The
Company assesses the recoverability of its assets by comparing the projected
undiscounted net cash flows associated with those assets against their
respective carrying amounts.  Impairment, if any, is based on the excess of the
carrying amount over the fair value of those assets.  In 2000, management
assessed the recoverability of goodwill and intangible assets due to the
continued net cash outflows experienced by the Company.  As a result, goodwill
and intangible assets were reduced to their estimated fair value through a
charge to operations of $280,000.

Income Taxes

Current income tax expense or benefit is the amount
of income taxes expected to be payable or refundable for the current year.  A
deferred income tax asset or liability is computed for the expected future
impact of differences between the financial reporting and tax bases of assets
and liabilities and for the expected future tax benefit to be derived from tax
credit and net operating loss carryforwards.  Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than
not that the deferred tax assets will not be realized.

Revenue Recognition

Revenue is recognized upon meeting all of the
following criteria:  execution of a written purchase commitment, license
agreement or contract; delivery of software or authorization keys; the license
fee is fixed and determinable; collectibility of the proceeds is assessed as
being probable; and vendor-specific objective evidence of the fair values of the
elements in a multiple element arrangement exist to allocate the total fee to
elements of the arrangement.  Vendor-specific objective evidence is based on the
price charged when an element is sold separately, or if not yet sold separately,
is established by authorized management.  If vendor-specific objective evidence
of fair values of all elements in a multiple element arrangement does not exist,
but it does exist for the undelivered elements, the residual method is used to
recognize revenue related to delivered elements of a multiple element
arrangement.

Revenue is primarily derived from the sale of software
licenses and professional services.  In sales of professional services, the
Company evaluates whether such services are essential to the overall
functionality of the solution being delivered.  When software licenses are sold
with professional services and such services are deemed essential to the
functionality of the overall solution, combined software license and service
revenue is recognized using the percentage-of-completion method of accounting.
When software licenses are sold with professional services and such services are
not considered essential to the functionality of the software, software license
revenue is recognized when the above criteria are met and service revenue is
recognized as the services are performed, or in the case of fixed fee service
contracts, using the percentage-of-completion method of accounting.  When
software licenses are sold without services, revenue is recognized when the
above criteria are met.

Unbilled accounts receivable represents revenue recognized in
excess of cumulative amounts billed to customers accounted for using the
percentage-of-completion accounting method.

The Company's standard software license and service
agreements provide for a 90-day warranty period.  The Company accrues the
estimated cost of providing services under its warranty obligation.

Separate from software license and professional services, the
Company sells software support services.  Support service arrangements are
mandatory for a one-year period on all new license sales and are generally
renewable for additional one-year periods at the election of the licensee.
Support service arrangements provide the licensee access to technical product
support and the right to receive product upgrades.  The Company recognizes
support service revenue over the term of the contract.

Revenues from hardware product sales are recorded upon
shipment, or when risk of loss passes to the customer, if later.

F-8

---

Software Development Costs

Software development costs incurred prior to
establishment of technological feasibility are expensed as incurred.  Software
development costs incurred subsequent to the establishment of technological
feasibility through the period of general market availability are capitalized
and stated at the lower of cost or net realizable value.

Mandatorily Redeemable Convertible Preferred Stock

Mandatorily redeemable convertible preferred stock is
accreted to its redemption value using the interest method from the date of
issuance to the first redemption date.

Stock-Based Compensation

The Company uses the intrinsic value method to
account for employee stock options.  Under the intrinsic value method no
compensation expense is recorded when the exercise price of employee stock
options equals or exceeds the fair value of the common stock on the date of
grant.  The Company provides pro forma disclosure of operating results, as if
the minimum value method had been applied.

Comprehensive Income (Loss)

Other comprehensive income (loss) is a change in
shareholders' equity that does not result from investments by or distributions
to owners.  The difference between net income and comprehensive income for the
Company arises from foreign currency translation adjustments.  Comprehensive
income (loss) is presented in the consolidated statements of mandatorily
redeemable convertible preferred stock and shareholders' deficit.

Foreign Currency Translation

The functional currency of the Company's foreign
subsidiaries is the local currency.  Accordingly, the assets and liabilities of
the Company's foreign subsidiaries are translated into U.S. dollars at exchange
rates in effect at the balance sheet date.  Income and expense items are
translated at a weighted average exchange rate for the period.  Gains and losses
resulting from translation are included in a separate component of shareholders'
deficit.

Advertising

Advertising costs are expensed in the period in which
the advertising takes place.  Advertising expenses of $309,000, $297,000 and
$726,000 were incurred during 2001, 2000 and 1999, respectively.

Reclassification

Certain amounts related to the prior year
presentation have been reclassified to the current year presentation.

New Accounting Pronouncements

The Company has adopted the provisions of Emerging
Issues Task Force Topic No. D-103, Income Statement Characterization of
Reimbursements Received for "Out-of-Pocket" Expenses Incurred for
all periods presented.  Accordingly, amounts received from customers for
reimbursement of out-of-pocket expenses are classified as revenue with the
corresponding costs classified as cost of sales.

2.	Liquidity

The accompanying consolidated financial statements have
been prepared on a going concern basis of accounting and do not reflect any
adjustments that might result if the Company was unable to continue as a going
concern.  At December 31, 2001, the Company had a working capital deficiency and
an accumulated deficit of approximately $13,616,000 and $23,270,000,
respectively.  At December 31, 2001, the Company has $2,495,000 outstanding
under a line of credit maturing June, 2002 and outstanding subordinated notes
with a principal amount of $8,088,000 maturing the later of March, 2002 or the
date on which the merger or sale of the Company is concluded or upon the
cessation of active negotiations to conclude such merger or sale.

Management's plans to improve the Company's liquidity include
pursuing amendments to the line of credit and subordinated note agreements that
would result in extensions of the maturity dates of the related

F-9

---

Management of the Company has successfully obtained private
debt and equity capital in the past and has been able to negotiate amendments to
the terms of its credit facility in 2001 and the subordinated notes in 2000.  In
addition, in 2001 the Company's financial position improved as it narrowed its
net loss from $6,975,000 to $422,000 while generating $1,080,000 in cash from
operations.  However, even with this improving trend, there can be no assurance
that management will be successful in its attempts to refinance or amend the
terms of the Company's existing debt, raise additional equity capital or
complete a merger or sale of the Company.  In the event management is not
successful, there will be insufficient cash resources
available for the payment
of the Company's obligations as they become due during the year ending December
31, 2002.

3.	Accounts Receivable

Accounts receivable consist of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
     Trade accounts receivable, net.............    $5,782,000     $5,746,000
     Unbilled trade accounts receivable.........       168,000        474,000
                                                  -------------  -------------
                                                    $5,950,000     $6,220,000
                                                  =============  =============`

4.	Property and Equipment

Property and equipment consist of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
     Computer equipment.........................    $1,015,000     $1,293,000
     Furniture and fixtures.....................       423,000        606,000
                                                  -------------  -------------
                                                     1,438,000      1,899,000

     Less accumulated depreciation and
     amortization...............................      (887,000)    (1,013,000)
                                                  -------------  -------------
                                                      $551,000       $886,000
                                                  =============  =============`

In 2000, computer equipment includes the cost of assets
financed by the Company under capital lease agreements.  The cost of the
equipment and the related accumulated amortization was $382,000 and $382,000,
respectively.  In 2001, the Company disposed of various fully depreciated assets
including those which were originally financed under capital lease
agreements.

5.	Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
     Accounts payable...........................    $1,917,000     $3,034,000
     Accrued compensation.......................     1,258,000      1,220,000
     Accrued vacation...........................       661,000        573,000
     Accrued legal..............................       267,000        602,000
     Other......................................     1,482,000      1,431,000
                                                  -------------  -------------
                                                    $5,585,000     $6,860,000
                                                  =============  =============`

F-10

---

6.	Long-term Debt

Long-term debt consists of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
     Line of credit.............................    $2,495,000     $2,469,000
     Term Loan..................................            --        400,000
                                                  -------------  -------------
                                                     2,495,000      2,869,000

     Less amounts due within one year...........     2,495,000             --
                                                  -------------  -------------
                                                            --     $2,869,000
                                                  =============  =============`

During 1999, the Company entered into a
credit facility with a bank consisting of a $2,500,000 line of credit and a
$1,000,000 term loan.  In 2000, the credit facility was amended such that total
borrowings under the credit facility cannot exceed $2,999,000.  In addition,
borrowings under the line of credit were limited to the greater of $2,469,000 or
75% of eligible accounts receivable.  Outstanding balances under the line of
credit and the term loan bear interest at the bank's prime rate plus 1% (10.5%
at December 31, 2000).  All assets of the Company collateralize the credit
facility.

In 2001, the Company negotiated further amendments to the
credit facility pursuant to which the outstanding balances on the term loan and
the outstanding balance of the Company's bank credit card were consolidated into
one line of credit.  Under the amended line of credit agreement, borrowings
cannot exceed the lesser of $2,829,899 or 75% of eligible accounts receivable.
The maturity date of the line of credit was extended to June 30, 2002 and the
interest rate increased to the bank's prime rate plus 2% (6.75% at December 31,
2001).  As a result of this amendment, borrowings on the line of credit are no
longer payable on demand.  In accordance with the credit facility agreement, the
Company must maintain certain monthly liquidity ratios and various non-financial
covenants.

7.	Subordinated Notes

Subordinated notes consist of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
     Subordinated notes ("1998 Notes")..........    $4,088,000     $4,088,000
     Subordinated convertible notes ("2000 Notes     3,835,000      3,179,000
                                                  -------------  -------------
                                                     7,923,000      7,267,000

     Less amounts due within one year...........     7,923,000             --
                                                  -------------  -------------
                                                            --     $7,267,000
                                                  =============  =============`

In 2000, the Company negotiated an extension of the maturity
date of the 1998 Notes.  The amended 1998 Notes mature the later of March 29,
2002 or the date on which a merger or sale of the Company is concluded or upon
the cessation of active negotiations to conclude such merger or sale.  The
principal amount of the 1998 Notes is $4,088,000.  Interest on the 1998 Notes
accrues at an annual rate of 6%, which is payable in shares of mandatorily
redeemable convertible Series E preferred stock ("Series E") at a fixed
conversion price of $0.79 per share.  The 1998 Notes are collateralized by a
residual interest in substantially all of the Company's assets and repayment to
the holders is subordinate to the Company's credit facility  (Note 6).

F-11

---

In 2000, the Company issued 4,087,877 shares of Series E,
valued at $572,000, to the note holders in consideration for the amendment of
the 1998 Notes as well as for the redemption of 1,839,363 shares of common
stock, valued at $257,000, from the holders of the 1998 Notes and the
satisfaction of an accrued interest obligation of $315,000 to the note holders.

During 2000 and 1999, the Company issued 613,181 and 156,352
shares of common stock, respectively, in exchange for modifications to the
maturity date of the 1998 Notes.  The value of the common stock issued of
$85,000 and $63,000 in 2000 and 1999, respectively, was recorded as debt
issuance costs, and amortized to interest expense.

In 2000, the Company issued convertible subordinated notes
("2000 Notes") with a principal amount of $4,000,000 and 10,839,114 shares of
Series E in exchange for $4,000,000.  The 2000 Notes bear interest at an annual
rate of 6%, payable semi-annually, and mature the later of March 31, 2002 or the
date on which a merger or sale of the Company is concluded or upon the cessation
of active negotiations to conclude such merger or sale.  The proceeds of this
financing were allocated to the 2000 Notes and Series E based on their relative
fair values.  A debt discount of $1,101,000 was allocated to the 2000 Notes
equivalent to the relative fair value of the Series E shares.  The debt discount
is being amortized to interest expense through March 29, 2002.  Amortization of
the debt discount totaled $656,000 and $280,000 in 2001 and 2000, respectively.
As a result of this allocation, a charge of $417,000 was recorded against the
accumulated deficit related to the beneficial conversion feature of the Series E
shares issued.  The 2000 Notes are convertible into Series E shares at anytime
at a conversion price of $0.30 per share per $1.00 principal amount of the 2000
Notes.  The 2000 Notes are collateralized by a residual interest in
substantially all of the Company's assets and repayment to the holders is
subordinate to the Company's credit facility (Note 6).

On March 4, 2002, the Company entered into a merger agreement
with ActionPoint, Inc. (Note 14). Pursuant to the terms of the subordinated
notes, the maturity date of the 1998 Notes and 2000 Notes was automatically
extended through the date on which the merger is concluded or upon the cessation
of active negotiations to conclude the merger.

8.	Income Taxes

Deferred income taxes consist of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
Deferred Tax Assets
     Net operating loss carryforwards...........    $6,904,000     $6,836,000
     Accrued expenses...........................       263,000        228,000
     Research and development tax credit
       carryforwards............................       304,000        304,000
     Allowance for doubtful accounts............       243,000        204,000
     Other......................................        (9,000)        (8,000)
                                                  -------------  -------------
     Net deferred tax assets....................     7,705,000      7,564,000
     Less valuation allowance...................    (7,705,000)    (7,564,000)
                                                  -------------  -------------
     Deferred tax asset.........................    $     -        $     -
                                                  =============  =============`



The Company's effective tax rate
differs from the federal statutory rate of 34% principally due to the valuation
allowance recorded on deferred tax assets for the years ended December 31, 2001,
2000 and 1999.

At December 31, 2001, the Company has net operating loss
carryforwards of approximately $17,332,000 available to offset future taxable
income and research and development tax credit carryforwards of approximately
$304,000 available to offset future tax liabilities.  The majority of the
Company's operating

F-12

---

In accordance with provisions of the Internal Revenue Code, a
50% or greater change in ownership of a corporation within a three-year period
will place an annual limitation on the Company's ability to utilize its existing
tax loss.  As a result of a business combination in 1998 that was accounted for
as a pooling-of-interests, approximately $4,000,000 of the Company's available
net loss carryforwards are subject to annual usage limitations.  Additional
changes in ownership could result in further limitations on the utilization of
the aggregate net loss carryforwards.

9.	Mandatorily Redeemable Convertible Preferred Stock

The Company's outstanding mandatorily redeemable convertible preferred
stock consists of the following:

`December 31,
                                                  -------------- -------------
                                                      2001           2000
                                                  -------------  -------------
Series A redeemable convertible preferred stock,
no par value, 2,873,564 shares authorized,
2,515,587 shares outstanding at December 31, 2001
and 2000, liquidation preference of $2,189,000..    $2,189,000     $2,189,000


Series B redeemable convertible preferred stock,
no par value, 1,115,000 shares authorized,
875,424 shares outstanding at December 31, 2001
and 2000, liquidation preference of $875,000....       875,000        875,000


Series C redeemable convertible preferred stock,
no par value, 4,500,000 shares authorized,
2,188,553 shares outstanding at December 31, 2001
and 2000, liquidation preference of $2,189,000..     2,189,000      2,189,000

Series D redeemable convertible preferred stock,
no par value, 1,000,000 shares authorized,
769,231 shares outstanding at December 31, 2001
and 2000, liquidation preference of $1,000,000..       978,000        964,000

Series E redeemable convertible preferred stock,
no par value, 29,000,000 and 29,000,000 shares
authorized, 15,367,605 and 15,057,134 shares
outstanding at December 31, 2001 and 2000,
respectively, liquidation preference of $154,000     2,151,000      2,108,000
                                                  -------------  -------------
                                                    $8,382,000     $8,325,000
                                                  =============  =============`

Each share of Series A, B and C preferred stock is
convertible, at any time, into 1.32 shares of common stock at the option of the
holder.  Each share of Series D and E preferred stock is convertible, at any
time, into one share of common stock at the option of the holder.  The
conversion rates are subject to certain anti-dilution adjustments as defined in
the respective agreements.  Each of the Series A, B, C, D and E preferred shares
will automatically convert into common stock upon the Company's sale of its
common stock pursuant to a registration statement under the Securities Act of
1933 or on the date upon which the Company obtains the consent of the holders of
a majority of outstanding Series A, B, C, D and E preferred stock.  The holder
of each share of preferred stock is entitled to one vote for each share of
common stock into which it would convert.

F-13

---

In the event of any liquidation, dissolution or winding up of
the Company, the holders of the preferred stock are entitled to receive prior
to, and in preference to, any distribution to the common stockholders, an amount
equal to $0.87, $1.00, $1.00, $1.30 and $0.01 per share for Series A, B, C, D
and E, respectively, (subject to appropriate adjustments for stock splits, stock
dividends, combinations or other recapitalizations affecting such shares) and an
amount equal to declared but unpaid dividends on such shares of Series A, B, C,
D and E preferred stock.

The holders of the Series A, B, C, D and E preferred stock
are entitled to receive dividends at an annual rate of $0.07, $0.08, $0.09,
$0.13 and $0.07 per share, respectively, (subject to appropriate adjustments for
stock splits, stock dividends, combinations or other recapitalizations affecting
such shares) when and if declared by the Board of Directors.  Dividends on the
preferred stock are non-cumulative.  These dividends are in preference to any
declaration or payment of dividends to common shareholders.

The holders of the Series A, B, C, D and E preferred shares
have an option, exercisable at any time subsequent to the later of June 30, 2003
or the repayment of the Company's outstanding subordinated borrowings, to
require the Company to repurchase the shares for cash at an amount equal to
$0.87, $1.00, $1.00, $1.30 and $0.01 per share for Series A, B, C, D and E
preferred stockholders, respectively, (subject to appropriate adjustments for
stock splits, stock dividends, combinations or other recapitalizations affecting
such shares) plus all declared but unpaid dividends.

At December 31, 2001, 23,508,099 shares of common stock are
reserved for issuance in the event of conversion of the Series A, B, C, D and E
preferred shares.

10.	Shareholders' Equity

Changes to Authorized and Outstanding Shares

In July 2000, the Company increased the authorized
number of common shares from 45,000,000 to 70,000,000 and increased the
authorized number of preferred shares from 9,488,564 to 38,488,564, including
29,000,000 shares designated as Series E preferred stock.

Warrants

In 1997, the Company issued five-year warrants to
purchase 115,500 shares of Series B redeemable convertible preferred stock at an
exercise price of $1.00 in connection with the issuance of a convertible bridge
loan.  These warrants expired unexercised in February and March 2002.

In 1999, the Company issued five-year warrants to purchase
250,000 shares of common stock at an exercise price of $0.22 in connection with
the credit facility (Note 6).  In 2001, the Company issued five-year warrants to
purchase an additional 250,000 shares of common stock at an exercise price of
$0.22 in connection with the extension of the maturity date of the credit
facility.

All of the warrants are outstanding at December 31, 2001.

Stock Options

The Company adopted the 1994 Stock Option/Stock
Issuance Plan (the "Plan") under which 11,394,609 shares of common
stock are reserved for issuance.  The Board of Directors, subject to the
provisions of the Plan, determines the terms of all options grants.  The Plan
provides for maximum option term of 10 years and provides for the issuance of
either incentive stock options ("ISOs") or non-statutory stock options
("NSOs").  The Plan provides that the exercise price of ISOs shall be
no less than fair value on the date of grant and the exercise price of NSOs
shall be no less than 85% of fair value on the date of grant.  The vesting
period for options is generally four or five years.

F-14

---

The following summarizes the activity in stock
options:

`--------------
                                                  Weighted-
                                                   Average
                                    Options        Exercise
                                  Outstanding       Price
                                  ------------  --------------
                                                
Balance at December 31, 1998.....   6,279,500           $0.12
   Granted.......................     875,666           $0.68
   Exercised.....................    (687,940)          $0.10
   Canceled......................    (485,912)          $0.16
                                  ------------

Balance at December 31, 1999.....   5,981,314           $0.20
   Granted.......................   3,833,179           $0.22
   Exercised.....................    (111,624)          $0.16
   Canceled......................    (803,246)          $0.23
                                  ------------

Balance at December 31, 2000.....   8,899,623           $0.21
   Granted.......................   1,011,500           $0.22
   Exercised.....................    (138,131)          $0.05
   Canceled......................  (1,075,073)          $0.40
                                  ------------

Balance at December 31, 2001.....   8,697,919           $0.19
                                  ============`

The following table summarizes stock options outstanding
at December 31, 2001:

`Options Oustanding                  Options Exercisable
                     ---------------------------------------  --------------------
                                       Weighted-
                                        Average    Weighted-              Weighted-
    Range of                           Remaining    Average               Average
 Exercise Prices          Number          Life     Exercise     Number    Exercise
                       Outstanding      (Years)      Price    Exercisable  Price
-------------------  ----------------  ----------  ---------  ----------  --------
                                                                          
    $0.02 -  $0.07           965,106        4.38      $0.04     964,442     $0.04
    $0.08 -  $0.20         2,532,317        5.28       0.10   2,500,612      0.10
             $0.22         4,277,429        8.81       0.22   1,083,120      0.22
    $0.25 -  $0.38           476,022        3.43       0.34     468,157      0.34
    $0.40 -  $0.50           272,479        6.95       0.47     208,271      0.47
    $0.60 -  $0.85           174,566        7.60       0.77     103,733      0.76
                     ----------------                         ----------
                           8,697,919        6.92      $0.19   5,328,335     $0.16
                     ================                         ==========`

The weighted-average grant date minimum value per share of
options granted to employees under the Plan during the years ended December 31,
2001, 2000 and 1999 was $0.00, $0.00 and $0.68, respectively.  The number of
exercisable options at December 31, 2001, 2000 and 1999 was 5,328,335, 4,088,712
and 3,561,256, respectively.  The weighted average exercise price of the
exercisable options at December 31, 2001, 2000 and 1999 was $0.16, $0.16 and
$0.14, respectively.

F-15

---



Compensation expense is recognized for the Company's stock
incentive plan using the intrinsic value method.  Had compensation cost been
determined based on the minimum value of the options at the grant date, the
impact on the Company's net loss would have been as follows:

`Net Loss                   2001          2000          1999
----------             ------------  ------------  -------------
   As reported.......   ($422,000)   ($6,975,000)  ($6,199,000)
   Pro forma.........   (466,000)    (7,038,000)    (6,268,000)`

For the purpose of pro forma disclosure, the minimum value of
each option grant is estimated on the date of grant using the following
assumptions for grants in 2001, 2000 and 1999:  no dividend yield; risk free
interest rates of 4.77%, 6.38% and 5.24%, respectively; no volatility; and
expected life of five years.

11.	Significant Customers and Concentrations of Credit Risk

For the years ended December 31, 2001 and 2000, no single
customer accounted for more than 10% of total revenues.  For the year ended
December 31, 1999, three customers accounted for 16%, 13% and 11% of total
revenues.

At December 31, 2001 and 2000, accounts receivable from one
customer represented 21% and 26%, respectively, of net accounts receivable.

12.	Commitments and Contingencies

Operating Leases

The Company leases office space pursuant to non-
cancelable operating leases that expire through 2007.  At December 31, 2001,
future minimum rentals under non-cancelable operating leases are as follows:

`Year Ending December 31,


     2002.......................................    $1,358,000
     2003.......................................     1,137,000
     2004.......................................     1,045,000
     2005.......................................       245,000
     2006.........................................     127,000
     Thereafter.................................        30,000
                                                  -------------
                                                    $3,942,000
                                                  =============`

Rent expense under non-cancelable operating leases during the
years ended December 31, 2001, 2000 and 1999 totaled $1,334,000, $1,338,000 and
$643,000, respectively.

Legal

On March 1, 2001, the Company entered into a
Settlement and License agreement under which the Company was released from all
claims of infringement of certain patents.  In addition, the Company was granted
a license to use software encompassing these patents.  The $250,000 settlement
fee was recorded as an expense in the year ended December 31, 2000.
Approximately $194,000 of this amount is outstanding as of December 31,
2001.

On May 9, 2001, the Company entered into a Confidential
Settlement agreement in which the Company was released from all claims of
infringement of a United States patent for a settlement fee of $175,000 to be
paid in monthly installments through November 1, 2002.  The settlement was
recorded as an expense in the year ended December 31, 1999.  Approximately
$89,000 of this amount is outstanding as of December 31, 2001.

F-16

---

13.	Retirement Savings Plan

The Company maintains a contributory deferred savings
401(k) plan covering substantially all full-time employees.  The Company's
voluntary matching contribution is equal to 20% of the participant contribution
up to 1% of the employee's gross salary.  Participants vest immediately in their
own contributions and in the Company's matching contributions.  Contribution
expense was $83,000, $82,000 and $74,000 for the years ended December 31, 2001,
2000 and 1999, respectively.

14.	Subsequent Event

On March 4, 2002, the Company entered into a merger
agreement with ActionPoint, Inc. ("ActionPoint") whereby each
outstanding share of the Company's common stock will be converted into newly
issued shares of ActionPoint common stock at an exchange ratio calculated based
on the number of common shares of each company outstanding immediately prior to
the merger (the "exchange ratio").  Assuming that the capitalization
of the Company and ActionPoint does not change from the date of the merger
agreement, the exchange ratio will be 0.0156 shares of ActionPoint common stock
for each share of the Company's common stock.  Each outstanding option and
warrant to purchase shares of the Company's common stock will be replaced with
ActionPoint options and warrants by applying the exchange ratio.  ActionPoint
expects to issue approximately 4.4 million shares of ActionPoint common stock,
and options and warrants to purchase approximately 2.2 million shares of
ActionPoint common stock.  The actual number of shares of ActionPoint common
stock, options and warrants to be issued will be determined on the effective
date of the merger.  The merger is subject to shareholder approval and is
expected to close in June 2002.



As a condition to the merger, the Company and at least 75% of
the subordinated note holders must enter into a note conversion agreement, under
which the outstanding principal and interest of the subordinated notes will be
converted into shares of the Company's common stock immediately prior to, and
contingent upon, the consummation of the merger at a conversion price of
approximately $0.375 per share per $1.00 of principal and interest of the
subordinated notes.

During January 2002, the Company adopted the 2002 equity incentive plan.
As of May 31, 2002, options to acquire 140,843,144 shares of Captiva common stock had been
granted under this plan.  Options to acquire 35,229,764 shares of common stock have a per
share exercise price of $0.008, which was a special grant at less than fair market value.
These options will vest 100% upon the consummation of the merger. Options to
acquire 105,613,380 shares of Captiva common stock have a per share exercise price of
$0.0379, which was the estimated fair market value of the underlying shares of Captiva
common stock on the date of grant.
Of these options, 39,713,551 will vest 50% upon the consummation of the merger and
then monthly over the two years subsequent to the merger, and 65,899,829 will vest
according to two possible schedules:  either 15% upon the consummation of the merger,
35% upon the one year anniversary of the merger and then monthly over the remaining
three years or 25% will vest one year from the date of grant and the remaining options
will vest monthly over the next three years.
Accordingly, the intrinsic value of the vested portion of these shares, as measured
on the merger consummation date, will be recorded as a change in the results of operations
in the historical financial statements of the Company in the period immediately prior
to the merger.

In January 2002, the Company committed to reprice outstanding employee options to
purchase 8,730,419 shares of common stock, contingent upon the consummation of the merger.
The exercise prices subsequent to the repricing will be $0.008 per share for options
to purchase 6,083,414 shares of Captiva common stock and $0.024 per share for options to
purchase 2,647,005 shares of Captiva common stock. All of these options will be fully
vested upon the consummation of the merger.  To the extent employees do not exercise the
options to purchase 6,083,414 shares of Captiva common stock, such options will be forfeited
upon the consummation of the merger.  Because the modification of
these options is contingent upon the merger, the Company will record an immediate
charge in its historical financial statements upon consummation of the merger.
The charge will be equivalent to the difference between the fair market value of its
common stock on the merger consummation date and the exercise price of the repriced
options multiplied by the number of options.

F-17

---

ANNEX A



AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

among

ACTIONPOINT, INC.,

CONDOR MERGER CORP.

and

CAPTIVA SOFTWARE CORPORATION

Dated as of March 4, 2002





A-1

---



TABLE OF CONTENTS

`Page
                                                                  ----
ARTICLE I  THE MERGER.............................................A-6
        SECTION 1.01  The Merger..................................A-6
        SECTION 1.02  Effective Time; Closing.....................A-6
        SECTION 1.03  Effect of the Merger........................A-7
        SECTION 1.04  Articles of Incorporation; Bylaws...........A-7
        SECTION 1.05  Directors and Officers......................A-7
ARTICLE II  MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES........A-7
        SECTION 2.01  Merger Consideration........................A-7
        SECTION 2.02  Exchange of Certificates....................A-8
        SECTION 2.03  Stock Transfer Books........................A-10
        SECTION 2.04  Company Stock Options; Company Warrants.....A-10
        SECTION 2.05  Dissenting Shares...........................A-11
ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY........A-11
        SECTION 3.01  Organization and Qualification..............A-11
        SECTION 3.02  Articles of Incorporation and Bylaws........A-12
        SECTION 3.03  Subsidiaries................................A-12
        SECTION 3.04  Capitalization..............................A-13
        SECTION 3.05  Authority Relative to This Agreement........A-14
        SECTION 3.06  No Conflict; Required Filings and Consents..A-15
        SECTION 3.07  Permits; Compliance.........................A-15
        SECTION 3.08  Financial Statements........................A-16
        SECTION 3.09  Absence of Certain Changes or Events........A-16
        SECTION 3.10  Absence of Litigation.......................A-16
        SECTION 3.11  Employee Benefit Plans; Labor Matters.......A-17
        SECTION 3.12  Contracts...................................A-19
        SECTION 3.13  Environmental Matters.......................A-21
        SECTION 3.14  Intellectual Property.......................A-22
        SECTION 3.15  Taxes.......................................A-24
        SECTION 3.16  Vote Required...............................A-26
        SECTION 3.17  Assets; Absence of Liens and Encumbrances...A-26
        SECTION 3.18  Certain Interests...........................A-27
        SECTION 3.19  Insurance Policies..........................A-27
        SECTION 3.20  Brokers.....................................A-27
        SECTION 3.21  State Takeover Statutes.....................A-27
        SECTION 3.22  Customers and Suppliers.....................A-27
        SECTION 3.23  Powers of Attorney..........................A-27
        SECTION 3.24  Offers......................................A-27
        SECTION 3.25  Books and Records...........................A-27
        SECTION 3.26  Affiliates..................................A-28
        SECTION 3.27  Opinion of Financial Advisor................A-28
ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PARENT
            AND MERGER SUB......................................  A-28
        SECTION 4.01  Organization and Qualification..............A-28
        SECTION 4.02  Certificate of Incorporation and Bylaws.....A-29
        SECTION 4.03  Subsidiaries................................A-29
        SECTION 4.04  Capitalization..............................A-29
        SECTION 4.05  Authority Relative to This Agreement........A-30
        SECTION 4.06  No Conflict; Required Filings and Consents..A-31
        SECTION 4.07  Permits; Compliance.........................A-31


A-2



        SECTION 4.08  SEC Filings; Financial Statements...........A-32
        SECTION 4.09  Undisclosed Liabilities.....................A-32
        SECTION 4.10  Absence of Certain Changes or Events........A-32
        SECTION 4.11  Absence of Litigation.......................A-32
        SECTION 4.12  Employee Benefit Plans; Labor Matters.......A-33
        SECTION 4.13  Contracts...................................A-35
        SECTION 4.14  Environmental Matters.......................A-37
        SECTION 4.15  Intellectual Property.......................A-37
        SECTION 4.16  Taxes.......................................A-39
        SECTION 4.17  Vote Required...............................A-41
        SECTION 4.18  Assets; Absence of Liens and Encumbrances...A-41
        SECTION 4.19  Certain Interests...........................A-41
        SECTION 4.20  Insurance Policies..........................A-42
        SECTION 4.21  Brokers.....................................A-42
        SECTION 4.22  State Takeover Statutes.....................A-42
        SECTION 4.23  Customers and Suppliers.....................A-42
        SECTION 4.24  Powers of Attorney..........................A-42
        SECTION 4.25  Offers......................................A-42
        SECTION 4.26  Books and Records...........................A-42
        SECTION 4.27  Opinion of Financial Advisor................A-42
        SECTION 4.28  Interim Operations of Merger Sub............A-42
        SECTION 4.29  Rights Agreement............................A-43
ARTICLE V  CONDUCT OF BUSINESSES PENDING THE MERGER...............A-43
        SECTION 5.01  Conduct of the Company Pending the Merger...A-43
        SECTION 5.02  Company Litigation..........................A-45
        SECTION 5.03  Company Notification of Certain Matters.....A-45
        SECTION 5.04  Conduct of Parent and the Parent
                      Subsidiaries Pending the Merger.............A-46
        SECTION 5.05  Parent Litigation...........................A-48
        SECTION 5.06  Parent Notification of Certain Matters......A-48
ARTICLE VI  ADDITIONAL AGREEMENTS.................................A-48
        SECTION 6.01  Registration Statement; Joint Proxy
                      Statement...................................A-48
        SECTION 6.02  Company Shareholders' Meeting...............A-51
        SECTION 6.03  Parent Stockholders' Meeting................A-51
        SECTION 6.04  Access to Information; Confidentiality;
                      Legal Proceedings...........................A-51
        SECTION 6.05  No Company Solicitation of Transactions.....A-52
        SECTION 6.06  No Parent Solicitation of Transactions......A-53
        SECTION 6.07  Employee Benefits Matters...................A-54
        SECTION 6.08  Further Action; Consents; Filings;
                      Takeover Laws...............................A-55
        SECTION 6.09  Plan of Reorganization......................A-56
        SECTION 6.10  Public Announcements........................A-56
        SECTION 6.11  Affiliate Agreements........................A-56
        SECTION 6.12  Indemnification of Officers and Directors...A-56
        SECTION 6.13  Section 16 Relief...........................A-57
        SECTION 6.14  WARN Act....................................A-57
        SECTION 6.15  Conversion Schedule.........................A-57
        SECTION 6.16  Lock-Up.....................................A-57
        SECTION 6.17  Obligations of Merger Sub...................A-58
        SECTION 6.18  Company Capitalization......................A-58
        SECTION 6.19  Parent Capitalization.......................A-58
        SECTION 6.20  Listing.....................................A-58
        SECTION 6.21  Note Amendment..............................A-58
        SECTION 6.22  Parent Charter Amendment....................A-58
        SECTION 6.23  Company Investors' Rights Agreement.........A-58


A-3



ARTICLE VII  CONDITIONS TO THE MERGER.............................A-58
        SECTION 7.01  Conditions to the Obligations of
                      Each Party..................................A-58
        SECTION 7.02  Conditions to the Obligations of Parent
                      and Merger Sub..............................A-59
        SECTION 7.03  Conditions to the Obligations of
                      the Company.................................A-60
ARTICLE VIII  TERMINATION, AMENDMENT, WAIVER AND EXPENSES.........A-61
        SECTION 8.01  Termination.................................A-61
        SECTION 8.02  Effect of Termination.......................A-63
        SECTION 8.03  Amendment...................................A-63
        SECTION 8.04  Waiver......................................A-63
        SECTION 8.05  Expenses....................................A-64
        SECTION 8.06  Payment.....................................A-64
ARTICLE IX  GENERAL PROVISIONS....................................A-65
        SECTION 9.01  Non Survival of Representations, Warranties
                      and Agreements..............................A-65
        SECTION 9.02  Notices.....................................A-65
        SECTION 9.03  Certain Definitions.........................A-66
        SECTION 9.04  Severability................................A-69
        SECTION 9.05  Assignment; Binding Effect; Benefit.........A-69
        SECTION 9.06  Incorporation of Exhibits...................A-70
        SECTION 9.07  Specific Performance........................A-70
        SECTION 9.08  Governing Law; Forum........................A-70
        SECTION 9.09  Time of the Essence.........................A-70
        SECTION 9.10  Waiver of Jury Trial........................A-70
        SECTION 9.11  Construction................................A-70
        SECTION 9.12  Further Assurances..........................A-70
        SECTION 9.13  Headings....................................A-71
        SECTION 9.14  Counterparts................................A-71
        SECTION 9.15  Entire Agreement............................A-71



                EXHIBITS AND SCHEDULES

Exhibit A          Form of Company Voting Agreement
Exhibit B          Form of Parent Voting Agreement
Exhibit C          Amended and Restated Articles of Incorporation of the
                   Surviving Corporation (to be filed and become effective
                   at the Effective Time)
Exhibit D          Amended and Restated Articles of Incorporation of the
                   Company (to be filed and become effective prior to the
                   Effective Time)
Exhibit E          Form of Affiliate Agreement
Exhibit F          Form of Company Lock-Up Agreement


Schedule 1         Employment Agreement Schedule
Schedule 1.06(a)   Members of the Board of Directors of Parent at the Effective Time
Schedule 7.02(g)   Persons Entering Into Affiliate Agreements`

A-4

---



AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as
of March 4, 2002 (this "Agreement"), among ActionPoint Inc., a Delaware
corporation ("Parent"), Condor Merger Corp., a California corporation and
a wholly owned subsidiary of Parent ("Merger Sub"), and Captiva Software
Corporation, a California corporation (the "Company").

W I T N E S S E T H

WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the California General Corporation Law (the
"CGCL"), Parent and the Company will enter into a business combination
transaction pursuant to which Merger Sub will merge with and into the Company
(the "Merger") with the Company as the surviving corporation in the
Merger;

WHEREAS, the Board of Directors of the Company has
(i) unanimously determined that the Merger is consistent with and in
furtherance of the long-term business strategy of the Company and fair to, and
in the best interests of, the Company and its shareholders,
(ii) unanimously approved the Company Charter Amendment (as defined below),
this Agreement (including the principal terms hereof), the Merger, and the other
transactions contemplated by this Agreement, and (iii) determined to
unanimously recommend that the shareholders of the Company approve the Company
Charter Amendment, this Agreement (including the principal terms hereof) and the
Merger;

WHEREAS, the Boards of Directors of each of Parent and Merger
Sub have (i) determined that the Merger is advisable, consistent with and
in furtherance of the long-term business strategy of Parent and fair to, and in
the best interests of, Parent and its stockholders, (ii) approved and
adopted this Agreement, the Merger, and the other transactions contemplated by
this Agreement and (iii) determined to unanimously recommend that the
stockholders of Parent approve the issuance of Parent Common Sock (as defined
below) pursuant to the Merger (the "Share Issuance");

WHEREAS, the Board of Directors of Parent has
(i) determined that the Parent Charter Amendment (as defined below) is
advisable and (ii) determined to unanimously recommend that the
Stockholders of Parent approve the Parent Charter Amendment;

WHEREAS, for Federal income tax purposes, the Merger is
intended to qualify as a reorganization under the provisions of
Section 368(a) of the United States Internal Revenue Code of 1986, as
amended (the "Code");

WHEREAS, pursuant to the Merger, (i) each outstanding share
of common stock of the Company ("Company Common Stock"), (ii) all
outstanding options and other rights to acquire or receive shares of Company
Common Stock and (iii) each outstanding warrant to acquire or receive shares of
Company Common Stock (a "Company Warrant") that does not by its terms
terminate at or prior to the Effective Time (as defined below) shall be
converted into the right to receive shares of Parent's authorized common stock,
QAGQ
determined in this Agreement;

WHEREAS, as a condition and inducement to Parent's and Merger
Sub's entering into this Agreement and incurring the obligations set forth
herein, concurrently with the execution and delivery of this Agreement, certain
of the Company shareholders are entering into a voting agreement with Parent (a
"Company Voting Agreement"), dated the date hereof, in the form attached
hereto as Exhibit A;

WHEREAS, as a condition and inducement to the Company's
entering into this Agreement and incurring the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, certain of the
Parent stockholders are entering into a voting agreement with the Company (a
"Parent Voting Agreement"), dated the date hereof, in the form attached
hereto as Exhibit B;

A-5

---

WHEREAS, as a condition and inducement to Parent's
willingness to enter into this Agreement, concurrently with the execution and
delivery of this Agreement, certain of the holders of Senior Subordinated
Secured Convertible Promissory Notes (the "Senior Convertible Notes") and
the holders of Amended and Restated Senior Subordinated Secured Promissory Notes
(the "2000 Senior Notes," together with the Senior Convertible Notes, the
"Notes"), issued by the Company on August 1, 2000, are entering into
Amendment No. 1 to Note and Preferred Stock Purchase Agreement with the Company
(the "Note Amendment Agreement") pursuant to which the Senior Convertible
Notes will be amended and restated as the Amended and Restated Subordinated
Convertible Promissory Notes and the 2000 Senior Notes will be amended and
restated as the Second Amended and Restated Subordinated Convertible Promissory
Notes (collectively, the amended and restated Senior Convertible Notes and the
2000 Senior Notes are referred to herein as the "Amended Notes");

WHEREAS, as a condition and inducement to Parent's
willingness to enter into this Agreement, concurrently with the execution and
delivery of this Agreement, certain of the holders of the Notes are entering
into a Note Conversion Agreement with the Company (the "Note Conversion
Agreement") pursuant to which the outstanding principal and interest under
the Notes will be converted into shares of Company Common Stock immediately
prior to, and contingent upon, the consummation of the Merger;

WHEREAS, the Board of Directors of the Company has determined
that the conversion of the Notes into shares of Company Common Stock effective
immediately prior to and contingent upon the consummation of the Merger (the
"Note Conversion") pursuant to the terms of the Note Conversion Agreement
is fair to and in the best interest of the shareholders of the Company who are
not holders of the Notes;

WHEREAS, as a condition and inducement to Parent's
willingness to enter into this Agreement, concurrently with the execution and
delivery of this Agreement, each individuals named on Schedule 1 attached hereto
are entering into an Employment Agreement with Parent;

WHEREAS, as a condition and inducement to Parent's
willingness to enter into this Agreement, concurrently within the execution and
delivery of this Agreement, certain of the Company shareholders are entering
into a Company Lock-Up Agreement (as defined below);

WHEREAS, as a condition and inducement to the Company's
willingness to enter into this Agreement, concurrently within the execution and
delivery of this Agreement, the officers and directors of Parent are entering
into a Parent Lock-Up Agreement; and

WHEREAS, certain terms used in this Agreement are defined in
Section 9.03 of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Merger Sub and the Company hereby agree as follows:

ARTICLE ITHE MERGER

SECTION 1.01 The
Merger. Upon the terms of this Agreement and subject to the
conditions set forth in this Agreement, and in accordance with the CGCL, at the
Effective Time (as defined in Section 1.02), Merger Sub shall be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation of the Merger (the "Surviving
Corporation").

SECTION 1.02 Effective Time; Closing. No later than the
third business day following the satisfaction or, if permissible, written waiver
of the last condition set forth in Article VII remaining to be satisfied
(or such other date as may be mutually agreed by the parties hereto), the
parties hereto shall cause the Merger to be consummated by (i) filing an
agreement of merger (the "Agreement of Merger") with the Secretary of
State of the State of California in such form as is required by, and executed in
accordance with, the relevant provisions of the

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SECTION 1.03 Effect
of the Merger. At and after the Effective Time, the Merger shall
have the effects as set forth in the applicable provisions of the CGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of each of the
Company and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of each of the
Company and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.

SECTION 1.04 Articles of Incorporation; Bylaws

1. At the Effective Time, the Articles of Incorporation
of the Company as the Surviving Corporation shall be amended and restated in the
form attached hereto as Exhibit C.
2. At the Effective Time, the Bylaws of the Company as the
Surviving Corporation shall be amended to read the same as the Bylaws of Merger
Sub as in effect immediately prior to the Effective Time.

SECTION 1.05 Directors and Officers of Merger Sub. The
directors of Merger Sub immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and Bylaws of the Surviving
Corporation, and the officers of Merger Sub immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and
qualified.

SECTION 1.06 Directors and Officers of Parent.

1. Prior to the Effective Time, Parent shall take such
action so that, from and after the Effective Time, until duly changed in
compliance with applicable Law and the Certificate of Incorporation and Bylaws
of Parent, the Board of Directors of Parent shall consist of the seven members
listed on Schedule 1.06(a) attached hereto.
2. Parent shall take such action so that, upon the Effective
Time, the following persons, subject to availability, shall hold the following
positions with Parent: Kimra D. Hawley shall be the Chairperson of the Board of
Directors, Reynolds C. Bish shall be the Chief Executive Officer of Parent and
Stephen Francis shall be the Chief Operating Officer of Parent.

ARTICLE IIMERGER CONSIDERATION;
EXCHANGE OF CERTIFICATES

SECTION 2.01 MERGER CONSIDERATION.

1. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the holders
of any of the following securities:
2. Each share of Company Common Stock (all issued and
outstanding shares of Company Common Stock being hereinafter collectively
referred to as the "Company Shares"), issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares and any Company Shares
to be canceled pursuant to Section 2.01(a)(ii)) shall be converted, subject to
Section 2.02(e), into the right to receive that number of shares of Parent
Common Stock equal to the quotient (the "Exchange Ratio") obtained by
dividing (i) the difference between (a) the number of shares of Parent
Common Stock outstanding immediately prior to the Effective

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Time and (b) one
(the "Parent Shares"), by (ii) the sum of (A) the number of shares of
Company Common Stock issued and outstanding immediately prior to the Effective
Time and (B) the number of shares of Company Common Stock issuable upon exercise
of all of the Company Warrants issued and outstanding on the date of this
Agreement; provided that any principal amount and interest outstanding
under any of the Amended Notes that has not been converted immediately prior to
the Effective Time pursuant to the terms of the Note Conversion Agreement into
shares of Company Common Stock shall be deemed to have been converted into
Company Common Stock pursuant to the terms of the Note Conversion Agreement
immediately prior to the Effective Time for the purpose of calculating the
number of shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time pursuant to (ii)(A) above. At the Effective Time,
each Company Share shall be canceled, cease to be outstanding and cease to exist
and each holder of Company Shares shall thereafter cease to have any rights with
respect to such shares, except the right to receive, without interest, Parent
Shares in accordance with this Section 2.01(a)(i) and cash for fractional Parent
Shares in accordance with Section 2.02(e).
3. Each share of Company Stock held in the treasury of the
Company and each share of Company Stock owned by Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company immediately prior
to the Effective Time shall be cancelled and extinguished without any conversion
thereof and no payment or distribution shall be made with respect
thereto.
4. Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
exchanged for one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation. The stock certificate evidencing shares of
common stock of Merger Sub shall then evidence ownership of the outstanding
shares of common stock of the Surviving Corporation.

SECTION 2.02 Exchange of Certificates.

1. Exchange Agent. Within five business days after
the Effective Time, Parent shall deposit, or shall cause to be deposited, with
any bank or trust company designated by Parent and reasonably satisfactory to
the Company (the "Exchange Agent"), for the benefit of the holders of
Company Shares, for exchange in accordance with this Article II through the
Exchange Agent, certificates representing that number of Parent Shares that is
issuable pursuant to Section 2.01 as of the Effective Time and cash, from time
to time as required to make payments in lieu of any fractional shares pursuant
to Section 2.02(e) (such cash and certificates for Parent Shares, together with
any dividends or distributions with respect thereto, being hereinafter referred
to as the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the Parent Shares contemplated to be issued
pursuant to Section 2.01 out of the Exchange Fund. Except as contemplated by
Section 2.02(f) hereof, the Exchange Fund shall not be used for any other
purpose.
2. Exchange Procedures. Within five business days
after the Effective Time, Parent shall cause the Exchange Agent to mail to each
record holder of a certificate or certificates (a "Certificate" or
"Certificates") (i) a letter of transmittal (a "Letter of
Transmittal") in customary form and (ii) instructions for use in
surrendering such Certificates and receiving Parent Shares pursuant to
Section 2.01. Upon surrender to the Exchange Agent of a Certificate for
cancellation, together with a Letter of Transmittal, duly executed and completed
in accordance with the instructions thereto, and such other documents as may be
reasonably required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive, in exchange therefor, a certificate
representing that number of whole Parent Shares that such holder has the right
to receive in respect of the Company Shares formerly represented by such
Certificate (after taking into account all Company Shares then held by such
holder), cash in lieu of any fractional Parent Shares to which such holder is
entitled pursuant to Section 2.02(e) and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.02(c), and the Certificate
so surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Company Shares that is not registered in the transfer records of
the Company, a certificate representing the proper number of Parent Shares, cash
in lieu of any fractional Parent Shares to which such holder is entitled
pursuant to Section 2.02(e) and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.02(c) may be issued to a
transferee if the Certificate representing such Company Shares is presented to
the Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence satisfactory to Parent that any applicable share
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.02, each Certificate shall be deemed at all times after the Effective Time to
represent only the right to receive upon such surrender the certificate
representing

A-8



Parent Shares, cash in lieu of any fractional Parent Shares to
which such holder is entitled pursuant to Section 2.02(e) and any dividends or
other distributions to which such holder is entitled pursuant to Section
2.02(c).
3. Distributions with Respect to Unexchanged Parent
Shares. No dividends or other distributions declared or made after the
Effective Time with respect to Parent Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent Shares represented thereby, and no cash payment in lieu of
any fractional shares shall be paid to any such holder pursuant to Section
2.02(e), until the holder of such Certificate shall surrender such Certificate
in accordance with this Section 2.02. Subject to the effect of escheat, tax
or other applicable Laws (as defined in Section 3.06(a)), following surrender of
any such Certificate, there shall be paid to the holder of the certificates
representing whole Parent Shares issued in exchange therefor, without interest,
(i) the amount of any cash payable with respect to a fractional Parent
Share to which such holder is entitled pursuant to Section 2.02(e) and the
amount of dividends or other distributions with a record date after the
Effective Time and theretofore payable with respect to such whole Parent Shares
and (ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole Parent Shares.
4. No Further Rights in Company Shares. All Parent
Shares issued upon conversion of Company Shares in accordance with the terms
hereof and any cash paid pursuant to Section 2.02(c) or (e) shall be deemed to
have been issued in full satisfaction of all rights pertaining to such Company
Shares.
5. No Fractional Shares. No certificates or scrip
representing fractional Parent Shares shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of Parent.
Each holder of a fractional share interest shall be paid an amount in cash
(without interest) equal to the product obtained by multiplying (i) such
fractional share interest to which such holder (after taking into account all
fractional share interests then held by such holder) would otherwise be entitled
by (ii) the average closing price per share of Parent Shares for the 30 trading
day period up to and including the trading day immediately preceding the
Effective Time, as reported on The Nasdaq National Market. As promptly as
practicable after the determination of the amount of cash, if any, to be paid to
holders of fractional share interests, the Exchange Agent shall so notify
Parent, and Parent shall deposit such amount with the Exchange Agent and shall
cause the Exchange Agent to forward payments to such holders of fractional share
interests subject to and in accordance with the terms of this Section
2.02.
6. No Liability. Neither Parent nor the Surviving
Corporation shall be liable to any holder of Company Shares for any such shares
of Parent Common Stock (or dividends or distributions with respect thereto) or
cash properly and legally delivered to a public official pursuant to any
abandoned property, escheat or similar Law (as defined in Section
3.06(a)).
7. Withholding Rights. Each of the Exchange Agent,
the Surviving Corporation and Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of Company Shares such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign Tax (as defined in Section 3.15(c)) Law. To the extent
that amounts are so withheld by the Exchange Agent, the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the Company
Shares in respect of which such deduction and withholding were made by the
Exchange Agent, the Surviving Corporation or Parent, as the case may
be.
8. Affiliates. Notwithstanding anything to the
contrary contained in this Agreement, no Parent Shares (or certificates
therefor) shall be issued in exchange for any Certificates to any person who,
prior to the Effective Time, may be an "affiliate" (as that term is used in
Rule 145 under the Securities Act of 1933, as amended (together with the
rules and regulations promulgated thereunder, the "Securities Act")) of
the Company (each such person being an "Affiliate") until such person
shall have delivered to Parent and the Company a duly executed Affiliate
Agreement as contemplated by Section 6.11.
9. Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and, if

A-9


required by the Parent, the posting by such person of a bond, in such reasonable
amount as Parent may direct, as indemnity against any claim that may be made
against it with respect to such Certificate, Parent shall issue in exchange for
such lost, stolen or destroyed Certificate, the applicable Parent Shares and
cash in lieu of any fractional shares to which such person is otherwise entitled
pursuant to Section 2.20(e) (and dividends or other distributions pursuant to
Section 2.02(c)) to which such person is entitled pursuant to the provisions of
this Article II.
10. Return of Parent Shares. Promptly following the
end of the fifth full calendar month after the Effective Time, the Exchange
Agent shall return to Parent all of the remaining Parent Shares and the Exchange
Agent's duties shall terminate. Thereafter, upon the surrender of a Certificate
to Parent and such other documents as may reasonably be required by Parent, and
subject to applicable abandoned property, escheat and similar Laws, the holder
of such Certificate shall be entitled to receive from Parent in exchange
therefor the applicable Parent Shares (and dividends or other distributions
pursuant to Section 2.02(c)) without any interest thereon.

SECTION 2.03 Stock
Transfer Books. At the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no further registration of
transfers of Company Shares thereafter on the records of the Company. From and
after the Effective Time, the holders of certificates representing Company
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Company Shares, except as otherwise provided in
this Agreement or by Law. On or after the Effective Time, any Certificates
presented to the Exchange Agent or Parent for any reason shall be converted into
Parent Shares, any cash in lieu of fractional Parent Shares to which the holders
thereof are entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which the holders thereof are entitled pursuant to
Section 2.02(c).

SECTION 2.04 Company Stock Options; Company
Warrants.

1. At the Effective Time, Parent shall assume all options to
purchase Company Common Stock issued by the Company pursuant to the Company
Stock Plan and the Company 2002 Stock Plan (each as defined in Section 3.04(b))
whether vested or unvested and whether exercisable or unexercisable (each a
"Company Option"); provided, however, that for any optionee residing in
the United Kingdom, the assumption by Parent of the option and the ability of
the optionee to exercise the assumed option will be conditioned upon the
agreement of the optionee to execute, upon the request of Parent, an Inland
Revenue approved joint election agreement that shifts to the optionee any
Secondary Class 1 National Insurance Contribution liability of the Parent and/or
any UK employer of the optionee in connection with the exercise, assignment,
release, or cancellation of the assumed option. The Company's repurchase right
with respect to any unvested shares acquired by the exercise of Company Options
shall be assigned to Parent by virtue of the Merger and without any further
action on the part of the Company or the holder of such unvested shares.
Immediately after the Effective Time (including, without limitation, any
repurchase rights or vesting provisions) each Company Option outstanding
immediately prior to the Effective Time shall be deemed to constitute an option
to acquire, on the same terms and conditions as were applicable under such
Company Option at the Effective Time (including, without limitation, any
repurchase rights or vesting provisions), such number of shares of Parent Common
Stock (rounded down to the nearest whole number) that is equal to the number of
shares of Company Common Stock subject to the unexercised portion of such
Company Option multiplied by the Exchange Ratio. The per share exercise price
for the shares of Parent Common Stock issuable upon exercise of such assumed
Company Option shall be equal to the exercise price per share of such Company
Option in effect immediately prior to the Effective Time divided by the Exchange
Ratio (the exercise price per share, as so determined, being rounded up to the
nearest whole cent). The term, vesting schedule, status as an "incentive stock
option" under Section 422 of the Code, if applicable, and all of the other
terms of the Company Options shall otherwise remain unchanged. It is the
intention of the parties that each Company Option so assumed by Parent shall
qualify following the Effective Time as an incentive stock option as defined in
Section 422 of the Code to the extent permitted under Section 422 of the
Code and to the extent such Company Option qualified as an incentive stock
option prior to the Effective Time.
2. Within 45 business days after the Effective Time, Parent
will issue to each person who, immediately prior to the Effective Time, was a
holder of a Company Option a document evidencing the foregoing assumption of
such option by Parent. Within 20 calendar days after the Effective Time, Parent
shall file with the SEC (as defined in Section 4.08(a)) a registration statement
on Form S-8 (or any successor or other appropriate form) that will register
the shares of Parent Common Stock subject to assumed Company Options to the
extent

A-10



permitted by Federal securities laws and shall use its commercially
reasonable efforts to maintain the effectiveness of such registration statement
or registration statements for so long as such options remain
outstanding.
3. At the Effective Time, each Company Warrant, whether or
not contingent or earned and whether exercisable or unexercisable, that does not
terminate by its terms at or prior to the Effective Time, shall be assumed by
Parent and shall represent a warrant to acquire shares of Parent Common Stock in
accordance with its terms. Each Company Warrant so assumed shall continue to
have, and be subject to, the same terms and conditions set forth in such Company
Warrant immediately prior to the Effective Time, except that (i) such
Company Warrant shall be exercisable (or become exercisable in accordance with
its terms) for that number of whole shares of Parent Common Stock (rounded down
to the nearest whole number) equal to the product of the number of shares of
Company Common Stock that were issuable upon exercise of such Company Warrant
immediately prior to the Effective Time multiplied by the Exchange Ratio, and
(ii) the per share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed Company Warrant shall be equal to the
exercise price per share of Company Stock at which such Company Warrant was
exercisable immediately prior to the Effective Time divided by the Exchange
Ratio (the exercise price per share, as so determined, being rounded up to the
nearest whole cent).

SECTION 2.05 Dissenting Shares.

1. Notwithstanding any provision of this Agreement to the
contrary, Company Shares that are outstanding immediately prior to the Effective
Time and which are held by shareholders who have exercised and perfected
dissenters' rights for such shares of Company Stock in accordance with the CGCL
(collectively, the "Dissenting Shares") shall not be converted into or
represent the right to receive the applicable Parent Shares. Such shareholders
shall be entitled to receive payment of the appraisal value of such Company
Shares held by them in accordance with the CGCL, unless and until such
shareholders fail to perfect or effectively withdraw or otherwise lose their
dissenters' rights under the CGCL. All Dissenting Shares held by shareholders
who shall have failed to perfect or who effectively shall have withdrawn or lost
their right to receive the appraisal value of such Company Shares under the CGCL
shall thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the applicable
Parent Shares, without any interest thereon, upon the surrender, in the manner
provided in Section 2.02, of the corresponding Certificate.
2. The Company shall give Parent (i) prompt notice of
any demands for fair market value received by the Company, withdrawals of such
demands, and any other related instruments served pursuant to the CGCL and
received by the Company and (ii) the opportunity to direct all negotiations
and proceedings with respect to demands for appraisal under the CGCL. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.

ARTICLE IIIREPRESENTATIONS AND
WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Parent and
Merger Sub that the statements contained in this Article III are true and
correct except as set forth in the disclosure schedule delivered by the Company
to Parent and Merger Sub concurrently with the execution of this Agreement (the
"Company Disclosure Schedule"). The Company Disclosure Schedule shall be
arranged according to specific sections in this Article III and shall provide
exceptions to, or otherwise qualify in reasonable detail, only the corresponding
section in this Article III and any other section hereof where it is clear, upon
a reading of such disclosure without any independent knowledge on the part of
the reader regarding the matter disclosed, that the disclosure is intended to
apply to such other section.

SECTION 3.01 Organization and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to own, lease and otherwise hold and operate its properties and other
assets and to carry on its business as it is now being conducted and as
currently proposed to be conducted, except where the failure to be so organized,
existing or in good standing or to have such corporate power and authority has
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect (as defined below). The

A-11

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SECTION 3.02 Articles of Incorporation and Bylaws. The
Company has heretofore made available to Parent a complete and correct copy of
(a) the Articles of Incorporation and the Bylaws of the Company including
all amendments thereto, (b) the minute books containing all consents,
actions and meeting of the stockholders of the Company and the Company's Board
of Directors and any committees thereof, and (c) the stock transfer books
of the Company setting forth all issuances or transfers of any capital stock of
the Company. Such Articles of Incorporation and Bylaws are in full force and
effect. The Company is not in violation of any of the provisions of its Articles
of Incorporation or Bylaws. The corporate minute books, stock certificate books,
stock registers and other corporate records of the Company are complete and
accurate, and the signatures appearing on all documents contained therein are
the true or facsimile signatures of the persons purported to have signed the
same.

SECTION 3.03 Subsidiaries.

1. Section 3.03(a) of the Company Disclosure Schedule
sets forth: (i) the name of each corporation, partnership, limited
liability company, joint venture or other entity in which the Company has,
directly or indirectly, an equity interest representing 50% or more of the
capital stock thereof or other equity interests therein (individually, a
"Company Subsidiary" and, collectively, the "Company
Subsidiaries"); and (ii) the number and type of outstanding equity
securities of each Company Subsidiary and a list of the holders
thereof.
2. Each Company Subsidiary is a corporation duly organized,
validly existing and in corporate and tax good standing under the laws of the
jurisdiction of its incorporation. Each Company Subsidiary is duly qualified to
conduct business and is in good standing under the laws of each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
requires such qualification, except where the failure to be so qualified or in
good standing has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Each
Company Subsidiary has all requisite power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. The Company has delivered or made available to Parent complete and
accurate copies of the charter, Bylaws or other organizational documents of each
Company Subsidiary. No Company Subsidiary is in default under or in violation of
any provision of its charter, Bylaws or other organizational documents. All of
the issued and outstanding shares of capital stock of each Company Subsidiary
are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. All shares of each Company Subsidiary are held of record or
owned beneficially by either the Company or another Company Subsidiary and are
held or owned free and clear of any restriction on transfer (other than
restrictions under Federal or state securities laws), claim, security interest,
option, warrant, right, contract, call, commitment, equity or demand. There are
no outstanding or authorized options, warrants, rights, agreements or
commitments to which the Company or any Company Subsidiary is a party or which
are binding on any of them providing for the issuance, disposition or
acquisition of any capital stock of any Company Subsidiary. There are no

A-12


outstanding stock appreciation, phantom stock or similar rights with respect to
any Company Subsidiary. There are no voting trusts, proxies or other agreements
or understandings with respect to the voting of any capital stock of any Company
Subsidiary.
3. The Company does not control, directly or indirectly, or
have any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business association which is not a Company Subsidiary. There are no
contractual obligations of the Company to provide funds to, or make any
investment in (whether in the form of a loan, capital contribution or
otherwise), any other person.

SECTION 3.04 Capitalization.

1. The authorized capital stock of the Company consists of
70,000,000 shares of Company Common Stock,  2,873,564 shares of Company
Series A Preferred Stock ("Company Series A Preferred Stock"),
1,115,000 shares of Company Series B Preferred Stock ("Company
Series B Preferred Stock"), 4,500,000 shares of Company Series C
Preferred Stock ("Company Series C Preferred Stock"), 1,000,000
shares of Company Series D Preferred Stock ("Company Series D
Preferred Stock") and  29,000,000 shares of Company Series E
Preferred Stock ("Company Series E Preferred Stock," and,
collectively with the Company Series A Preferred Stock, Company Series B
Preferred Stock, Company Series C Preferred Stock, Company Series D
Preferred Stock, the "Company Preferred Stock," and, the Company Common
Stock together with the Company Preferred Stock, the "Company Stock"). As
of the date of this Agreement, (A)  2,515,587 shares of Company
Series A Preferred Stock are issued and outstanding, (B) 875,424
shares of Company Series B Preferred Stock are issued and outstanding,
(C) 2,188,553 shares of Company Series C Preferred Stock are issued
and outstanding, (D) 769,231 shares of Company Series D Preferred
Stock are issued and outstanding, and (E) 15,637,605 shares of Company
Series E Preferred Stock are issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable. Each share of Company
Series A Preferred Stock, Company Series B Preferred Stock and Company
Series C Preferred Stock is convertible into 1.321118 shares of Company
Common Stock and each share of Company Series D Preferred Stock and Company
Series E Preferred Stock is convertible into one share of Company Common
Stock. There are no other shares of Company Preferred Stock outstanding. As of
the date hereof, the outstanding shares of Company Common Stock, Company
Series A Preferred Stock, Company Series B Preferred Stock, Company
Series C Preferred Stock, Company Series D Preferred Stock and Company
Series E Preferred Stock are owned as set forth in Section 3.04(a) of
the Company Disclosure Schedule. Section 3.04(a) of the Company Disclosure
Schedule also provides a complete list and brief description of each repurchase
option or right of first refusal which is held by the Company and to which any
of such shares is subject (including the name of the owner and the number of
such shares held by such owner).
2. The Company has reserved (i) 11,394,609 shares of Company
Common Stock for issuance under the Company's Amended and Restated Stock
Option/Stock Issuance Plan (the "Company Stock Plan") of which options to
purchase 8,730,419 shares of Company Common Stock are outstanding as of the date
of this Agreement and (ii) 150,000,000 shares of Company Common Stock for
issuance under the Company's 2002 Equity Incentive Plan (the "Company 2002
Stock Plan") of which options to purchase 124,606,068 shares of Company
Common Stock are outstanding as of the date of this Agreement.
Section 3.04(b) of the Company Disclosure Schedule accurately sets forth
with respect to each Company Option that is outstanding as of December 31, 2001:
(i) the name of the holder of such Company Option; (ii) the total
number of shares of Company Common Stock that was originally subject to such
Company Option; (iii) the number of shares of Company Common Stock that
remain subject to such Company Option, (iv) the date on which such Company
Option was granted and the term of such Company Option; (v) the vesting
schedule and vesting commencement date for such Company Option; (vi) the
exercise price per share of Company Common Stock purchasable under such Company
Option; (vii) whether such Company Option has been designated an incentive
stock option ("Incentive Stock Option") as defined in Section 422 of
the Code; and (viii) the current employee or independent contractor status of
the holder of such Company Option. No Company Option will by its terms require
an adjustment in connection with the Merger, except as contemplated by this
Agreement. Neither the consummation of transactions contemplated by this
Agreement, nor any action taken or to be taken by Company in connection with
such transactions, will result in (i) any acceleration of exercisability or
vesting, whether or not contingent on the occurrence of any event after
consummation of the Merger, in favor of any optionee under any Company Option;
(ii) any additional benefits for any optionee under any Company Option; or
(iii) the inability of Parent after the Effective Time to exercise any right

A-13


or benefit held by Company prior to the Effective Time with respect to any
Company Option assumed by Parent or any shares of Company Common Stock
previously issued upon exercise of a Company Option, including, without
limitation, the right to repurchase an optionee's unvested shares on termination
of such optionee's employment. The assumption by Parent of Company Options in
accordance with Section 2.04(a) hereunder will not give rise to any event
described in clauses (i) through (iii) in the immediately preceding sentence or
constitute a breach of the Company Stock Plan, the Company 2002 Stock Plan or
any agreement entered into pursuant to such plans.
3. The Company has reserved 560,110 shares of Company Common
Stock for future issuance pursuant to the exercise of Company Warrants.
Section 3.04(c) of the Company Disclosure Schedule sets forth, with respect
to each Company Warrant issued to any person as of the date of this Agreement:
(i) the name of the holder of such Company Warrant; (ii) the total
number and type of shares of Company Stock that are subject to such Company
Warrant; (iii) the exercise price per share of Company Stock purchasable
under such Company Warrant; (iv) the total number of shares of Company Stock
with respect to which such warrant is immediately exercisable; (v) the
vesting schedule for such Company Warrant; and (vi) the term of such Company
Warrant.
4. Except as described in Section 3.04(b) above or as set
forth in Sections 3.04(b) and 3.04(c) of the Company Disclosure Schedule,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character, whether or not contingent, relating to the issued
or unissued capital stock of the Company or obligating the Company to issue or
sell any share of capital stock of, or other equity interest in, the Company.
All shares of Company Stock so subject to issuance, upon issuance in accordance
with the terms and conditions specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. The holders of Company Options and Company Warrants have been or
will be given, or shall have properly waived, any required notice of the Merger
prior to the Effective Time, and all such rights to a notice, if any, will
terminate at or prior to the Effective Time.
5. The Company does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.
6. All of the securities offered, sold, issued or, to
knowledge of the Company, assumed by the Company (i) have been offered,
sold or issued in compliance with the requirements of the Federal securities
laws and any applicable state securities or "blue sky" laws and (ii) are not
subject to any preemptive right, right of first refusal, right of first offer or
right of recission.
7. There are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any share of capital stock
of, or other equity interest in, the Company. There are no stockholder
agreements, voting trusts or other agreements or understandings to which the
Company is a party, or of which the Company is aware, that (i) relate to the
voting, registration or disposition of any securities of the Company, (ii) grant
to any person or group of persons the right to elect, or designate or nominate
for election, a director to the Board of Directors of the Company, or (iii)
grant to any person or group of persons information rights.

SECTION 3.05 Authority Relative to This
Agreement.

1. The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and, subject to obtaining the necessary approvals of the Company
shareholders, to consummate the Merger. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the Merger and
the other transactions contemplated by this Agreement have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the Merger and the other transactions contemplated by this Agreement
(other than the approval of this Agreement (including the principal terms
hereof) and the Merger by the Company shareholders as described in
Section 3.16 hereof and the filing and recordation of appropriate merger
documents as required by the CGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Merger Sub, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar

A-14


Laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity.
2. Without limiting the generality of the foregoing, the
Board of Directors of the Company, at a meeting duly called and held, has
unanimously (i) determined that the Merger and the other transactions
contemplated hereby are fair to, and in the best interests of, the Company and
its shareholders, (ii) approved the Company Charter Amendment, this
Agreement (including the principal terms hereof), the Merger and the other
transactions contemplated hereby in accordance with the provisions of the CGCL
and the Company's charter documents, and (iii) directed that the Company
Charter Amendment, this Agreement and the Merger be submitted to the Company
shareholders for their approval and (iv) resolved to recommend that the
Company shareholders vote in favor of the approval of the Company Charter
Amendment, this Agreement (including the principal terms hereof) and the
Merger.

SECTION 3.06 No
Conflict; Required Filings and Consents.

1. The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
(i) conflict with or violate the Articles of Incorporation or Bylaws of the
Company or any Company Subsidiary, (ii) assuming that all consents,
approvals, authorizations and other actions described in Section 3.06(b)
have been obtained and all filings and obligations described in
Section 3.06(b) have been made or complied with, conflict with or violate
in any material respect any foreign or domestic (Federal, state or local) law,
statute, ordinance, franchise, permit, concession, license, writ, rule,
regulation, order, injunction, judgment or decree ("Law") applicable to
the Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (iii) conflict
with, result in any material breach of or constitute a material default (or an
event which with notice or lapse of time or both would become a default) under,
require consent, approval or notice under, give to others any right of
termination, amendment, acceleration or cancellation of, require any payment
under, or result in the creation of a lien or other encumbrance on any property
or asset of the Company or any Company Subsidiary pursuant to, any material
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which any property or asset of the Company or any
Company Subsidiary is bound or affected.
2. The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, order, permit, or authorization from, or
registration, notification or filing with, any domestic or foreign governmental,
regulatory or administrative authority, agency or commission, any court,
tribunal or arbitral body, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental authority (a
"Governmental Entity"), except for the filing and recordation of
appropriate merger documents as required by the CGCL and for such other
consents, approvals, orders, permits, authorizations, registrations,
notifications or filings, which if not obtained or made could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.

SECTION 3.07 Permits; Compliance.

1. Each of the Company and each Company Subsidiary is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for the Company and each Company Subsidiary
to own, lease and otherwise hold and operate its properties and other assets and
to carry on its business as it is now being conducted and as currently proposed
to be conducted (the "Company Permits"), except where the failure of the
Company and each Company Subsidiary to possess such Company Permits could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. All Company Permits are in full force and effect and
will remain so after the Closing and no suspension or cancellation of any
Company Permit is pending or, to the knowledge of the Company, threatened.
Neither the Company nor any Company Subsidiary has received any notice or other
communication from any Governmental Entity regarding (i) any actual or
possible violation of or failure to comply with any term or requirement of any
Company Permit, or (ii) any actual or possible revocation, withdrawal,
suspension, cancellation, termination or modification of any Company
Permit.
2. Neither the Company nor any Company Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which the Company or any Company Subsidiary or any
property or asset of the Company or any Company Subsidiary is bound or affected,
or (iii) any Company Permit, except where the failure of the Company and
each Company Subsidiary to possess such Company Permits could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.

SECTION 3.08 Financial Statements.

1. The Company has delivered or made available to Parent
true and complete copies of (i) the audited consolidated balance sheets of
the Company and the Company Subsidiaries as of December 31, 1998, 1999, and
2000, and the related audited statements of operations, changes in stockholders'
equity and changes in cash flows for the years then ended, together with all
related notes and schedules thereto (collectively referred to herein as the
"Audited Financial Statements"), and (ii) the unaudited consolidated
balance sheet of the Company and the Company Subsidiaries as of
September 30, 2001 (the "Company Balance Sheet"), and the related
statements of operations, changes in stockholders' equity and changes in cash
flows for the nine months ended September 30, 2001 (collectively referred
to herein as the "Interim Financial Statements"). The Audited Financial
Statements and the Interim Financial Statements (including, in each case, any
notes thereto) were prepared in accordance with United States generally accepted
accounting principles ("U.S. GAAP") applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by U.S. GAAP) and
each present fairly, in all material respects, the consolidated financial
position of the Company and the Company Subsidiaries as at the respective dates
thereof and for the respective periods indicated therein, except as otherwise
noted therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which were not and are not expected, individually
or in the aggregate, to be material).
2. The Company and the Company Subsidiaries do not have any
debts, liabilities or obligations of any nature (whether known or unknown,
accrued or fixed, absolute or contingent, matured or unmatured, determined or
determinable, or as a guarantor or otherwise) ("Liabilities"), other than
Liabilities (i) that are fully reflected or reserved against on the Company
Balance Sheet, (ii) individually in an amount not exceeding $50,000
incurred since the date of the Company Balance Sheet, (iii) incurred in the
ordinary course of business consistent with past practice that could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, since the date of the Company Balance Sheet and
(iv) that would not be required to be reflected on, or reserved against, in
a balance sheet of the Company, or in the notes thereto, prepared in accordance
with the published rules and regulations of the SEC and U.S. GAAP. Reserves
are reflected on the Company Balance Sheet and on the books of account and other
financial records of the Company against all Liabilities of the Company as of
the date of the Company Balance Sheet in amounts that have been established on a
basis consistent with the past practice of the Company and in accordance with
U.S. GAAP. There are no outstanding warranty claims against the
Company.

SECTION 3.09 Absence of Certain Changes or Events. Since
September 30, 2001, except as contemplated by or as disclosed in this
Agreement, the Company and the Company Subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner consistent
with past practice and, since such date, (a) there has not been any Company
Material Adverse Effect and (b) the Company and the Company Subsidiaries
have not taken or legally committed to take any of the actions specified in
Sections 5.01(a) through 5.01(z).

SECTION 3.10 Absence of Litigation. There is no
litigation, suit, claim, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company or any Company
Subsidiary, or any property or asset owned or used by the Company or any Company
Subsidiary or any person whose liability the Company or any Company Subsidiary
has or may have assumed, either contractually or by operation of Law, before any
arbitrator or Governmental Entity (a "Company Legal Proceeding") that
could reasonably be expected, if resolved adversely to the Company, to
(i) impair the operations of the Company or any Company Subsidiary as
currently conducted, including, without limitation, any claim of infringement of
any intellectual property right, (ii) result in losses to the Company or
any Company Subsidiary in excess of $50,000,

A-16

---

SECTION 3.11Employee Benefit Plans; Labor
Matters.

1. Schedule 3.11(a) of the Company Disclosure Schedule
listsall employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
and all bonus, stock option, stock purchase, stock appreciation right,
restricted stock, phantom stock, incentive, deferred compensation, retiree
medical, disability or life insurance, cafeteria benefit, dependent care,
disability, director or employee loan, fringe benefit, sabbatical, supplemental
retirement, severance or other benefit plans, programs or arrangements, (whether
legally enforceable or not, whether formal or informal and whether in writing or
not) (each, a "Company Plan," and collectively, the "Company
Plans") to which the Company or any Company Subsidiary is a party, with
respect to which the Company or any Company Subsidiary has any obligation or
which are maintained, contributed to or sponsored by the Company or any Company
Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Company Subsidiary.
2. Each Company Plan is in writing and the Company has made
available to Parent a true and complete copy of each Company Plan (or a written
summary where the Company Plan is not in writing) and a true and complete copy
of each material document, if any, prepared in connection with each such Company
Plan, including, without limitation, and only if applicable, (i) a copy of
each trust or other funding arrangement, (ii) each summary plan description
and summary of material modifications, (iii) the two most recent annual
reports (Form 5500 series and all schedules and financial statements attached
thereto) required under ERISA or the Code, (iv) the most recently received
Internal Revenue Service determination letter for each Company Plan intended to
qualify under Section 401(a) of the Code, (v) the most recently prepared
actuarial report and financial statement in connection with each such Company
Plan, (vi) any material correspondence with the Internal Revenue Service or
the Department of Labor with respect to each such Company Plan and (vii) each
form of notice of grant and stock option agreement used to document Company
Options. Except for the Company Plans, neither the Company nor any Company
Subsidiary has an express or implied commitment, whether legally enforceable or
not, (x) to create, incur liability with respect to, or cause to exist, any
other employee benefit plan, program or arrangement that would constitute a
Company Plan, (y) to enter into any contract or agreement to provide
compensation for services to any individual, or (z) to modify, change the
terms of or terminate any Company Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
3. None of the Company Plans is a multi-employer plan
(within the meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multi-
employer Plan") or a single employer pension plan (within the meaning of
Section 4001(a)(15) of ERISA) for which the Company or any Company
Subsidiary could incur liability under Section 4063 or 4064 of ERISA (a
"Multiple Employer Plan").
4. Except as otherwise required by ERISA, the Code or other
applicable Federal, state, local or foreign law, none of the Company Plans
provides for the payment of separation, severance, termination or similar
benefits to any person, or obligates the Company or any Company Subsidiary to
pay separation, severance, termination or similar-type benefits solely or
partially as a result of any transaction contemplated by this Agreement or as a
result of a "change in ownership or control," within the meaning of such term
under Section 280G of the Code. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, either
alone or together with another event, will (i) result in any payment
(including, without limitation, severance, unemployment compensation, golden
parachute, forgiveness of indebtedness or otherwise) becoming due under any
Company Plan, whether or not such payment is contingent, (ii) increase any
benefits otherwise payable under any Company Plan or other arrangement,
(iii) result in the acceleration of the time of payment, vesting or

A-17


funding
of any benefits including, but not limited to, the acceleration of the vesting
and exercisability of any Company Option, whether or not contingent, or
(iv) affect in any material respects any Company Plan's current treatment
under any Laws including any Tax or social contribution Law. No Company Plan
provides, or reflects or represents any liability to provide, retiree health,
disability, or life insurance benefits to any person for any reason, except as
may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended ("COBRA"), or other applicable Federal, state, local or
foreign statute or other law, and the Company has never represented, promised or
contracted (whether in oral or written form) to any employee (either
individually or to employees as a group) or any other person that such employee
or other person would be provided with retiree health, disability, or life
insurance benefits, except to the extent required by applicable Federal, state,
local or foreign statute or other law.
5. Each Company Plan is now and always has been operated in
accordance in all material respects with its terms and the requirements of all
applicable Laws, regulations and rules promulgated thereunder including, without
limitation, ERISA, COBRA, the Family Medical Leave Act of 1993, as amended
("FMLA"), and the Code. Each of the Company and each Company Subsidiary
has substantially performed in all material respects all material obligations
required to be performed by it under, is not in any respect in default under or
in violation of, and has no knowledge of any default or violation by any party
to, any Company Plan. No action, claim or proceeding is pending or, to the
knowledge of the Company, threatened with respect to any Company Plan (other
than claims for benefits in the ordinary course) and, to the knowledge of the
Company, no fact or event exists which could give rise to any such action, claim
or proceeding. To the Company's knowledge, neither the Company nor any ERISA
Affiliate (as defined below) of the Company is subject to any penalty or Tax
with respect to any Company Plan under Section 502(i) of ERISA or Sections
4975 through 4980 of the Code. "ERISA Affiliate" means a person that is a
member of the same controlled group as another person or under common control
with such other person within the meaning of Section 414 of the Code. Each
Company Plan can be amended, terminated or otherwise discontinued at any time
without material liability to Parent, the Company or any of their ERISA
Affiliates (other than ordinary administration expenses). Neither the Company
nor any affiliate has, prior to the Effective Time and in any material respect,
violated any of the health care continuation requirements of COBRA, the
requirements of FMLA, the requirements of the Health Insurance Portability and
Accountability Act of 1996, the requirements of the Women's Health and Cancer
Rights Act of 1998, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, or any amendment to each such act, or any similar
provisions of state Law applicable to its employees.
6. Each Company Plan intended to qualify under Section
401(a) or Section 401(k) of the Code and each trust intended to qualify
under Section 501(a) of the Code (i) has received a favorable determination,
opinion, notification or advisory letter from the Internal Revenue Service with
respect to each such Company Plan as to its qualified status under the Code,
including all amendments to the Code effected by the Tax Reform Act of 1986 and
subsequent legislation, and no fact or event has occurred since the date of such
determination letter or letters from the Internal Revenue Service to adversely
affect the qualified status of any such Company Plan or the exempt status of any
such trust, or (ii) has remaining a period of time under applicable Treasury
regulations or Internal Revenue Service pronouncements in which to apply for
such a letter and make any amendments necessary to obtain a favorable
determination as to the qualified status of each such Company Plan.
7. Neither the Company nor any Company Subsidiary nor any
ERISA Affiliate has incurred any liability under, arising out of or by operation
of Title IV of ERISA (other than liability for premiums to the Pension Benefit
Guaranty Corporation arising in the ordinary course), including, without
limitation, any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA or
(ii) the withdrawal from any Multi-employer Plan or Multiple Employer Plan,
and no fact or event exists which could give rise to any such
liability.
8. Neither the Company nor any Company Subsidiary has, since
December 31, 1995 terminated, suspended, discontinued contributions to or
withdrawn from any employee pension benefit plan, as defined in
Section 3(2) of ERISA, including, without limitation, any Multi-employer
Plan. All contributions, premiums or payments required to be made or accrued
with respect to any Company Plan have been made on or before their due dates.
All such contributions have been fully deducted for income tax purposes and no
such deduction has been challenged or disallowed by any Governmental Entity and,
to the Company's knowledge, no fact or event exists which could give rise to any
such challenge or disallowance.
9. Except as set forth in Section 3.11(i) of the Company
Disclosure Schedule, (i) neither the Company nor any Company Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Company Subsidiary or in
the Company's or any Company Subsidiary's business, and, to the Company's
knowledge, currently there are no organizational campaigns, petitions or other
unionization activities seeking recognition of a collective bargaining unit that
could affect the Company or any Company Subsidiary; (ii) there are no
controversies, strikes, slowdowns or work stoppages pending or, to the Company's
knowledge, threatened between the Company or any Company Subsidiary and any of
its employees, and neither the Company nor any Company Subsidiary has
experienced any such controversy, strike, slowdown or work stoppage within the
past three years; (iii) neither the Company nor any Company Subsidiary has
breached or otherwise failed to comply with the provisions of any collective
bargaining or union contract to which the Company is a party and there are no
grievances outstanding against the Company or any Company Subsidiary under any
such agreement or contract that are now pending before any Person or
Governmental Entity or are known to the Company; (iv) there are no unfair labor
practice complaints pending against the Company or any Company Subsidiary before
the National Labor Relations Board or any other Governmental Entity or any
current union representation questions involving employees of the Company or any
Company Subsidiary, and, to the Company's knowledge, the Company and each
Company Subsidiary have not engaged in any unfair labor practice; (v) the
Company and each Company Subsidiary are currently in compliance with all
material provisions of applicable Laws relating to the employment of labor,
including those related to wages, hours, worker classification (including the
proper classification of independent contractors and consultants), collective
bargaining, workers' compensation and the payment and withholding of Taxes and
other sums as required by the appropriate Governmental Entity and has withheld
and paid to the appropriate Governmental Entity or is holding for payment not
yet due to such Governmental Entity all amounts required to be withheld from
employees of the Company or any Company Subsidiary and is not liable for any
arrears of wages, Taxes, penalties or other sums for failure to comply with any
of the foregoing; (vi) the Company and each Company Subsidiary has paid in full
to all employees or adequately accrued for in accordance with U.S. GAAP
consistently applied all wages, salaries, commissions, bonuses, benefits and
other compensation due to or on behalf of such employees; (vii) no claim that is
now pending before any Governmental Entity has been made against the Company or
any Company Subsidiary with respect to payment of wages, salary, overtime pay,
workers compensation benefits or disability benefits with respect to any person
currently or formerly employed by the Company or any Company Subsidiary, and, to
the Company's knowledge, no such claim has been threatened or asserted; (viii)
neither the Company nor any Company Subsidiary is a party to, or otherwise bound
by, any consent decree with, or citation by, any Governmental Entity relating to
employees or employment practices; (ix) the Company and each Company Subsidiary
are in compliance with all material provisions of applicable Laws and
regulations relating to occupational safety and health Laws and regulations, and
there is no charge or proceeding with respect to a violation of any occupational
safety or health standards that has been asserted or is now pending or
threatened with respect to the Company or any Company Subsidiary; (x) to the
Company's knowledge, the Company and each Company Subsidiary are in compliance
with all material Laws and regulations relating to discrimination in employment,
and there is no charge of discrimination in employment or employment practices
for any reason, including, without limitation, age, gender, race, religion or
other legally protected category, which has been asserted or, to the knowledge
of the Company, threatened against the Company or any Company Subsidiary or that
is now pending before the United States Equal Employment Opportunity Commission
or any other Governmental Entity; and (xi) to the Company's knowledge, each
employee of the Company and each Company Subsidiary who is located in the United
States and is not a United States citizen has all approvals, authorizations and
papers necessary to work in the United States in accordance with applicable
Law.
10. Section 3.11(j) of the Company Disclosure Schedule sets
forth the name and title of each employee of the Company with the title of Vice
President or higher.

SECTION 3.12 Contracts.

1. Other than as set forth (under the appropriate
subsection) in Section 3.12(a) of the Company Disclosure Schedule neither
the Company nor any Company Subsidiary is bound by any:
2. employment, consulting, termination or severance
agreement, contract or commitment with any officer, director or higher level
employee, or member of the Company's Board of Directors;
3. agreement, contract or commitment containing any covenant
limiting the right of the Company or any Company Subsidiary to engage in any
line of business, acquire any property, distribute any product or provide any
service (including geographic restrictions) or to compete with any person or
granting any exclusive distribution rights;
4. agreement, contract or commitment (i) relating to the
disposition or acquisition by the Company or any Company Subsidiary after the
date of this Agreement of assets not in the ordinary course of business, (ii)
relating to the acquisition by the Company of any Company Subsidiary of any
other entity, whether by means of merger, consolidation, purchase of assets or
otherwise, or (iii) pursuant to which the Company or any Company Subsidiary has
any ownership interest in any corporation, partnership, joint venture or other
business enterprise (other than the Company Subsidiaries) that is material to
the Company's business as currently conducted;
5. joint venture, stockholder, partnership or other
agreement relating to any equity ownership or profit interest;
6. contract relating to any outstanding commitment for
capital expenditures in excess of $50,000;
7. indenture, mortgage, promissory note, loan agreement,
credit agreement, security agreement, guarantee of borrowed money or other
agreement or instrument relating to the borrowing of money or extension of
credit in excess of $50,000;
8. contract providing for an "earn-out" or other contingent
payment by the Company or any Company Subsidiary involving more than $50,000
over the term of the contract;
9. contract or agreement which is terminable upon or
prohibits a change of ownership or control of the Company or any Company
Subsidiary;
10. contract providing for the indemnification of any
officer, director, employee or agent;
11. contract providing for any obligation of the Company or
any Company Subsidiary to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any Company Subsidiary or any
other person; or
12. any other agreement, contract, license or commitment that
is material to the business of the Company and the Company Subsidiaries, taken
as a whole, as currently conducted or proposed to be conducted.
13. Each agreement, contract or commitment required to be
disclosed in the Company Disclosure Schedule pursuant to clauses (i) through
(xi) above or set forth in Section 3.12(a) of the Company Disclosure Schedule
(any such agreement, contract or commitment, a "Company Material
Contract") (i) is valid and binding in all material respects on the
Company or a Company Subsidiary, as the case may be, and, to the knowledge of
the Company, on the other parties thereto, and is in full force and effect, and
(ii) upon consummation of the transactions contemplated by this Agreement,
shall continue in full force and effect without penalty or other adverse
consequence. Neither the Company nor any Company Subsidiary is in breach or
violation of, or default under, any material terms of any Company Material
Contract and, to the knowledge of the Company, no other party to any Company
Material Contract is in breach or violation thereof or default
thereunder.
14. The Company has delivered or made available to Parent
accurate and complete copies of all Company Material Contracts identified in
Section 3.12(a) of the Company Disclosure Schedule, including all
amendments thereto. Section 3.12(a) of the Company Disclosure Schedule
provides an accurate description of the terms of each Company Material Contract
that is not in written form.
15. To the Company's knowledge, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (i) result in a breach or
violation of, or default under, any material terms of any Company Material
Contract, (ii) give any entity the right to declare a default, seek damages
or exercise any other remedy under any Company Material Contract,
(iii) give any entity the right to accelerate the maturity or performance
of any Company Material Contract or (iv) give any entity the right to
cancel, terminate or modify any Company Material Contract.

SECTION 3.13 Environmental Matters.

1. The Company and each Company Subsidiary (i) is in
compliance in all material respects with all applicable Environmental Laws (as
defined below), (ii) holds all material Environmental Permits (as defined
below) necessary to conduct the Company's or each Company Subsidiary's business
and (iii) is in compliance with their respective Environmental
Permits.
2. Neither the Company nor any Company Subsidiary has
released and, to the knowledge of the Company, no other person has released
Hazardous Materials (as defined below) on any real property owned or leased by
the Company or any Company Subsidiary or, during their ownership or occupancy of
such property, on any property formerly owned or leased by the Company or any
Company Subsidiary.
3. Neither the Company nor any Company Subsidiary has
received any written request for information, or been notified that it is a
potentially responsible party, under CERCLA (as defined below) or any similar
Law of any state, locality or any other jurisdiction.
4. To the knowledge of the Company, neither the Company nor
any Company Subsidiary has entered into or agreed to any consent decree or order
or is subject to any judgment, decree or judicial order relating to compliance
with Environmental Laws, Environmental Permits or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous Materials
and, to the knowledge of the Company, no investigation, litigation or other
proceeding is pending or threatened in writing with respect thereto.
5. None of the real property currently or formerly owned or
leased by the Company or any Company Subsidiary is listed or, to the knowledge
of the Company, proposed to be listed on the "National Priorities List" under
CERCLA, as updated through the date of this Agreement, or any similar list of
sites in the United States or any other jurisdiction requiring investigation or
cleanup.

For purposes of this Agreement:

"CERCLA" means the U.S. Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended as of the date
hereof.

"Environmental Laws" means any Federal, state or local
statute, law, ordinance, regulation, rule, code or order of the United States,
or any other jurisdiction and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, relating to pollution or protection of the environment or
natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials, as in effect as of the date of this Agreement.

"Environmental Permits" means any permit, approval,
identification number, license and other authorization required under any
applicable Environmental Law.

"Hazardous Materials" means (i) any petroleum,
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.

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---

SECTION 3.14 Intellectual Property.

1. Except as set forth in Section 3.14(a) of the
Company Disclosure Schedule, each of the Company and the Company Subsidiaries
possesses sufficient and legally enforceable rights (by ownership or license or
otherwise) with respect to all Intellectual Property (as defined below)
necessary to conduct their respective businesses, as previously or presently
conducted, without infringement or misappropriation of any rights or property of
any person ("Infringement"), except for such items as have yet to be
conceived or developed. "Intellectual Property" means (i) trade
names, trade and service marks, logos, domains, URLs, websites, addresses and
other designations (collectively, "Marks"); (ii) inventions (whether or
not patentable); works of authorship; mask works; data; technology; know-how;
trade secrets; ideas; information; designs; formulas; algorithms; processes;
methods; schematics; computer software (in source code and/or object code form);
and all other intellectual property of any sort (collectively,
"Inventions") and (iii) patent rights; Mark rights; copyrights; mask work
rights; sui generis database rights; trade secret rights; moral rights;
and all other intellectual and industrial property rights of any sort throughout
the world, and all applications, registrations, issuances and the like with
respect thereto (collectively, "IP Rights"). "Company
Intellectual Property" means all Intellectual Property owned by or
exclusively licensed to the Company or any Company Subsidiary. With respect to
patent rights, moral rights and Mark rights, the representations and warranties
of this Section 3.14(a) are made only to the Company's and the Company
Subsidiaries' knowledge and without having conducted any special investigation
or patent or trademark search.
2. To the extent included in Company Intellectual Property,
Section 3.14(b)(i) of the Company Disclosure Schedule lists (by title, number,
jurisdiction and owner) all patents and patent applications; all registered and
unregistered Marks and Marks for which registration applications are pending;
and all registered and material unregistered copyrights and mask works; and all
other issuances, registrations, applications and the like with respect to those
or any other IP Rights (collectively, "Company Scheduled IP"). Except as
set forth in Section 3.14(b)(ii) of the Company Disclosure Schedule, all
items of Company Scheduled IP (other than pending applications) are valid,
enforceable and subsisting to the extent such concepts are applicable, and
Company is not aware of any questions or challenges with respect thereto. All
filings, registrations and related correspondence in respect of Company
Scheduled IP have been provided to Parent. No cancellation, termination,
expiration or abandonment of any item of Company Scheduled IP (except natural
expiration or termination at the end of the full possible term, including
extensions and renewals) is anticipated by the Company or any Company
Subsidiary. Except as referenced in written documentation previously provided to
Parent (including without limitation file wrappers), neither the Company nor any
Company Subsidiary is aware of any questions or challenges with respect to the
patentability of any claims in any pending patent application included in
Company Intellectual Property.
3. Section 3.14(c)(i) of the Company Disclosure Schedule
lists: (i) all licenses, sublicenses and other agreements (written or otherwise)
to which the Company or a Company Subsidiary is a party (or by which it or any
Company Intellectual Property is bound or subject) and pursuant to which any
person has been or may be assigned, authorized to use, exercise or exploit
("Use"), granted any license, lien or encumbrance regarding, or given
access to any Company Intellectual Property other than pursuant to (A) written,
signed, standard form software licenses and support or maintenance agreements,
and (B) nondisclosure or confidentiality agreements, and (C) agreements no
longer in effect; and (ii) all licenses, sublicenses and other agreements
(written or otherwise) pursuant to which the Company or a Company Subsidiary has
been or may be assigned, granted any license, authorized to Use or incurred any
obligation in connection with (A) any third party Intellectual Property that has
been or is incorporated or embodied in, or forms all or any part of any
previous, current or proposed product, service or Intellectual Property offering
of the Company or any Company Subsidiary or (B) any Company Intellectual
Property (other than agreements executed by employees and contractors pursuant
to the Company's or a Company Subsidiary's standard form of agreement),
(iii) each agreement pursuant to which the Company or a Company Subsidiary
has deposited or is required to deposit with an escrow agent or any other person
all or part of the source code for any product or service previously or
currently offered or under development by the Company or any Company Subsidiary
(the "Company Source Code") (other than such agreements which are no
longer in effect, if all Company Source Code deposited with the escrow agent has
been returned to the Company or a Company Subsidiary) and (iv) all consulting or
other agreements (written or otherwise) pursuant to which the Company or a
Company Subsidiary either (A) provides services to any person or (B) receives
services from any person, other than such agreements pursuant to which the
Company or the Company Subsidiary explicitly, in writing retains or is assigned
ownership of any Intellectual Property created pursuant to such arrangement.
Except as disclosed on Section 3.14(c)(ii) of the Company Disclosure Schedule,
neither the Company nor any of the Company Subsidiaries

A-22


has entered into any
agreement to indemnify, hold harmless or defend any other person with respect to
any assertion of Infringement or warranting the lack thereof, other than
indemnification provisions contained in standard forms of product licenses,
distribution agreements, reseller agreements, end user licenses, or other
transactions. Any standard form of employee agreement, consulting agreement,
product license, distribution agreement, reseller agreement, end user license,
or other standard form of agreement has been clearly identified as such and
provided to Parent.
4. To the knowledge of the Company and the Company
Subsidiaries, no event or circumstance has occurred or exists that (with or
without notice, consent or the lapse of time) could reasonably be expected to
result in, and neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement will result in,
(i) the breach or violation of any license, sublicense or other agreement
required to be listed in Section 3.14(c)(i) of the Company Disclosure Schedule,
(ii) the loss or expiration of any material right or option by the Company or
any of the Company Subsidiaries (or the gain thereof by any third party) under
any such license, sublicense or other agreement, or (iii) the release,
disclosure or delivery to any third party of any Company Source Code. Further,
each license, sublicense and agreement required to be listed on Section
3.14(c)(i) of the Company Disclosure Schedule shall be considered, for purposes
of this Agreement, to be a "Company Material Contract" (as such term is
defined and used elsewhere in this Agreement).
5. Except as set forth in Section 3.14(e) of the Company
Disclosure Schedule, there is, to the knowledge of the Company and the Company
Subsidiaries as of the date of this Agreement, no unauthorized Use or
disclosure, and no Infringement, of any Company Intellectual Property by any
third party, including, without limitation, any employee or former employee of
the Company or any of the Company Subsidiaries. Except as set forth in Section
3.14(e) of the Company Disclosure Schedule, neither the Company nor any Company
Subsidiary has brought or threatened, at any time, any action, suit or
proceeding against any third party for any Infringement of any Company
Intellectual Property or any material breach of any license, sublicense or
agreement involving Company Intellectual Property.
6. Except as set forth in Section 3.14(f) of the Company
Disclosure Schedule, the Company and the Company Subsidiaries have taken
reasonable steps to protect and preserve the confidentiality of each item of
Company Intellectual Property with respect to which the Company or any Company
Subsidiary wishes to maintain confidentiality and which is not otherwise
disclosed in published patents or patent applications or registered copyrights
("Company Confidential Information"). Except as set forth in Section
3.14(f) of the Company Disclosure Schedule, all use by and disclosure to
employees or others of Company Confidential Information has been pursuant to the
terms of valid and binding written confidentiality and nonuse/restricted-use
agreements or agreements that contain similar obligations. Except as set forth
in Section 3.14(f) of the Company Disclosure Schedule, none of the Company or
any of the Company Subsidiaries has disclosed or delivered to any third party,
or permitted the disclosure or delivery to any escrow agent or other third
party, any Company Source Code.
7. Except as set forth in Section 3.14(g) of the Company
Disclosure Schedule, the Company and the Company Subsidiaries collectively own,
exclusively, all Intellectual Property that is incorporated or embodied in, or
that forms part of, any product or service previously offered or currently being
offered or developed by the Company or any Company Subsidiary. Without limiting
the generality of the foregoing, (i) no current or former employee or contractor
of the Company or any Company Subsidiary has any right or interest to or in any
such Intellectual Property, and (ii) neither the Company nor any Company
Subsidiary currently has any ongoing or future obligation to pay any license
fee, royalty, or other payment to any person with respect to the manufacturing,
distribution, modification, marketing, sale or license of any product or service
previously offered or currently being offered or developed by the Company or any
Company Subsidiary. Except as set forth in Section 3.14(g) of the Company
Disclosure Schedule, each current and former employee and contractor of the
Company or any Company Subsidiary has executed and delivered (and to the
Company's knowledge is in compliance with) an agreement in substantially the
form of the Company's standard Proprietary Information and Inventions Agreement
(in the case of current or former employees) or Consulting Agreement (in the
case of a contractor), which agreements provide valid written assignments to the
Company or such Company Subsidiary of all title and rights to Intellectual
Property that is incorporated or embodied in, or that forms part of, any product
or service previously offered or currently being offered or developed by the
Company or any Company Subsidiary, except for those current or former employees
and contractors whose failure to execute and deliver such an agreement has not
and would not have a Company Material Adverse Effect.
8. Except as set forth in Section 3.14(h) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has received
any communication alleging or suggesting that the Company or any Company
Subsidiary has been or may be (whether in its past, current or proposed business
or otherwise) engaged in, liable for or contributing to any Infringement, nor
does the Company or any Company Subsidiary have any reason to expect that any
such communication will be forthcoming. To the knowledge of the Company and the
Company Subsidiaries, neither the Company nor any Company Subsidiary has ever,
at any time, infringed, misappropriated, or otherwise violated any IP Right of
any other person, nor is there any basis for a claim that the Company or any
Company Subsidiary has infringed, misappropriated or otherwise violated any IP
Right of any other person.
9. Except as set forth in Section 3.14(i) of the Company
Disclosure Schedule, none of the Company or the Company Subsidiaries is aware
that any of its employees or contractors is obligated under any agreement,
commitment, judgment, decree, order or otherwise that would conflict with the
business of the Company or any Company Subsidiary or interfere with the use of
his or her best efforts to perform his or her duties for the Company and the
Company Subsidiaries.
10. All Company Software is free of all viruses, worms,
trojan horses and other material known infections or intentionally harmful
routines and does not contain any bugs, errors, or problems of a material nature
that, to the Company's or any Company Subsidiary's knowledge, could reasonably
be expected to disrupt its operation or have an adverse impact on the operation
of other software programs or operating systems.
11. The Company and the Company Subsidiaries have obtained
all approvals from governmental entities and other regulatory bodies necessary
for exporting outside of the United States (by the Company, any Company
Subsidiary or any of their distributors, resellers or customers) any software
products previously offered or currently being offered by the Company or any
Company Subsidiary and importing any such products into any country in which
they are or have been distributed, sold or licensed for Use, and all such export
and import approvals in the United States and throughout the world are valid,
current, and in full force and effect.

SECTION 3.15 Taxes.

1. All Tax (as defined below) returns, statements, reports,
declarations and other forms and documents (including without limitation
estimated Tax returns and reports and material information returns and reports)
required to be filed with any Tax Authority (as defined below) with respect to
any Taxable (as defined below) period ending on or before the Closing, by or on
behalf of the Company or any Company Subsidiary (collectively, "Company Tax
Returns" and individually, a "Company Tax Return"), have been or will
be completed and filed when due (including any extensions of such due date) and
all amounts shown due on such Company Tax Returns on or before the Effective
Time have been or will be paid on or before such date. The Interim Financial
Statements (i) fully accrue all actual and contingent liabilities for Taxes
(as defined below) with respect to all periods through September 30, 2001
and the Company has not and will not incur any Tax liability in excess of the
amount reflected (excluding any amount thereof that reflects timing differences
between the recognition of income for purposes of U.S. GAAP and for Tax
purposes) on the Company Balance Sheet included in the Interim Financial
Statements with respect to such periods, and (ii) properly accrue in
accordance with U.S. GAAP all material liabilities for Taxes payable after
September 30, 2001, with respect to all transactions and events occurring
on or prior to such date. All information set forth in the notes to the Interim
Financial Statements relating to Tax matters is true, complete and accurate in
all material respects. The Company has not incurred any material Tax liability
since September 30, 2001 other than in the ordinary course of business and
the Company has made adequate

A-24


provisions for all Taxes since that date in
accordance with U.S. GAAP on at least a quarterly basis. The adjusted basis of
the Company's assets exceed the sum of its liabilities.
2. The Company has withheld and paid to the applicable
financial institution or Tax Authority all amounts required to be withheld. To
the best knowledge of the Company, no Company Tax Returns filed with respect to
Taxable years through the Taxable year ended December 31, 2001 in the case of
the United States, have been examined and closed. The Company (or any member of
any affiliated or combined group of which the Company has been a member) has not
granted any extension or waiver of the limitation period applicable to any
Company Tax Returns that is still in effect and there is no material claim,
audit, action, suit, proceeding, or (to the knowledge of the Company)
investigation now pending or threatened against or with respect to the Company
in respect of any Tax or assessment. No notice of deficiency or similar document
of any Tax Authority has been received by the Company, and there are no
liabilities for Taxes (including liabilities for interest, additions to Tax and
penalties thereon and related expenses) with respect to the issues that have
been raised (and are currently pending) by any Tax Authority that could, if
determined adversely to the Company, materially and adversely affect the
liability of the Company for Taxes. There are no liens for Taxes (other than for
current Taxes not yet due and payable) upon the assets of the Company. The
Company has never been a member of an affiliated group of corporations, within
the meaning of Section 1504 of the Code. The Company is not a party to any
Tax exemption or other Tax-sharing agreement or subject to an order of a foreign
government, and the consummation of the Merger will not have any adverse effect
on the continued validity and effectiveness of any such Tax exemption or other
Tax-sharing agreement or order. Neither the Company nor any person on behalf of
the Company has entered into or will enter into any agreement or consent
pursuant to the collapsible corporation provisions of
Section 341(f) of the Code (or any corresponding provision of state,
local or foreign income tax Law) or agreed to have Section 341(f)(2) of the
Code (or any corresponding provision of state, local or foreign income tax Law)
apply to any disposition of any asset owned by the Company. None of the assets
of the Company is property that the Company is required to treat as being owned
by any other person pursuant to the so-called "safe harbor lease" provisions of
former Section 168(f)(8) of the Code. None of the assets of the Company
directly or indirectly secures any debt the interest on which is tax exempt
under Section 103(a) of the Code. None of the assets of the Company is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
The Company has not made and will not make a deemed dividend election under
Treas. Reg.  1.1502-32(f)(2) or a consent dividend election under
Section 565 of the Code. The Company has never been a party (either as a
distributing corporation, a distributed corporation or otherwise) to any
transaction intended to qualify under Section 355 of the Code or any
corresponding provision of state Law. The Company has not participated in (and
will not participate in) an international boycott within the meaning of
Section 999 of the Code. The Company does not have and has not had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States of America and such foreign
country and the Company has not engaged in a trade or business within any
foreign country. The Company has never elected to be treated as an S-corporation
under Section 1362 of the Code or any corresponding provision of Federal or
state Law. All material elections with respect to the Company's Taxes made
during the fiscal years ending December 31, 1998, 1999 and 2000 are
reflected on the Company Tax Returns for such periods, copies of which have been
provided to Parent. After the date of this Agreement, no material election with
respect to Taxes will be made without the prior written consent of Parent, which
consent will not be unreasonably withheld or delayed. The Company is not party
to any joint venture, partnership, or other arrangement or contract which could
be treated as a partnership for Federal income tax purposes. The Company is not
currently and never has been subject to the reporting requirements of
Section 6038A of the Code. There is no agreement, contract or arrangement
to which the Company is a party that could, individually or collectively, result
in the payment of any amount that would not be deductible by reason of
Sections 280G (as determined without regard to Section 280G(b)(4)),
162 (other than 162(a)) or 404 of the Code. The Company is not a party to any
Contract, nor does it have any obligations (current or contingent) to compensate
any person for excise taxes paid pursuant to Section 4999 of the Code. The
Company is not a party to or bound by any Tax indemnity, Tax sharing or Tax
allocation agreement (whether written or unwritten or arising under operation of
Federal Law as a result of being a member of a group filing consolidated Company
Tax Returns, under operation of certain state Laws as a result of being a member
of a unitary group, or under comparable Laws of other states or foreign
jurisdictions) that includes a party other than the Company nor does the Company
owe any amount under any such agreement. The Company has previously provided or
made available to Parent true and correct copies of all income, franchise, and
Company Tax Returns regarding sales tax, and, as reasonably requested by Parent,
prior to or following the date hereof, presently existing information statements
and reports. The Company is not, and has not been, a United States real property
holding corporation (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in

A-25


Section 897(c)(1)(A)(ii) of the Code.
Other than by reason of the Merger, the Company has not been and will not be
required to include any material adjustment in Taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax Laws as a result of
transactions, events or accounting methods employed prior to the
Merger.
3. For purposes of this Agreement, the following terms have
the following meanings: "Tax" (and, with correlative meaning,
"Taxes" and "Taxable") means any and all taxes including, without
limitation, (i) any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
value added, net worth, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any Governmental Entity
responsible for the imposition of any such tax (domestic or foreign) (a "Tax
Authority"), (ii) any liability for the payment of any amounts of the
type described in (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any taxable period or as the result
of being a transferee or successor thereof and (iii) any liability for the
payment of any amounts of the type described in (i) or (ii) as a
result of any express or implied obligation to indemnify any other person. As
used in this Section 3.15, the term "Company" means the Company and any
entity included in, or required under U.S. GAAP to be included in, any of the
Audited Financial Statements or the Interim Financial Statements.

SECTION 3.16 Vote
Required. The only votes of the holders of any classes or series of
capital stock of the Company necessary to approve (i) the amendment and
restatement of the Articles of Incorporation of the Company in the form attached
hereto as Exhibit D (the "Company Charter Amendment") and (ii)
this Agreement and the Merger are (A) the affirmative vote of the holders of at
least a majority of the outstanding shares of Company Common Stock voting
separately as a single class in favor of the approval of the Company Charter
Amendment, the principal terms of this Agreement and the Merger and (B) the
affirmative vote of the holders of at least a majority of the outstanding shares
of each series of Company Preferred Stock, each voting separately as a single
class in favor of the approval of the Company Charter Amendment, the principal
terms of this Agreement and the Merger (the "Company Shareholder
Approval"). The Company Shareholder Approval is the only vote of holders of
any class or series of the capital stock of the Company necessary for the
Company to effect the Merger.

SECTION 3.17 Assets; Absence of Liens and Encumbrances.

1. Neither the Company nor any of the Company Subsidiaries
owns any real property. Section 3.17(a) of the Company Disclosure Schedule lists
all real property leases to which the Company or any Company Subsidiary is a
party and each amendment thereto (all such leases, as amended, being the
"Company Leases"), and with respect to each such lease, the aggregate
monthly rent payable thereunder and the expiration date thereof. All such
current leases are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event of default (or event which with notice or
lapse of time, or both, would constitute a default) that would give rise to a
material claim. Neither the Company nor any of the Company Subsidiaries have
subleased or otherwise granted rights of use or occupancy of any of the premises
subject to such leases to any other persons. Other than leaseholds created under
the real property leases identified in Section 3.17(a) of the Company
Disclosure Schedule, the Company and the Company Subsidiaries have no leasehold
interest in any real property.
2. The Company and each Company Subsidiary own, lease or
have the legal right to use all of the material assets, including, without
limitation, personal property (other than Intellectual Property, which is
covered by Section 3.14 hereof), used or intended to be used in the conduct
of the business of the Company or such Company Subsidiary or otherwise owned,
leased or used by the Company or such Company Subsidiary and, with respect to
contract rights, is a party to and enjoys the right to the benefits of all
material contracts, agreements and other arrangements used or intended to be
used by the Company or such Company Subsidiary in or relating to the conduct of
the business of the Company and each Company Subsidiary (all such properties,
assets and contract rights, together with the Company Leases, being the
"Company Assets").
3. The Company and each Company Subsidiary have good and
marketable title to, or, in the case of leased or subleased Company Assets,
valid and subsisting leasehold interests in, all the Company Assets, free and
clear of all mortgages, liens, pledges, charges, claims, security interests or
encumbrances of any kind or

A-26


character ("Liens") except for (x) Liens
for current Taxes not yet due and payable, and (y) Liens that have arisen
in the ordinary course of business and that do not (in any case or in the
aggregate) materially detract from the value, or materially interfere with the
present or contemplated use, of the Company Assets subject thereto or affected
thereby. The equipment of the Company and the Company Subsidiaries used in the
operations of their business is, taken as a whole, in good operating condition
and repair, ordinary wear and tear excepted.

SECTION 3.18 Certain Interests. No event has occurred that would
be required to be reported currently by the Company as a Certain Relationship or
Related Transaction pursuant to Item 404 of Regulation S-K promulgated
under the Securities Act assuming the Company were subject to such provisions of
the Securities Act.

SECTION 3.19 Insurance Policies. True and complete
copies of all insurance policies to which the Company or any Company Subsidiary
is a party or is a beneficiary or named insured such policies have been provided
or made available to Parent. Except as set forth in Section 3.19 of the Company
Disclosure Schedule, there have been no material claim or series of claims made
under such insurance policies within the past three years. All premiums due on
such policies have been paid, and, to the Company's knowledge, the Company and
each Company Subsidiary is otherwise in compliance with the terms of such
policies. Neither the Company nor any Company Subsidiary has failed to give any
notice or present any material claim under any such policy in a timely fashion,
except where such failure would not prejudice the Company's or any Company
Subsidiary's ability to make such a claim. Such insurance to the date hereof has
been maintained in full force and effect and not been canceled or changed,
except to extend the maturity dates thereof. Neither the Company nor any Company
Subsidiary has any knowledge of any actual or possible (i) cancellation or
threatened termination of any insurance policy, (ii) refusal of any
coverage or rejection of any claim under any insurance policy or
(iii) material premium increase with respect to any insurance
policy.

SECTION 3.20 Brokers. Except for C.E. Unterberg, Towbin
("Company Advisor") no broker, finder or investment banker (other than
the Company Financial Advisor (as defined in Section 3.27)) is entitled to any
brokerage, finder's or other fee or commission in connection with the
origination, negotiation or execution of this Agreement, the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any Company Subsidiary. The Company has heretofore
furnished to Parent a complete and correct copy of all agreements between the
Company and Company Advisor pursuant to which such advisor would be entitled to
any payment in relation to the Merger or the transactions contemplated by this
Agreement.

SECTION 3.21 State Takeover
Statutes. The Board of Directors of the Company has taken all action
necessary to ensure that any restrictions on business combinations contained in
the CGCL will not apply to the Merger and the other transactions contemplated by
this Agreement. No other "fair price," "moratorium," "control share acquisition"
or other similar anti-takeover statute or regulation or any anti-takeover
provision in the Company's Articles of Incorporation or Bylaws is, or at the
Effective Time will be, applicable to the Company, the shares of Company Stock,
the Merger or the other transactions contemplated by this Agreement.

SECTION 3.22 Customers and
Suppliers. No customer who individually accounted for more than 10% of
the Company's consolidated gross revenues during the fiscal years ended
December 31, 1999 and 2000 and the most recent fiscal quarter ended
September 30, 2001 has, within the past 12 months, cancelled or otherwise
terminated, or made any threat to cancel or terminate, its relationship with the
Company or any Company Subsidiary, or decreased materially its usage of the
Company's or any Company Subsidiary's services or products.

SECTION 3.23 Powers of Attorney. Except for powers of attorney
regarding immaterial matters, there are no outstanding powers of attorney
executed on behalf of the Company or any Company Subsidiary.

SECTION 3.24 Offers. The Company has suspended or terminated,
and has the legal right to terminate or suspend, all negotiations and
discussions of any acquisition, merger, consolidation or sale of all
substantially all of the assets of Company and the Company Subsidiaries with
parties other than Parent.

SECTION 3.25 Books and Records. The minute books and other
similar records of the Company and each Company Subsidiary contain complete and
accurate records of all actions taken at any meetings of the Company's or each
Company Subsidiary's stockholders, Board of Directors or any committee thereof
and of

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SECTION 3.26 Affiliates. Section 3.26 of
the Company Disclosure Schedule contains an accurate and complete list of the
names and addresses of those persons who are Affiliates
of the Company as of the date hereof.

SECTION 3.27 Opinion of Financial Advisor. The Company has received the written opinion of
Houlihan, Lokey, Howard & Zukin (the "Company Financial Advisor")
that the conversion ratio set forth in the Note Conversion Agreement is fair
from a financial point of view to the shareholders of the Company who are not
also holders of any Notes, a copy of which opinion will be delivered to Parent
promptly after the date of this Agreement.

ARTICLE IVREPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub hereby represent and warrant to the
Company that the statements contained in this Article IV are true and correct
except as set forth in (i) the disclosure schedule delivered by Parent to the
Company concurrently with the execution of this Agreement (the "Parent
Disclosure Schedule") and (ii) the Parent SEC Reports (as defined in
Section 4.08(a)) filed prior to the date of this Agreement. The Parent
Disclosure Schedule shall be arranged according to specific sections in this
Article IV and shall provide exceptions to, or otherwise qualify in reasonable
detail, only the corresponding section in this Article IV and any other section
hereof where it is clear, upon a reading of such disclosure without any
independent knowledge on the part of the reader regarding the matter disclosed,
that the disclosure is intended to apply to such other section.

SECTION 4.01 Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own, lease and otherwise hold and operate its properties and other assets and to
carry on its business as it is now being conducted and as currently proposed to
be conducted, except where the failure to be so organized, existing or in good
standing or to have such corporate power and authority has not had, and could
not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect (as defined below). The Company is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed and
in good standing has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. The term
"Parent Material Adverse Effect" means any event, change, violation,
inaccuracy, circumstance or effect that is, or could reasonably be expected to
be, individually or in the aggregate, materially adverse to (i) the business,
operations, condition (financial or otherwise), assets (tangible or intangible),
liabilities, properties, or results of operations of Parent and the Parent
Subsidiaries taken as a whole, or (ii) the ability of Parent to consummate the
Merger or any of the transactions contemplated by this Agreement or to perform
its obligations under this Agreement, in each case prior to the Termination
Date; provided, however, that (i) none of the following shall be deemed in
themselves, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been, or
will be, a Parent Material Adverse Effect: (a) any changes in general economic
or business conditions that do not disproportionately impact Parent and the
Parent Subsidiaries, taken as a whole, (b) any changes or events affecting the
industry in which Parent operates that do not disproportionately impact Parent
and the Parent Subsidiaries, taken as a whole, (it being understood that in any
controversy concerning the applicability of the preceding exceptions (a) and
(b), Parent shall have the burden of proof with respect to the elements of such
exceptions), (c) any adverse event, change, violation, inaccuracy, circumstance
or effect, including the payment of fees and expenses, resulting from the terms
of, or the taking of any action required by, this Agreement, or (d) any adverse
event, change, violation, inaccuracy, circumstance or effect related to or
resulting from the announcement the Merger, and (ii) any change in the
market price of the Parent Common Stock in and of itself shall not be deemed to
constitute a Parent Material Adverse Effect; provided, however,
that in the event any change in the market price of Parent Common Stock is
related to one or more events,

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facts or circumstances affecting Parent and the
Parent Subsidiaries, taken as a whole, such change in the market price of Parent
Common Stock and such events, facts or circumstances shall be considered
collectively in determining whether there has been a Parent Material Adverse
Effect.

SECTION 4.2 Certificate of Incorporation and Bylaws. Parent
has heretofore made available to the Company a complete and correct copy of
(a) the Certificate of Incorporation and the Bylaws of Parent including all
amendments thereto, (b) the minute books containing all consents, actions
and meeting of the stockholders of Parent and Parent's Board of Directors and
any committees thereof, and (c) the stock transfer books of Parent setting
forth all issuances or transfers of any capital stock of Parent. Such
Certificate of Incorporation and Bylaws are in full force and effect. Parent is
not in violation of any of the provisions of its Certificate of Incorporation or
Bylaws. The corporate minute books, stock certificate books, stock registers and
other corporate records of Parent are complete and accurate, and the signatures
appearing on all documents contained therein are the true or facsimile
signatures of the persons purported to have signed the same.

SECTION 4.03 Subsidiaries.

1. Section 4.03(a) of the Parent Disclosure Schedule
sets forth: (i) the name of each corporation, partnership, limited
liability company, joint venture or other entity in which Parent has, directly
or indirectly, an equity interest representing 50% or more of the capital stock
thereof or other equity interests therein (individually, a "Parent
Subsidiary" and, collectively, the "Parent Subsidiaries"); and
(ii) the number and type of outstanding equity securities of each Parent
Subsidiary and a list of the holders thereof.
2. Each Parent Subsidiary is a corporation duly organized,
validly existing and in corporate and tax good standing under the laws of the
jurisdiction of its incorporation. Each Parent Subsidiary is duly qualified to
conduct business and is in good standing under the laws of each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
requires such qualification, except where the failure to be so qualified or in
good standing has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Each Parent
Subsidiary has all requisite power and authority to carry on the businesses in
which it is engaged and to own and use the properties owned and used by it.
Parent has delivered or made available to the Company complete and accurate
copies of the charter, Bylaws or other organizational documents of each Parent
Subsidiary. No Parent Subsidiary is in default under or in violation of any
provision of its charter, Bylaws or other organizational documents. All of the
issued and outstanding shares of capital stock of each Parent Subsidiary are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. All shares of each Parent Subsidiary are held of record or
owned beneficially by either Parent or another Parent Subsidiary and are held or
owned free and clear of any restriction on transfer (other than restrictions
under Federal or state securities laws), claim, security interest, option,
warrant, right, contract, call, commitment, equity or demand. There are no
outstanding or authorized options, warrants, rights, agreements or commitments
to which Parent or any Parent Subsidiary is a party or which are binding on any
of them providing for the issuance, disposition or acquisition of any capital
stock of any Parent Subsidiary. There are no outstanding stock appreciation,
phantom stock or similar rights with respect to any Parent Subsidiary. There are
no voting trusts, proxies or other agreements or understandings with respect to
the voting of any capital stock of any Parent Subsidiary.
3. Parent does not control, directly or indirectly, or have
any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business association which is not a Parent Subsidiary. There are no
contractual obligations of Parent to provide funds to, or make any investment in
(whether in the form of a loan, capital contribution or otherwise), any other
person.

SECTION 4.04 Capitalization.

1. The authorized capital stock of Parent consists of
 25,000,000 shares of Parent Common Stock,  2,000,000 shares of Parent
Preferred Stock. As of the date hereof, (i) 4,374,874 shares of Parent
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable, (ii) no shares of Parent
Common Stock are held in the treasury of Parent and (iii) 2,925,645 shares
of Parent Common Stock are reserved for future issuance pursuant to outstanding
Parent Options. As of the date of this Agreement, no shares of Parent Preferred
Stock are issued and outstanding.
2. Parent has reserved (i) 3,408,749 shares of Parent Common
Stock for issuance under Parent's 1993 Stock Option/Stock Issuance Plan and
Parent's 1999 Stock Plan (the "Parent Stock Plans") of which options to
purchase 2,925,645 shares of Parent Common Stock are outstanding as of the date
of this Agreement and (ii) 92,315 shares of Parent Common Stock for issuance
pursuant to Parent's 1998 Employee Stock Purchase Plan (the "Parent Purchase
Plan"), of which 92,315 shares are available for issuance.
Section 4.04(b) of the Parent Disclosure Schedule accurately sets forth
with respect to each Parent Option that is outstanding as of the date of this
Agreement: (i) the name of the holder of such Parent Option; (ii) the
total number of shares of Parent Common Stock that was originally subject to
such Parent Option; (iii) the number of shares of Parent Common Stock that
remain subject to such Parent Option, (iv) the date on which such Parent Option
was granted and the term of such Parent Option; (v) the vesting schedule
and vesting commencement date for such Parent Option; (vi) the exercise
price per share of Parent Common Stock purchasable under such Parent Option;
(vii) whether such Parent Option has been designated an "incentive stock
option" as defined in Section 422 of the Code; and (viii) the current
employee or independent contractor status of the holder of such Parent Option.
No Parent Option will by its terms require an adjustment in connection with the
Merger, except as contemplated by this Agreement. Neither the consummation of
transactions contemplated by this Agreement, nor any action taken or to be taken
by Parent in connection with such transactions, will result in (i) any
acceleration of exercisability or vesting, whether or not contingent on the
occurrence of any event after consummation of the Merger, in favor of any
optionee under any Parent Option; (ii) any additional benefits for any
optionee under any Parent Option; or (iii) the inability of Parent after
the Effective Time to exercise any right or benefit held by Parent prior to the
Effective Time with respect to any Parent Option assumed by Parent or any shares
of Parent Common Stock previously issued upon exercise of a Parent Option,
including, without limitation, the right to repurchase an optionee's unvested
shares on termination of such optionee's employment.
3. Except as described in Section 4.04(b) above, there are
no options, warrants or other rights, agreements, arrangements or commitments of
any character, whether or not contingent, relating to the issued or unissued
capital stock of Parent or obligating Parent to issue or sell any share of
capital stock of, or other equity interest in, Parent. All shares of Parent
Common Stock so subject to issuance, upon issuance in accordance with the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable.
4. Parent does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote (or which
are convertible into or exercisable for securities having the right to vote)
with the stockholders of Parent on any matter.
5. All of the securities offered, sold or issued by Parent
(i) have been offered, sold or issued in compliance with the requirements
of the Federal securities laws and any applicable state securities or "blue sky"
laws and (ii) are not subject to any preemptive right, right of first refusal,
right of first offer or right of recission.
6. There are no outstanding contractual obligations of
Parent to repurchase, redeem or otherwise acquire any share of capital stock of,
or other equity interest in, Parent. There are no stockholder agreements, voting
trusts or other agreements or understandings to which Parent is a party, or of
which Parent is aware, that (i) relate to the voting, registration or
disposition of any securities of Parent, (ii) grant to any person or group of
persons the right to elect, or designate or nominate for election, a director to
the Board of Directors of Parent, or (iii) grant to any person or group of
persons information rights.

SECTION 4.05 Authority Relative to This Agreement.

1. Each of Parent and Merger Sub has all necessary corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and, subject to obtaining the necessary approval of the
Parent stockholders, to consummate the Merger. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the Merger and the other transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Parent or Merger Sub
are necessary to authorize this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement (other than the approval of
the Share Issuance by the Parent stockholders as described in Section 4.17
hereof and the filing and recordation of appropriate merger documents as
required by the CGCL). This Agreement has been duly and validly executed and

A-30


delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub
in accordance with its terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors' rights generally and subject, as to enforceability, to the effect of
general principles of equity.
2. Without limiting the generality of the foregoing,
(i) the Board of Directors of Parent, at a meeting duly called and held,
has unanimously (A) determined that the Merger and the other transactions
contemplated hereby are fair to, and in the best interests of, Parent and its
stockholders, (B) approved and adopted this Agreement and approved the
Merger and the other transactions contemplated hereby in accordance with the
provisions of the Delaware General Corporation Law (the "DGCL") and
Parent's charter documents, and (C) directed that the Share Issuance be
submitted to the Parent stockholders for their approval and (D) resolved to
recommend that the Parent stockholders vote in favor of the approval of the
Share Issuance, (ii) the Board of Directors of Merger Sub, in an action by
written consent thereof, has unanimously (A) determined that the Merger and
the other transactions contemplated hereby are fair to, and in the best
interests of, Merger Sub and Parent, its sole stockholder, (B) approved
this Agreement (including the principal terms hereof), the Merger and the other
transactions contemplated hereby in accordance with the provisions of the CGCL
and Parent's charter documents, and (C) directed that this Agreement and
the Merger be submitted to Merger Sub's sole stockholder for its approval and
(D) resolved to recommend that the sole stockholder vote in favor of the
approval of this Agreement (including the principal terms hereof) and the
Merger, and (iii) Parent, as sole stockholder of Merger Sub, has approved and
adopted this Agreement (including the principal terms thereof) and approved the
Merger.

SECTION 4.06 No Conflict; Required Filings and
Consents.

1. The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance of this Agreement by Parent and
Merger Sub will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Parent or any Parent Subsidiary, (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 4.06(b) have been obtained and all filings and obligations
described in Section 4.06(b) have been made or complied with, conflict with
or violate in any material respect any Law applicable to Parent or any Parent
Subsidiary or by which any property or asset of Parent or any Parent Subsidiary
is bound or affected, or (iii) conflict with, result in any material breach
of or constitute a material default (or an event which with notice or lapse of
time or both would become a default) under, require consent, approval or notice
under, give to others any right of termination, amendment, acceleration or
cancellation of, require any payment under, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or any Parent Subsidiary
pursuant to, any material note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Parent or any Parent Subsidiary is a party or by which any property or asset of
Parent or any Parent Subsidiary is bound or affected.
2. The execution and delivery of this Agreement by Parent
and Merger Sub do not, and the performance of this Agreement by Parent and
Merger Sub will not, require any consent, approval, order, permit, or
authorization from, or registration, notification or filing with, any
Governmental Entity, except for the filing and recordation of appropriate merger
documents as required by the CGCL and for such other consents, approvals,
orders, permits, authorizations, registrations, notifications or filings, which
if not obtained or made could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.

SECTION 4.07 Permits; Compliance.

1. Each of Parent and each Parent Subsidiary is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for Parent and each Parent Subsidiary to
own, lease and otherwise hold and operate its properties and other assets and to
carry on its business as it is now being conducted and as currently proposed to
be conducted (the "Parent Permits"), except where the failure of Parent
and each Parent Subsidiary to possess such Parent Permits could not reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse
Effect. All Parent Permits are in full force and effect and will remain so after
the Closing and no suspension or cancellation of any Parent Permit is pending
or, to the knowledge of Parent, threatened. Neither

A-31


Parent nor any Parent
Subsidiary has received any notice or other communication from any Governmental
Entity regarding (i) any actual or possible violation of or failure to
comply with any term or requirement of any Parent Permit, or (ii) any
actual or possible revocation, withdrawal, suspension, cancellation, termination
or modification of any Parent Permit.
2. Neither Parent nor any Parent Subsidiary is in conflict
with, or in default or violation of, (i) any Law applicable to Parent or
any Parent Subsidiary or by which any property or asset of Parent or any Parent
Subsidiary is bound or affected, (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any Parent Subsidiary is a party or by which
Parent or any Parent Subsidiary or any property or asset of Parent or any Parent
Subsidiary is bound or affected, or (iii) any Parent Permit, except where
the failure of Parent and each Parent Subsidiary to possess such Parent Permits
could not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.

SECTION 4.08 SEC Filings; Financial
Statements.

1. Parent has filed all forms, reports and documents
required to be filed by it with the Securities and Exchange Commission (the
"SEC") since December 31, 1996 through the date of this Agreement
(collectively, the "Parent SEC Reports"). As of the respective dates they
were filed (and if amended or superceded by a filing prior to the date of this
Agreement, then on the date of such filing), (i) the Parent SEC Reports
complied in all material respects with the requirements of the Securities Act or
the Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), as the case may
be, and (ii) none of the Parent SEC Reports contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. Parent has
provided the Company with a true and correct copy of any draft Parent SEC
Reports currently being prepared and not yet filed with the SEC.
2. Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Parent SEC Reports (the
"Parent Financial Statements") was prepared in accordance with U.S. GAAP
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q or 8-K promulgated by the SEC) and each presented
fairly, in all material respects, the consolidated financial position of Parent
and its consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to have a Parent Material Adverse Effect). The balance sheet of
Parent contained in the Parent SEC Reports as of September 30, 2001 is
hereinafter referred to as the "Parent Balance Sheet."

SECTION 4.09 Undisclosed Liabilities.
Except for (i) Liabilities that are fully reflected or reserved against on the
Parent Balance Sheet and (ii) Liabilities incurred in the ordinary course of
business consistent with past practice that would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect,
since the date of the Parent Balance Sheet, Parent has not incurred any
Liability of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) that would be required to be
reflected on, or reserved against, in a balance sheet of Parent, or in the notes
thereto, prepared in accordance with the published rules and regulations of the
SEC and U.S. GAAP.

SECTION 4.10 Absence of Certain Changes or Events. Since the
date of the Parent Balance Sheet, except as contemplated by or as disclosed in
this Agreement, Parent and the Parent Subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner consistent
with past practice and, since such date, (a) there has not been any Parent
Material Adverse Effect and (b) Parent and the Parent Subsidiaries have not
taken or legally committed to take any of the actions specified in Sections
5.04(a) through 5.04(z).

SECTION 4.11 Absence of Litigation. There is no litigation,
suit, claim, action, proceeding or investigation pending or, to the knowledge of
Parent, threatened against Parent or any Parent Subsidiary, or any property or
asset owned or used by Parent or any Parent Subsidiary or any person whose
liability Parent or any Parent Subsidiary has or may have assumed, either
contractually or by operation of Law, before any arbitrator or Governmental
Entity (a "Parent Legal Proceeding") that could reasonably be expected,
if resolved adversely to

A-32

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SECTION 4.12 Employee Benefit Plans; Labor Matters.

1. Schedule 4.12(a) of the Parent Disclosure Schedule
listsall employee benefit plans (as defined in Section 3(3) of ERISA) and
all bonus, stock option, stock purchase, stock appreciation right, restricted
stock, phantom stock, incentive, deferred compensation, retiree medical,
disability or life insurance, cafeteria benefit, dependent care, disability,
director or employee loan, fringe benefit, sabbatical, supplemental retirement,
severance or other benefit plans, programs or arrangements, (whether legally
enforceable or not, whether formal or informal and whether in writing or not)
(each, a "Parent Plan," and collectively, the "Parent Plans") to
which Parent or any Parent Subsidiary is a party, with respect to which Parent
or any Parent Subsidiary has any obligation or which are maintained, contributed
to or sponsored by Parent or any Parent Subsidiary for the benefit of any
current or former employee, officer or director of Parent or any Parent
Subsidiary
2. Each Parent Plan is in writing and Parent has made
available to the Company a true and complete copy of each Parent Plan (or a
written summary where the Parent Plan is not in writing) and a true and complete
copy of each material document, if any, prepared in connection with each such
Parent Plan, including, without limitation, and only if applicable, (i) a
copy of each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, (iii) the two most
recent annual reports (Form 5500 series and all schedules and financial
statements attached thereto) required under ERISA or the Code, (iv) the
most recently received Internal Revenue Service determination letter for each
Parent Plan intended to qualify under Section 401(a) of the Code, (v) the
most recently prepared actuarial report and financial statement in connection
with each such Parent Plan, (vi) any material correspondence with the
Internal Revenue Service or the Department of Labor with respect to each such
Parent Plan and (vii) each form of notice of grant and stock option agreement
used to document Parent Options. Except for the Parent Plans, neither Parent nor
any Parent Subsidiary has an express or implied commitment, whether legally
enforceable or not, (x) to create, incur liability with respect to, or
cause to exist, any other employee benefit plan, program or arrangement that
would constitute a Parent Plan, (y) to enter into any contract or agreement
to provide compensation for services to any individual, or (z) to modify,
change the terms of or terminate any Parent Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
3. None of the Parent Plans is a Multi-employer Plan or a
Multiple Employer Plan.
4. Except as otherwise required by ERISA, the Code or other
applicable Federal, state, local or foreign law, none of the Parent Plans
provides for the payment of separation, severance, termination or similar
benefits to any person, or obligates Parent or any Parent Subsidiary to pay
separation, severance, termination or similar-type benefits solely or partially
as a result of any transaction contemplated by this Agreement or as a result of
a "change in ownership or control," within the meaning of such term under
Section 280G of the Code. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, either
alone or together with another event, will (i) result in any payment
(including, without limitation, severance, unemployment compensation, golden
parachute, forgiveness of indebtedness or otherwise) becoming due under any
Parent Plan, whether or not such payment is contingent, (ii) increase any
benefits otherwise payable under any Parent Plan or other arrangement,
(iii) result in the acceleration of the time of payment, vesting or funding
of any benefits including, but not limited to, the acceleration of the vesting
and exercisability of any Parent Option, whether or not contingent, or
(iv) affect in any material respects any Parent Plan's current treatment
under any Laws

A-33


including any Tax or social contribution Law. No Parent Plan
provides, or reflects or represents any liability to provide, retiree health,
disability, or life insurance benefits to any person for any reason, except as
may be required by COBRA, or other applicable Federal, state, local or foreign
statute or other law, and Parent has never represented, promised or contracted
(whether in oral or written form) to any employee (either individually or to
employees as a group) or any other person that such employee or other person
would be provided with retiree health, disability, or life insurance benefits,
except to the extent required by applicable Federal, state, local or foreign
statute or other law.
5. Each Parent Plan is now and always has been operated in
accordance in all material respects with its terms and the requirements of all
applicable Laws, regulations and rules promulgated thereunder including, without
limitation, ERISA, COBRA, FMLA and the Code. Each of Parent and each Parent
Subsidiary has substantially performed in all material respects all material
obligations required to be performed by it under, is not in any respect in
default under or in violation of, and has no knowledge of any default or
violation by any party to, any Parent Plan. No action, claim or proceeding is
pending or, to the knowledge of Parent, threatened with respect to any Parent
Plan (other than claims for benefits in the ordinary course) and, to the
knowledge of Parent, no fact or event exists which could give rise to any such
action, claim or proceeding. To Parent's knowledge, neither Parent nor any ERISA
Affiliate of Parent is subject to any penalty or Tax with respect to any Parent
Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the
Code. Each Parent Plan can be amended, terminated or otherwise discontinued at
any time without material liability to Parent, the Company or any of their ERISA
Affiliates (other than ordinary administration expenses). Neither Parent nor any
affiliate has, prior to the Effective Time and in any material respect, violated
any of the health care continuation requirements of COBRA, the requirements of
FMLA, the requirements of the Health Insurance Portability and Accountability
Act of 1996, the requirements of the Women's Health and Cancer Rights Act of
1998, the requirements of the Newborns' and Mothers' Health Protection Act of
1996, or any amendment to each such act, or any similar provisions of state Law
applicable to its employees.
6. Each Parent Plan intended to qualify under Section 401(a)
or Section 401(k) of the Code and each trust intended to qualify under
Section 501(a) of the Code (i) has received a favorable determination, opinion,
notification or advisory letter from the Internal Revenue Service with respect
to each such Parent Plan as to its qualified status under the Code, including
all amendments to the Code effected by the Tax Reform Act of 1986 and subsequent
legislation, and no fact or event has occurred since the date of such
determination letter or letters from the Internal Revenue Service to adversely
affect the qualified status of any such Parent Plan or the exempt status of any
such trust, or (ii) has remaining a period of time under applicable Treasury
regulations or Internal Revenue Service pronouncements in which to apply for
such a letter and make any amendments necessary to obtain a favorable
determination as to the qualified status of each such Parent Plan.
7. Neither Parent nor any Parent Subsidiary nor any ERISA
Affiliate has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than liability for premiums to the Pension Benefit
Guaranty Corporation arising in the ordinary course), including, without
limitation, any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA or
(ii) the withdrawal from any Multi-employer Plan or Multiple Employer Plan,
and no fact or event exists which could give rise to any such
liability.
8. Neither Parent nor any Parent Subsidiary has, since
December 31, 1995, terminated, suspended, discontinued contributions to or
withdrawn from any employee pension benefit plan, as defined in
Section 3(2) of ERISA, including, without limitation, any Multi-employer
Plan. All contributions, premiums or payments required to be made or accrued
with respect to any Parent Plan have been made on or before their due dates. All
such contributions have been fully deducted for income tax purposes and no such
deduction has been challenged or disallowed by any Governmental Entity and, to
Parent's knowledge, no fact or event exists which could give rise to any such
challenge or disallowance.
9. (i) Neither Parent nor any Parent Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by Parent or any Parent Subsidiary or in Parent's
or any Parent Subsidiary's business, and, to Parent's knowledge, currently there
are no organizational campaigns, petitions or other unionization activities
seeking recognition of a collective bargaining unit that could affect Parent or
any Parent Subsidiary; (ii) there are no controversies, strikes, slowdowns
or work stoppages pending or, to Parent's knowledge, threatened between Parent
or any Parent Subsidiary and any of its employees, and neither

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Parent nor any
Parent Subsidiary has experienced any such controversy, strike, slowdown or work
stoppage within the past three years; (iii) neither Parent nor any Parent
Subsidiary has breached or otherwise failed to comply with the provisions of any
collective bargaining or union contract to which Parent is a party and there are
no grievances outstanding against Parent or any Parent Subsidiary under any such
agreement or contract that are now pending before any Person or Governmental
Entity or are known to Parent; (iv) there are no unfair labor practice
complaints pending against Parent or any Parent Subsidiary before the National
Labor Relations Board or any other Governmental Entity or any current union
representation questions involving employees of Parent or any Parent Subsidiary,
and, to Parent's knowledge, Parent and each Parent Subsidiary have not engaged
in any unfair labor practice; (v) Parent and each Parent Subsidiary are
currently in compliance with all material provisions of applicable Laws relating
to the employment of labor, including those related to wages, hours, worker
classification (including the proper classification of independent contractors
and consultants), collective bargaining, workers' compensation and the payment
and withholding of Taxes and other sums as required by the appropriate
Governmental Entity and has withheld and paid to the appropriate Governmental
Entity or is holding for payment not yet due to such Governmental Entity all
amounts required to be withheld from employees of Parent or any Parent
Subsidiary and is not liable for any arrears of wages, Taxes, penalties or other
sums for failure to comply with any of the foregoing; (vi) Parent and each
Parent Subsidiary has paid in full to all employees or adequately accrued for in
accordance with U.S. GAAP consistently applied all wages, salaries, commissions,
bonuses, benefits and other compensation due to or on behalf of such employees;
(vii) no claim that is now pending before any Governmental Entity has been
made against Parent or any Parent Subsidiary with respect to payment of wages,
salary, overtime pay, workers compensation benefits or disability benefits with
respect to any person currently or formerly employed by Parent or any Parent
Subsidiary, and, to Parent's knowledge, no such claim has been threatened or
asserted; (viii) neither Parent nor any Parent Subsidiary is a party to, or
otherwise bound by, any consent decree with, or citation by, any Governmental
Entity relating to employees or employment practices; (ix) Parent and each
Parent Subsidiary are in compliance with all material provisions of applicable
Laws and regulations relating to occupational safety and health Laws and
regulations, and there is no charge or proceeding with respect to a violation of
any occupational safety or health standards that has been asserted or is now
pending or threatened with respect to Parent or any Parent Subsidiary;
(x) to Parent's knowledge, Parent and each Parent Subsidiary are in
compliance with all material Laws and regulations relating to discrimination in
employment, and there is no charge of discrimination in employment or employment
practices for any reason, including, without limitation, age, gender, race,
religion or other legally protected category, which has been asserted or, to the
knowledge of Parent, threatened against Parent or any Parent Subsidiary or that
is now pending before the United States Equal Employment Opportunity Commission
or any other Governmental Entity; and (xi) to Parent's knowledge, each
employee of Parent and each Parent Subsidiary who is located in the United
States and is not a United States citizen has all approvals, authorizations and
papers necessary to work in the United States in accordance with applicable Law.
10. Section 4.12(j) of the Parent Disclosure Schedule sets
forth the name and title of each employee of Parent with the title of Vice
President or higher.

SECTION 4.13 Contracts.

1. Other than as set forth (under the appropriate
subsection) in Section 4.13(a) of the Parent Disclosure Schedule neither
Parent nor any Parent Subsidiary is bound by any:
2. employment, consulting, termination or severance
agreement, contract or commitment with any officer, director or higher level
employee, or member of Parent's Board of Directors;
3. agreement, contract or commitment containing any covenant
limiting the right of Parent or any Parent Subsidiary to engage in any line of
business, acquire any property, distribute any product or provide any service
(including geographic restrictions) or to compete with any person or granting
any exclusive distribution rights;
4. agreement, contract or commitment (i) relating to the
disposition or acquisition by Parent or any Parent Subsidiary after the date of
this Agreement of assets not in the ordinary course of business, (ii) relating
to the acquisition by Parent of any Parent Subsidiary of any other entity,
whether by means of merger, consolidation, purchase of assets or otherwise, or
(iii) pursuant to which Parent or any Parent Subsidiary has any

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ownership
interest in any corporation, partnership, joint venture or other business
enterprise (other than the Parent Subsidiaries) that is material to Parent's
business as currently conducted;
5. joint venture, stockholder, partnership or other
agreement relating to any equity ownership or profit interest;
6. contract relating to any outstanding commitment for
capital expenditures in excess of $50,000;
7. indenture, mortgage, promissory note, loan agreement,
credit agreement, security agreement, guarantee of borrowed money or other
agreement or instrument relating to the borrowing of money or extension of
credit in excess of $50,000;
8. contract providing for an "earn-out" or other contingent
payment by Parent or any Parent Subsidiary involving more than $50,000 over the
term of the contract;
9. contract or agreement which is terminable upon or
prohibits a change of ownership or control of Parent or any Parent Subsidiary;
10. contract providing for the indemnification of any
officer, director, employee or agent;
11. contract providing for any obligation of Parent or any
Parent Subsidiary to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Parent Subsidiary or any other
person; or
12. any other agreement, contract, license or commitment that
is material to the business of Parent and the Parent Subsidiaries, taken as a
whole, as currently conducted or proposed to be conducted.
13. Each agreement, contract or commitment required to be
disclosed in the Parent Disclosure Schedule pursuant to clauses (i) through (xi)
above or set forth in Section 4.15(a) of the Parent Disclosure Schedule (any
such agreement, contract or commitment, a "Parent Material Contract")
(i) is valid and binding in all material respects on Parent or a Parent
Subsidiary, as the case may be, and, to the knowledge of Parent, on the other
parties thereto, and is in full force and effect, and (ii) upon
consummation of the transactions contemplated by this Agreement, shall continue
in full force and effect without penalty or other adverse consequence. Neither
Parent nor any Parent Subsidiary is in breach or violation of, or default under,
any material terms of any Parent Material Contract and, to the knowledge of
Parent, no other party to any Parent Material Contract is in breach or violation
thereof or default thereunder.
14. Parent has delivered or made available to the Company
accurate and complete copies of all Parent Material Contracts identified in
Section 4.13(a) of the Parent Disclosure Schedule, including all amendments
thereto. Section 4.13(a) of the Parent Disclosure Schedule provides an
accurate description of the terms of each Parent Material Contract that is not
in written form.
15. To Parent's knowledge, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (i) result in a breach or
violation of, or default under, any material terms of any Parent Material
Contract, (ii) give any entity the right to declare a default, seek damages
or exercise any other remedy under any Parent Material Contract, (iii) give
any entity the right to accelerate the maturity or performance of any Parent
Material Contract or (iv) give any entity the right to cancel, terminate or
modify any Parent Material Contract.

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---

SECTION 4.14 Environmental Matters.

1. Parent and each Parent Subsidiary (i) is in
compliance in all material respects with all applicable Environmental Laws,
(ii) holds all material Environmental Permits necessary to conduct Parent's
or each Parent Subsidiary's business and (iii) is in compliance with their
respective Environmental Permits.
2. Neither Parent nor any Parent Subsidiary has released
and, to the knowledge of Parent, no other person has released Hazardous
Materials on any real property owned or leased by Parent or any Parent
Subsidiary or, during their ownership or occupancy of such property, on any
property formerly owned or leased by Parent or any Parent Subsidiary.
3. Neither Parent nor any Parent Subsidiary has received any
written request for information, or been notified that it is a potentially
responsible party, under CERCLA or any similar Law of any state, locality or any
other jurisdiction.
4. To the knowledge of Parent and Merger Sub, neither Parent
nor any Parent Subsidiary has entered into or agreed to any consent decree or
order or is subject to any judgment, decree or judicial order relating to
compliance with Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous
Materials and, to the knowledge of Parent, no investigation, litigation or other
proceeding is pending or threatened in writing with respect thereto.
5. None of the real property currently or formerly owned or
leased by Parent or any Parent Subsidiary is listed or, to the knowledge of
Parent, proposed to be listed on the "National Priorities List" under CERCLA, as
updated through the date of this Agreement, or any similar list of sites in the
United States or any other jurisdiction requiring investigation or
cleanup.

SECTION 4.15 Intellectual Property.

1. Each of Parent and the Parent Subsidiaries possesses
sufficient and legally enforceable rights (by ownership or license or otherwise)
with respect to all Intellectual Property (as defined below) necessary to
conduct their respective businesses, as previously or presently conducted,
without Infringement, except for such items as have yet to be conceived or
developed. "Parent Intellectual Property" means all Intellectual Property
owned by or exclusively licensed to Parent or any Parent Subsidiary. With
respect to patent rights, moral rights and Mark rights, the representations and
warranties of this Section 4.15(a) are made only to Parent's and the Parent
Subsidiaries' knowledge and without having conducted any special investigation
or patent or trademark search.
2. To the extent included in Parent Intellectual Property,
Section 4.15(b)(i) of the Parent Disclosure Schedule lists (by title,
number, jurisdiction and owner) all patents and patent applications; all
registered and unregistered Marks and Marks for which registration applications
are pending; and all registered and material unregistered copyrights and mask
works; and all other issuances, registrations, applications and the like with
respect to those or any other IP Rights (collectively, "Parent Scheduled
IP"). All items of Parent Scheduled IP (other than pending applications) are
valid, enforceable and subsisting to the extent such concepts are applicable,
and Company is not aware of any questions or challenges with respect thereto.
All filings, registrations and related correspondence in respect of Parent
Scheduled IP have been provided to the Company. No cancellation, termination,
expiration or abandonment of any item of Parent Scheduled IP (except natural
expiration or termination at the end of the full possible term, including
extensions and renewals) is anticipated by Parent or any Parent Subsidiary.
Except as referenced in written documentation previously provided to the Company
(including without limitation file wrappers), neither Parent nor any Parent
Subsidiary is aware of any questions or challenges with respect to the
patentability of any claims in any pending patent application included in Parent
Intellectual Property.
3. Section 4.15(c)(i) of the Parent Disclosure Schedule
lists: (i) all licenses, sublicenses and other agreements (written or otherwise)
to which Parent or a Parent Subsidiary is a party (or by which it or any Parent
Intellectual Property is bound or subject) and pursuant to which any person has
been or may be assigned, authorized to use, exercise or exploit ("Use"),
granted any license, lien or encumbrance regarding, or given access to any
Parent Intellectual Property other than pursuant to (A) written, signed,
standard form software licenses and

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support or maintenance agreements, and (B)
nondisclosure or confidentiality agreements, and (C) agreements no longer in
effect; and (ii) all licenses, sublicenses and other agreements (written or
otherwise) pursuant to which Parent or a Parent Subsidiary has been or may be
assigned, granted any license, authorized to Use or incurred any obligation in
connection with (A) any third party Intellectual Property that has been or is
incorporated or embodied in, or forms all or any part of any previous, current
or proposed product, service or Intellectual Property offering of Parent or any
Parent Subsidiary or (B) any Parent Intellectual Property (other than agreements
executed by employees and contractors pursuant to Parent's or a Parent
Subsidiary's standard form of agreement), (iii) each agreement pursuant to
which Parent or a Parent Subsidiary has deposited or is required to deposit with
an escrow agent or any other person all or part of the source code for any
product or service previously or currently offered or under development by
Parent or any Parent Subsidiary (the "Parent Source Code") (other than
such agreements which are no longer in effect, if all Parent Source Code
deposited with the escrow agent has been returned to Parent or a Parent
Subsidiary) and (iv) all consulting or other agreements (written or otherwise)
pursuant to which Parent or a Parent Subsidiary either (A) provides
services to any person or (B) receives services from any person, other than such
agreements pursuant to which Parent or the Parent Subsidiary explicitly, in
writing retains or is assigned ownership of any Intellectual Property created
pursuant to such arrangement. Except as disclosed on Section 4.15(c)(ii) of the
Parent Disclosure Schedule, neither Parent nor any of the Parent Subsidiaries
has entered into any agreement to indemnify, hold harmless or defend any other
person with respect to any assertion of Infringement or warranting the lack
thereof, other than indemnification provisions contained in standard forms of
product licenses, distribution agreements, reseller agreements, end user
licenses, or other transactions. Any standard form of employee agreement,
consulting agreement, product license, distribution agreement, reseller
agreement, end user license, or other standard form of agreement has been
clearly identified as such and provided to the Company.
4. No event or circumstance has occurred or exists that
(with or without notice, consent or the lapse of time) could reasonably be
expected to result in, and neither the execution or delivery of this Agreement
nor the consummation of the transactions contemplated by this Agreement will
result in, (i) the breach or violation of any license, sublicense or other
agreement required to be listed in Section 4.15(c)(i) of the Parent Disclosure
Schedule, (ii) the loss or expiration of any material right or option by Parent
or any of the Parent Subsidiaries (or the gain thereof by any third party) under
any such license, sublicense or other agreement, or (iii) the release,
disclosure or delivery to any third party of any Parent Source Code. Further,
each license, sublicense and agreement required to be listed on Section
4.15(c)(i) of the Parent Disclosure Schedule shall be considered, for purposes
of this Agreement, to be a "Parent Material Contract" (as such term is
defined and used elsewhere in this Agreement).
5. Except as set forth in Section 4.15(e) of the Parent
Disclosure Schedule, there is, to the knowledge of Parent and the Parent
Subsidiaries as of the date of this Agreement, no unauthorized Use or
disclosure, and no Infringement, of any Parent Intellectual Property by any
third party, including, without limitation, any employee or former employee of
Parent or any of the Parent Subsidiaries. Except as set forth in Section 4.15(e)
of the Parent Disclosure Schedule, neither Parent nor any Parent Subsidiary has
brought or threatened, at any time, any action, suit or proceeding against any
third party for any Infringement of any Parent Intellectual Property or any
material breach of any license, sublicense or agreement involving Parent
Intellectual Property.
6. Except as set forth in Section 4.15(f) of the Parent
Disclosure Schedule, Parent and the Parent Subsidiaries have taken reasonable
steps to protect and preserve the confidentiality of each item of Parent
Intellectual Property with respect to which Parent or any Parent Subsidiary
wishes to maintain confidentiality and which is not otherwise disclosed in
published patents or patent applications or registered copyrights ("Parent
Confidential Information"). Except as set forth in Section 4.15(f) of the
Parent Disclosure Schedule, all use by and disclosure to employees or others of
Parent Confidential Information has been pursuant to the terms of valid and
binding written confidentiality and nonuse/restricted-use agreements or
agreements that contain similar obligations. Except as set forth in Section
4.15(f) of the Parent Disclosure Schedule, none of Parent or any of the Parent
Subsidiaries has disclosed or delivered to any third party, or permitted the
disclosure or delivery to any escrow agent or other third party, any Parent
Source Code.
7. Except as set forth in Section 4.15(g) of the Parent
Disclosure Schedule, Parent and the Parent Subsidiaries collectively own,
exclusively, all Intellectual Property that is incorporated or embodied in, or
that forms part of, any product or service previously offered or currently being
offered or developed by Parent or any Parent Subsidiary. Without limiting the
generality of the foregoing, (i) no current or former employee or contractor of
Parent or any Parent Subsidiary has any right or interest to or in any such
Intellectual Property, and (ii)

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neither Parent nor any Parent Subsidiary
currently has any ongoing or future obligation to pay any license fee, royalty,
or other payment to any person with respect to the manufacturing, distribution,
modification, marketing, sale or license of any product or service previously
offered or currently being offered or developed by Parent or any Parent
Subsidiary. Except as set forth in Section 4.15(g) of the Parent Disclosure
Schedule, each current and former employee and contractor of Parent or any
Parent Subsidiary has executed and delivered (and to Parent's knowledge is in
compliance with) an agreement in substantially the form of Parent's standard
Proprietary Information and Inventions Agreement (in the case of current or
former employees) or Consulting Agreement (in the case of a contractor), which
agreements provide valid written assignments to Parent or such Parent Subsidiary
of all title and rights to Intellectual Property that is incorporated or
embodied in, or that forms part of, any product or service previously offered or
currently being offered or developed by Parent or any Parent Subsidiary, except
for those current or former employees and contractors whose failure to execute
and deliver such an agreement has not and would not have a Parent Material
Adverse Effect.
8. Neither Parent nor any Parent Subsidiary has received any
communication alleging or suggesting that Parent or any Parent Subsidiary has
been or may be (whether in its past, current or proposed business or otherwise)
engaged in, liable for or contributing to any Infringement, nor does Parent or
any Parent Subsidiary have any reason to expect that any such communication will
be forthcoming. To the knowledge of Parent and the Parent Subsidiaries, neither
Parent nor any Parent Subsidiary has ever, at any time, infringed,
misappropriated, or otherwise violated any IP Right of any other person, nor is
there any basis for a claim that Parent or any Parent Subsidiary has infringed,
misappropriated or otherwise violated any IP Right of any other person.
9. Except as set forth in Section 4.15(i) of the Parent
Disclosure Schedule, none of Parent or the Parent Subsidiaries is aware that any
of its employees or contractors is obligated under any agreement, commitment,
judgment, decree, order or otherwise that would conflict with the business of
Parent or any Parent Subsidiary or interfere with the use of his or her best
efforts to perform his or her duties for Parent and the Parent Subsidiaries.
10. All Parent Software is free of all viruses, worms, trojan
horses and other material known infections or intentionally harmful routines and
does not contain any bugs, errors, or problems of a material nature that, to
Parent's or any Parent Subsidiary's knowledge, could reasonably be expected to
disrupt its operation or have an adverse impact on the operation of other
software programs or operating systems.
11. Parent and the Parent Subsidiaries have obtained all
approvals from governmental entities and other regulatory bodies necessary for
exporting outside of the United States (by Parent, any Parent Subsidiary or any
of their distributors, resellers or customers) any software products previously
offered or currently being offered by Parent or any Parent Subsidiary and
importing any such products into any country in which they are or have been
distributed, sold or licensed for Use, and all such export and import approvals
in the United States and throughout the world are valid, current, and in full
force and effect.

SECTION 4.16 Taxes.

1. All Tax returns, statements, reports, declarations and
other forms and documents (including without limitation estimated Tax returns
and reports and material information returns and reports) required to be filed
with any Tax Authority with respect to any Taxable period ending on or before
the Closing, by or on behalf of Parent or any Parent Subsidiary (collectively,
"Parent Tax Returns" and individually, a "Parent Tax Return"),
have been or will be completed and filed when due (including any extensions of
such due date) and all amounts shown due on such Parent Tax Returns on or before
the Effective Time have been or will be paid on or before such date. The Parent
Balance Sheet (i) fully accrues all actual and contingent liabilities for
Taxes with respect to all periods through September 30, 2001 and Parent has
not and will not incur any Tax liability in excess of the amount reflected
(excluding any amount thereof that reflects timing differences between the
recognition of

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income for purposes of U.S. GAAP and for Tax purposes) on the
Parent Balance Sheet with respect to such periods, and (ii) properly
accrues in accordance with U.S. GAAP all material liabilities for Taxes payable
after September 30, 2001, with respect to all transactions and events
occurring on or prior to such date. All information set forth in the notes to
the Parent Balance Sheet relating to Tax matters is true, complete and accurate
in all material respects. Parent has not incurred any material Tax liability
since September 30, 2001 other than in the ordinary course of business and
Parent has made adequate provisions for all Taxes since that date in accordance
with U.S. GAAP on at least a quarterly basis. The adjusted basis of Parent's
assets exceed the sum of its liabilities.
2. Parent has withheld and paid to the applicable financial
institution or Tax Authority all amounts required to be withheld. To the best
knowledge of Parent, no Parent Tax Returns filed with respect to Taxable years
through the Taxable year ended December 31, 2001 in the case of the United
States, have been examined and closed. Parent (or any member of any affiliated
or combined group of which Parent has been a member) has not granted any
extension or waiver of the limitation period applicable to any Parent Tax
Returns that is still in effect and there is no material claim, audit, action,
suit, proceeding, or (to the knowledge of Parent) investigation now pending or
threatened against or with respect to Parent in respect of any Tax or
assessment. No notice of deficiency or similar document of any Tax Authority has
been received by Parent, and there are no liabilities for Taxes (including
liabilities for interest, additions to Tax and penalties thereon and related
expenses) with respect to the issues that have been raised (and are currently
pending) by any Tax Authority that could, if determined adversely to Parent,
materially and adversely affect the liability of Parent for Taxes. There are no
liens for Taxes (other than for current Taxes not yet due and payable) upon the
assets of Parent. Parent has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code. Parent is not
a party to any Tax exemption or other Tax-sharing agreement or subject to an
order of a foreign government, and the consummation of the Merger will not have
any adverse effect on the continued validity and effectiveness of any such Tax
exemption or other Tax-sharing agreement or order. Neither Parent nor any person
on behalf of Parent has entered into or will enter into any agreement or consent
pursuant to the collapsible corporation provisions of
Section 341(f) of the Code (or any corresponding provision of state,
local or foreign income tax Law) or agreed to have Section 341(f)(2) of the
Code (or any corresponding provision of state, local or foreign income tax Law)
apply to any disposition of any asset owned by Parent. None of the assets of
Parent is property that Parent is required to treat as being owned by any other
person pursuant to the so-called "safe harbor lease" provisions of former
Section 168(f)(8) of the Code. None of the assets of Parent directly or
indirectly secures any debt the interest on which is tax exempt under
Section 103(a) of the Code. None of the assets of Parent is "tax-
exempt use property" within the meaning of Section 168(h) of the Code.
Parent has not made and will not make a deemed dividend election under Treas.
Reg.  1.1502-32(f)(2) or a consent dividend election under Section 565 of
the Code. Parent has never been a party (either as a distributing corporation, a
distributed corporation or otherwise) to any transaction intended to qualify
under Section 355 of the Code or any corresponding provision of state Law.
Parent has not participated in (and will not participate in) an international
boycott within the meaning of Section 999 of the Code. Parent does not have
and has not had a permanent establishment in any foreign country, as defined in
any applicable Tax treaty or convention between the United States of America and
such foreign country and Parent has not engaged in a trade or business within
any foreign country. Parent has never elected to be treated as an S-corporation
under Section 1362 of the Code or any corresponding provision of Federal or
state Law. All material elections with respect to Parent's Taxes made during the
fiscal years ending December 31, 1998, 1999 and 2000 are reflected on the
Parent Tax Returns for such periods, copies of which have been provided to
Parent. After the date of this Agreement, no material election with respect to
Taxes will be made without the prior written consent of the Company, which
consent will not be unreasonably withheld or delayed. Parent is not party to any
joint venture, partnership, or other arrangement or contract which could be
treated as a partnership for Federal income tax purposes. Parent is not
currently and never has been subject to the reporting requirements of
Section 6038A of the Code. There is no agreement, contract or arrangement
to which Parent is a party that could, individually or collectively, result in
the payment of any amount that would not be deductible by reason of
Sections 280G (as determined without regard to Section 280G(b)(4)),
162 (other than 162(a)) or 404 of the Code. Parent is not a party to any
Contract, nor does it have any obligations (current or contingent) to compensate
any person for excise taxes paid pursuant to Section 4999 of the Code. Parent is
not a party to or bound by any Tax indemnity, Tax sharing or Tax allocation
agreement (whether written or unwritten or arising under operation of Federal
Law as a result of being a member of a group filing consolidated Parent Tax
Returns, under operation of certain state Laws as a result of being a member of
a unitary group, or under comparable Laws of other states or foreign
jurisdictions) that includes a party other than Parent nor does Parent owe any
amount under any such agreement. Parent has previously provided or made
available to the Company true and correct copies of all income, franchise, and
Parent Tax Returns regarding sales tax, and, as reasonably requested by the
Company,

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prior to or following the date hereof, presently existing information
statements and reports. Parent is not, and has not been, a United States real
property holding corporation (as defined in Section 897(c)(2) of the Code)
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code. Parent is not, and has not been, a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 879(c)(1)(A)(ii) of the Code. Other than by reason
of the Merger, Parent has not been and will not be required to include any
material adjustment in Taxable income for any Tax period (or portion thereof)
pursuant to Section 481 or 263A of the Code or any comparable provision
under state or foreign Tax Laws as a result of transactions, events or
accounting methods employed prior to the Merger.
3. As used in this Section 4.16, the term "Parent"
means Parent and any entity included in, or required under U.S. GAAP to be
included in, any of the Parent Financial Statements.

SECTION 4.17 Vote Required. The only vote of Parent
stockholders required to approve the Share Issuance is the vote prescribed by
Marketplace Rule 4350 of the National Association of Securities Dealers, Inc.
(as such rule may be amended after the date hereof, the "NASD Rule")(the "Parent
Stockholder Approval"). The Parent Stockholder Approval is the only vote of
holders of any class or series of the capital stock of Parent necessary for
Parent to effect the Merger and the transactions contemplated in this Agreement.
The only vote of Parent Stockholders required to approve the amendment and
restatement of the Amended and Restated Certificate of Incorporation of Parent
renaming Parent as Captiva Software Corporation (the "Parent Charter
Amendment") is the affirmative vote of the holders of at least a majority of
the outstanding shares of Parent Common Stock voting in favor of the approval of
the Parent Charter Amendment.

SECTION 4.18 Assets; Absence of Liens and Encumbrances.

1. Neither Parent nor any of the Parent Subsidiaries owns
any real property. Section 4.18 of the Parent Disclosure Schedule lists all real
property leases to which Parent or any Parent Subsidiary is a party and each
amendment thereto (all such leases, as amended, being the "Parent
Leases"), and with respect to each such lease, the aggregate monthly rent
payable thereunder and the expiration date thereof. All such current leases are
in full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a material claim.
Neither Parent nor any of the Parent Subsidiaries have subleased or otherwise
granted rights of use or occupancy of any of the premises subject to such leases
to any other persons. Other than leaseholds created under the real property
leases identified in Section 4.18(a) of the Parent Disclosure Schedule,
Parent and the Parent Subsidiaries have no leasehold interest in any real
property.
2. Parent and each Parent Subsidiary own, lease or have the
legal right to use all of the material assets, including, without limitation,
personal property (other than Intellectual Property, which is covered by
Section 4.15 hereof), used or intended to be used in the conduct of the
business of Parent or such Parent Subsidiary or otherwise owned, leased or used
by Parent or such Parent Subsidiary and, with respect to contract rights, is a
party to and enjoys the right to the benefits of all material contracts,
agreements and other arrangements used or intended to be used by Parent or such
Parent Subsidiary in or relating to the conduct of the business of Parent and
each Parent Subsidiary (all such properties, assets and contract rights,
together with the Parent Leases, being the "Parent Assets").
3. Parent and each Parent Subsidiary have good and
marketable title to, or, in the case of leased or subleased Parent Assets, valid
and subsisting leasehold interests in, all the Parent Assets, free and clear of
all Liens except for (x) Liens for current Taxes not yet due and payable,
and (y) Liens that have arisen in the ordinary course of business and that
do not (in any case or in the aggregate) materially detract from the value, or
materially interfere with the present or contemplated use, of the Parent Assets
subject thereto or affected thereby. The equipment of Parent and the Parent
Subsidiaries used in the operations of their business is, taken as a whole, in
good operating condition and repair, ordinary wear and tear
excepted.

SECTION 4.19 Certain Interests. Except as disclosed in Parent
SEC Reports, no event has occurred that would be required to be reported
currently by Parent as a Certain Relationship or Related Transaction pursuant to
Item 404 of Regulation S-K promulgated under the Securities Act.

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SECTION 4.20 Insurance Policies. True and complete copies of
all insurance policies to which Parent or any Parent Subsidiary is a party or is
a beneficiary or named insured such policies have been provided or made
available to the Company. Except as set forth in Section 4.20 of the Parent
Disclosure Schedule, there have been no material claim or series of claims made
under such insurance policies within the past three years. All premiums due on
such policies have been paid, and, to Parent's knowledge, Parent and each Parent
Subsidiary is otherwise in compliance with the terms of such policies. Neither
Parent nor any Parent Subsidiary has failed to give any notice or present any
material claim under any such policy in a timely fashion, except where such
failure would not prejudice Parent's or any Parent Subsidiary's ability to make
such a claim. Such insurance to the date hereof has been maintained in full
force and effect and not been canceled or changed, except to extend the maturity
dates thereof. Neither Parent nor any Parent Subsidiary has any knowledge of any
actual or possible (i) cancellation or threatened termination of any
insurance policy, (ii) refusal of any coverage or rejection of any claim
under any insurance policy or (iii) material premium increase with respect
to any insurance policy.

SECTION 4.21 Brokers. No broker, finder or investment banker
(other than the Parent Financial Advisor (as defined in Section 4.27)) is
entitled to any brokerage, finder's or other fee or commission in connection
with the origination, negotiation or execution of this Agreement, the Merger or
the other transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or any Parent Subsidiary.

SECTION 4.22 State Takeover Statutes. The Board of Directors of
Parent has taken all action necessary to ensure that any restrictions on
business combinations contained in the DGCL will not apply to the Merger and the
other transactions contemplated by this Agreement. No other "fair price,"
"moratorium," "control share acquisition" or other similar anti-takeover statute
or regulation or any anti-takeover provision in Parent's Certificate of
Incorporation or Bylaws is, or at the Effective Time will be, applicable to
Parent, the shares of Parent Stock, the Merger or the other transactions
contemplated by this Agreement.

SECTION 4.23 Customers and Suppliers. No customer who
individually accounted for more than 10% of Parent's consolidated gross revenues
during the fiscal years ended December 31, 1999 and 2000 and the most
recent fiscal quarter ended September 30, 2001 has, within the past 12
months, cancelled or otherwise terminated, or made any threat to cancel or
terminate, its relationship with Parent or any Parent Subsidiary, or decreased
materially its usage of Parent's or any Parent Subsidiary's services or
products.

SECTION 4.24 Powers of Attorney. Except for powers of attorney
regarding immaterial matters, there are no outstanding powers of attorney
executed on behalf of Parent or any Parent Subsidiary.

SECTION 4.25 Offers. Parent has suspended or terminated, and
has the legal right to terminate or suspend, all negotiations and discussions of
any acquisition, merger, consolidation or sale of all substantially all of the
assets of Parent and the Parent Subsidiaries with parties other than the
Company.

SECTION 4.26 Books and Records. The minute books and other
similar records of Parent and each Parent Subsidiary contain complete and
accurate records of all actions taken at any meetings of Parent's or each Parent
Subsidiary's stockholders, Board of Directors or any committee thereof and of
all written consents executed in lieu of the holder of any such meeting. The
books and records of Parent and each Parent Subsidiary accurately reflect in all
material respects the assets, liabilities, business, financial condition and
results of operations of Parent and the Parent Subsidiaries and have been
maintained in accordance with good business and bookkeeping practices.

SECTION 4.27 Opinion of Financial Advisor. Parent has received
the written opinion of Pacific Crest Securities Inc. (the "Parent Financial
Advisor"), dated the date of this Agreement, to the effect that, as of the
date of this Agreement, the Exchange Ratio is fair to the Parent stockholders
from a financial point of view, a copy of which opinion will be delivered to
Parent promptly after the date of this Agreement.

SECTION 4.28 Interim Operations of Merger Sub. Merger Sub was
formed by Parent solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and
has conducted its operations only as contemplated by this Agreement. Merger Sub
has no liabilities and, except for a subscription agreement pursuant to which
all of its authorized capital stock was issued to Parent, is

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SECTION 4.29 Rights Agreement. Neither the execution, delivery
and performance of this Agreement and the Parent Voting Agreement, nor the
consummation of the Merger and the Share Issuance will result in or cause (i)
any person to become or be deemed to become an Acquiring Person within the
meaning, and pursuant to the terms, of that certain Rights Agreement, dated as
of September 9, 1997 between Parent (f/k/a Cornerstone Imaging, Inc.) and
EquiServe Trust Company, N.A., as rights agent (as has been amended from time to
time, the "Rights Agreement"), (ii) the occurrence of a Stock Acquisition
Date or a Distribution Date, in each case as defined in, and pursuant to the
terms of, the Rights Agreement, or (iii) the occurrence of a Flip-in Event,
as defined in, and pursuant to the terms of, the Rights Agreement.

ARTICLE VCONDUCT OF BUSINESSES PENDING
THE MERGER

SECTION 5.01 Conduct
of the Company Pending the Merger. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time (the "Pre-Closing Period"), the Company
agrees, and shall cause each Subsidiary (except to the extent that Parent shall
otherwise consent in writing), to carry on its business in the usual, regular
and ordinary course and in substantially the same manner as previously
conducted, to pay its debts and Taxes when due, (subject to good faith disputes
over such debts or Taxes), to pay or perform other obligations when due and, to
the extent consistent with such business, use commercially reasonable efforts
consistent with past practices and policies to preserve intact its present
business organization, keep available the services of its present officers and
key employees and consultants and preserve its relationships with customers,
suppliers, distributors, licensors, licensees, and others having business
dealings with it, to the end that its goodwill and ongoing businesses would not
be materially impaired at the Effective Time. The Company shall promptly notify
Parent of any event or occurrence not in the ordinary course of business of
Company.

By way of amplification and not limitation, except as
specifically contemplated by this Agreement or as specifically set forth in
Section 5.01 of the Company Disclosure Schedule, neither the Company nor
any Subsidiary shall during the Pre-Closing Period directly or indirectly, do,
or propose to do, any of the following without the prior written consent of
Parent, which consent shall not be unreasonably withheld or delayed:

1. amend or otherwise change its Articles of Incorporation
or Bylaws or equivalent organizational documents;
2. issue, sell, pledge, dispose of, grant, encumber,
authorize or propose the issuance, sale, pledge, disposition, grant or
encumbrance of any shares of its capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any Subsidiary, except (A)
pursuant to the terms of options, warrants or preferred stock outstanding on the
date of this Agreement, (B) the grant and exercise of new options to purchase
Company Common Stock during the Pre-Closing Period to any employee hired during
the Pre-Closing Period consistent with past practice up to that number of shares
in the aggregate of Company Common Stock that will be exchangeable for 25,000
shares of Parent Common Stock in the Merger or (C) as disclosed in Section
5.01(b) of the Company Disclosure Schedule;
3. sell, lease, license, pledge, grant, encumber or
otherwise dispose of any of its properties or assets which are material,
individually or in the aggregate, to its business, except in the ordinary course
of business, consistent with past practice;
4. declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
5. split, combine, subdivide, redeem or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
purchase or otherwise acquire, directly or indirectly, any shares of its capital
stock except from former employees, directors and consultants in accordance with
agreements providing for the repurchase of shares in connection with any
termination of service by such party;
6. acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest or any assets in
any corporation, partnership, other business organization or any division
thereof;
7. institute or settle any Company Legal Proceeding
requiring a payment in excess of $25,000 individually or $75,000 in the
aggregate;
8. incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or make any
loans or advances;
9. authorize any capital expenditure in excess of $25,000,
individually or $75,000 in the aggregate;
10. enter into any lease or contract for the purchase or sale
of any property, real or personal except in the ordinary course of business,
consistent with past practice;
11. waive or release any material right or claim, except in
the ordinary course of business, consistent with past practice;
12. (i) increase, or agree to increase, the compensation
payable, or to become payable, to its officers or employees, except for
increases in accordance with past practice in salaries or wages of its employees
who are not its officers, (ii) grant any severance or termination pay to, or
enter into any employment or severance agreement with, any of its directors,
officers or other employees, (iii) establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other Company Plan, agreement, trust,
fund, policy or arrangement for the benefit of any director, officer or
employee, or (iv) make (or become obligated to make) any bonus payments to any
of its officers or employees unless such payments are reflected in the Company
Balance Sheet; provided, however, that the foregoing provisions of
this subsection shall not apply to any amendments to employee benefit plans
described in Section 3(3) of ERISA that may be required by Law;
13. accelerate, amend or change the period of exercisability
or the vesting schedule of restricted stock or Company Options granted under any
option plan, employee stock plan or other agreement or authorize cash payments
in exchange for any Company Options granted under any of such plans except as
specifically required by the terms of such plans or any such agreement or any
related agreement in effect as of the date of this Agreement and disclosed in
the Company Disclosure Schedule;
14. except in the ordinary course of business and consistent
with past practice, extend any offers of employment to potential employees,
consultants or independent contractors with an annual salary in excess of
$100,000 or terminate any existing employment relationships without
cause;
15. amend or terminate any Company Material
Contract;
16. enter into, amend or terminate any contract, agreement,
commitment or arrangement that, if fully performed, would not be permitted under
this Section 5.01;
17. other than in the ordinary course of business consistent
with past practice, enter into any licensing, distribution, OEM agreements,
sponsorship, advertising, merchant program or other similar contracts,
agreements or obligations that may not be cancelled without penalties by the
Company upon notice of 30 days or less;
18. enter into any contract or agreement material to the
business, results of operations or financial condition of the Company, other
than sales contracts in the ordinary course of business;
19. take any action, other than reasonable and usual action
in the ordinary course of business, consistent with past practice, with respect
to accounting policies, principles or procedures;
20. make or change any material Tax or accounting election,
change any annual accounting period, adopt or change any accounting method, file
any amended Company Tax Return, enter into any closing agreement, settle any Tax
claim or assessment relating to the Company or any Subsidiary, surrender any
right to claim refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to the
Company or any Subsidiary, or take any other action or omit to take any action
that would have the effect of increasing the Tax liability of the Company or any
Subsidiary or Parent;
21. (i) sell, assign, lease, terminate, abandon,
transfer, permit to be encumbered or otherwise dispose of or grant any security
interest in and to any item of the Company Intellectual Property, in whole or in
part, (ii) grant any license with respect to any Company Intellectual
Property, other than a license of Company Software granted to customers of the
Company or any Subsidiary to whom the Company or any Subsidiary licenses such
Company Software in the ordinary course of business, (iii) develop, create
or invent any Intellectual Property jointly with any third party, or
(iv) disclose, or allow to be disclosed, any confidential Company
Intellectual Property, unless such Company Intellectual Property is subject to a
confidentiality or non-disclosure covenant protecting against disclosure
thereof;
22. revalue any of its assets, including writing down the
value of inventory or writing off notes or accounts receivable;
23. take any action or fail to take any action that would
cause there to be a Company Material Adverse Effect;
24. permit any insurance policy naming it as a beneficiary or
a loss payable payee to be cancelled or terminated without notice to
Parent;
25. write off as uncollectible, or establish any
extraordinary reserve with respect to, any account receivable or other
indebtedness in excess of $25,000 with respect to a single matter, or in excess
of $50,000 in the aggregate; or
26. take, or agree in writing or otherwise to take any of the
actions described in subsections (a) through (y) above, or any action which
is reasonably likely to cause any of the conditions set forth in Section 7.01 or
Section 7.02 not to be able to be satisfied prior to the Termination
Date.

SECTION 5.02 Company Litigation. The Company shall notify
Parent in writing promptly after learning of any claim, action, suit,
arbitration, mediation, proceeding or investigation by or before any court,
arbitrator or arbitration panel, board or other Governmental Entity initiated by
it or against it, or known by the Company to be threatened against the Company
or any of its officers, directors, employees or stockholders in their capacity
as such.

SECTION 5.03 Company Notification of Certain Matters. The
Company shall give prompt notice to Parent, of (i) the occurrence, or non-
occurrence, of any event the occurrence, or non-occurrence, of which would be
likely to cause (x) any representation or warranty contained in this
Agreement to be untrue or inaccurate such that the condition contained in
Section 7.02(a) would not be satisfied or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied such
that the condition contained in Section 7.02(b) would not be satisfied and
(ii) any failure or inability of the Company to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder such that the condition contained in Section 7.02(b) would not be
satisfied; provided, however, that the delivery of any notice
pursuant to this Section 5.03 shall not limit or otherwise affect the
remedies available hereunder to Parent.

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SECTION 5.04 Conduct of Business by Parent and the Parent
Subsidiaries Pending the Merger. During the Pre-Closing Period, Parent
agrees, and shall cause each Parent Subsidiary (except to the extent that the
Company shall otherwise consent in writing), to carry on its business in the
usual, regular and ordinary course and in substantially the same manner as
previously conducted, to pay its debts and Taxes when due, (subject to good
faith disputes over such debts or Taxes), to pay or perform other obligations
when due and, to the extent consistent with such business, use all reasonable
efforts consistent with past practices and policies to preserve intact its
present business organization, keep available the services of its present
officers and key employees and consultants and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it, to the end that its goodwill and ongoing businesses
would be unimpaired at the Effective Time. Parent shall promptly notify the
Company of any event or occurrence not in the ordinary course of business of
Parent.

By way of amplification and not limitation, except as
specifically contemplated by this Agreement or as specifically set forth in
Section 5.04 of the Parent Disclosure Schedule, neither Parent nor any
Parent Subsidiary shall, between the date of this Agreement and the Effective
Time, directly or indirectly, do, or propose to do, any of the following without
the prior written consent of the Company which consent shall not be unreasonably
withheld:

1. amend or otherwise change its Certificate of
Incorporation or Bylaws or equivalent organizational documents;
2. issue, sell, pledge, dispose of, grant, encumber,
authorize or propose the issuance, sale, pledge, disposition, grant or
encumbrance of any shares of its capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock or any other ownership interest (including, without
limitation, any phantom interest), of Parent or any Parent Subsidiary, except
(A) pursuant to the terms of options, warrants or preferred stock outstanding on
the date of this Agreement or (B) the grant and exercise of new options to
purchase Parent Common Stock during the Pre-Closing Period to any employee hired
during the Pre-Closing Period consistent with past practice up to 25,000 shares
of Parent Common Stock.
3. sell, lease, license, pledge, grant, encumber or
otherwise dispose of any of its properties or assets which are material,
individually or in the aggregate, to its business, except in the ordinary course
of business, consistent with past practice;
4. declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
5. split, combine, subdivide, redeem or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
purchase or otherwise acquire, directly or indirectly, any shares of its capital
stock except from former employees, directors and consultants in accordance with
agreements providing for the repurchase of shares in connection with any
termination of service by such party;
6. acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest or any assets in
any corporation, partnership, other business organization or any division
thereof;
7. institute or settle any Parent Legal Proceeding requiring
a payment of $25,000 individually or $75,000 in the aggregate;
8. incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or make any
loans or advances;
9. authorize any capital expenditure in excess of $25,000,
individually or $75,000 in the aggregate;
10. enter into any lease or contract for the purchase or sale
of any property, real or personal except in the ordinary course of business,
consistent with past practice;
11. waive or release any material right or claim, except in
the ordinary course of business, consistent with past practice;
12. (i) increase, or agree to increase, the compensation
payable, or to become payable, to its officers or employees, except for
increases in accordance with past practice in salaries or wages of its employees
who are not its officers, (ii) grant any severance or termination pay to, or
enter into any employment or severance agreement with, any of its directors,
officers or other employees, (iii) establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other Parent Plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee, or
(iv) make (or become obligated to make) any bonus payments to any of its
officers or employees unless such payments are reflected in the Parent Balance
Sheet; provided, however, that the foregoing provisions of this
subsection shall not apply to any amendments to employee benefit plans described
in Section 3(3) of ERISA that may be required by Law;
13. accelerate, amend or change the period of exercisability
or the vesting schedule of restricted stock or Parent Options granted under any
option plan, employee stock plan or other agreement or authorize cash payments
in exchange for any Parent Options granted under any of such plans except as
specifically required by the terms of such plans or any such agreement or any
related agreement in effect as of the date of this Agreement and disclosed in
the Parent Disclosure Schedule;
14. extend any offers of employment to potential employees,
consultants or independent contractors with an annual salary in excess of
$100,000 or terminate any existing employment relationships without
cause;
15. amend or terminate any Parent Material Contract;
16. enter into, amend or terminate any contract, agreement,
commitment or arrangement that, if fully performed, would not be permitted under
this Section 5.04;
17. other than in the ordinary course of business consistent
with past practice, enter into any licensing, distribution, OEM agreements,
sponsorship, advertising, merchant program or other similar contracts,
agreements or obligations that may not be cancelled without penalties by the
Company upon notice of 30 days or less;
18. enter into any contract or agreement material to the
business, results of operations or financial condition of Parent, other than
sales Contracts in the ordinary course of business;
19. take any action, other than reasonable and usual action
in the ordinary course of business, consistent with past practice, with respect
to accounting policies, principles or procedures;
20. make or change any material Tax or accounting election,
change any annual accounting period, adopt or change any accounting method, file
any amended Parent Tax Return, enter into any closing agreement, settle any Tax
claim or assessment relating to Parent or any Parent Subsidiary, surrender any
right to claim refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to Parent
or any Parent Subsidiary, or take any other action or omit to take any action
that would have the effect of increasing the Tax liability of Parent;
21. (i) sell, assign, lease, terminate, abandon,
transfer, permit to be encumbered or otherwise dispose of or grant any security
interest in and to any item of the Parent Intellectual Property, in whole or in
part, (ii) grant any license with respect to any Parent Intellectual
Property, other than a license of Parent Software granted to customers of Parent
or any Parent Subsidiary to whom Parent or any Parent Subsidiary licenses such
Parent Software in the ordinary course of business, (iii) develop, create
or invent any Intellectual Property jointly with any

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third party, or
(iv) disclose, or allow to be disclosed, any confidential Parent
Intellectual Property, unless such Parent Intellectual Property is subject to a
confidentiality or non-disclosure covenant protecting against disclosure
thereof;
22. revalue any of its assets, including writing down the
value of inventory or writing off notes or accounts receivable;
23. take any action or fail to take any action that would
cause there to be a Parent Material Adverse Effect;
24. permit any insurance policy naming it as a beneficiary or
a loss payable payee to be cancelled or terminated without notice to
Parent;
25. write off as uncollectible, or establish any
extraordinary reserve with respect to, any account receivable or other
indebtedness in excess of $25,000 with respect to a single matter, or in excess
of $50,000 in the aggregate; or
26. take, or agree in writing or otherwise to take, or
intentionally omit to take, any of the actions described in subsections (a)
through (y) above, or any action which is reasonably likely to cause any of the
conditions set forth in Section 7.01 or Section 7.02 not to be able to be
satisfied prior to the Termination Date.

SECTION 5.05 Parent Litigation. Parent shall notify the Company
in writing promptly after learning of any claim, action, suit, arbitration,
mediation, proceeding or investigation by or before any court, arbitrator or
arbitration panel, board or other Governmental Entity initiated by it or against
it, or known by Parent to be threatened against Parent or any of its officers,
directors, employees or stockholders in their capacity as such.

SECTION 5.06 Parent Notification of Certain Matters. Parent
shall give prompt notice to the Company, of (i) the occurrence, or non-
occurrence, of any event the occurrence, or non-occurrence, of which would be
likely to cause (x) any representation or warranty contained in this
Agreement to be untrue or inaccurate such that the condition contained in
Section 7.01(a) would not be satisfied or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied such
that the condition contained in Section 7.01(b) would not be satisfied and
(ii) any failure or inability of Parent to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder such that the condition contained in Section 7.01(b) would not be
satisfied; provided, however, that the delivery of any notice
pursuant to this Section 5.06 shall not limit or otherwise affect the
remedies available hereunder to the Company.

ARTICLE VIADDITIONAL
AGREEMENTS

SECTION 6.01 Registration Statement; Joint Proxy
Statement.

1. As promptly as practicable after the execution of this
Agreement, (i) Parent and the Company shall prepare and Parent shall file
with the SEC a joint proxy statement (together with any amendments thereof or
supplements thereto, the "Joint Proxy Statement") relating to the
respective meetings of the Company shareholders (the "Company Shareholders'
Meeting") to be held to consider approval of the Company Charter Amendment,
the Merger and this Agreement (including the principal terms hereof) and of the
Parent stockholders (the "Parent Stockholders' Meeting") to be held to
consider approval of the Share Issuance and the Parent Charter Amendment and
(ii) Parent shall prepare and file with the SEC a registration statement on Form
S-4 (together with all amendments and supplements thereto,
the "Registration Statement") in which the Joint Proxy Statement
shall be included as part of the prospectus, in connection with the registration
under the Securities Act of the Parent Shares to be issued to the shareholders
of the Company pursuant to the Merger. Each of Parent and the Company shall use
its reasonable best efforts to cause the Registration Statement to become
effective as promptly as practicable, and prior to the effective date of the
Registration Statement. Prior to the Effective Time, Parent shall use its
reasonable best efforts to obtain all applicable approvals needed to ensure that
the Parent Common Stock to be issued in the Merger will be registered or
qualified as may be required under the securities law of every jurisdiction of
the United

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States in which any registered holder of Company Shares has an
address of record on the record date for determining the shareholders entitled
to notice of and to vote at the Company Shareholders' Meeting. Each of Parent
and the Company shall furnish all information concerning itself as the other may
reasonably request in connection with such actions and the preparation of the
Registration Statement and Joint Proxy Statement. As promptly as practicable,
but in no event later than the third business day, after the Registration
Statement shall have become effective, each of Parent and the Company shall mail
or cause to be mailed the Joint Proxy Statement to their respective
stockholders. The Registration Statement shall register for resale the shares of
Parent Common Stock received in the Merger by each affiliate (within the meaning
of Rule 145 of the Securities Act) of the Company that is not an affiliate
(within the meaning of Rule 144 of the Securities Act) of Parent immediately
following the Effective Time, and shall include the information required by Item
7 of Form S-4 and Item 507 of Regulation S-K under the Securities Act for the
benefit of such affiliates as selling stockholders of the number of shares of
Parent Common Stock received in the Merger. If required by applicable Legal
Requirements after the Effective Time, Parent shall file a post-effective
amendment on Form S-3 to the Registration Statement (the "S-3 Amendment")
which shall include a resale prospectus for the selling stockholders of the
number of shares of Parent Common Stock received by them in the Merger, and
Parent shall keep the S-3 Amendment effective until the earlier of one year
after the Effective Time or the date of final sale by the selling stockholders
of all shares of Parent Common Stock registered on the S-3 Amendment.
2. Subject to paragraph (c) of this Section 6.01, the Joint
Proxy Statement shall include the unanimous recommendation of the Board of
Directors of the Company to the shareholders of the Company to vote in favor of
approving the Company Charter Amendment, this Agreement (including the principal
terms hereof) and the Merger (the "Company Board Recommendation") and
neither the Board of Directors of the Company nor any committee thereof shall
withhold, withdraw, amend, modify or change, or propose or resolve to withhold,
withdraw, amend, modify or change, in each case in a manner adverse to Parent,
the Company Board Recommendation. For purposes of this Agreement, the Company
Board Recommendation shall be deemed to have been modified in a manner adverse
to Parent if such recommendation shall no longer be unanimous.
3. Prior to the approval of this Agreement and the approval
of the Merger by the requisite vote of the shareholders of the Company, nothing
in this Agreement shall prevent the Company's Board of Directors from
withholding, withdrawing, amending, modifying or changing the Company Board
Recommendation if (i) a Company Superior Proposal (as defined in Section 6.05(c)
below) is made to the Company and is not withdrawn, (ii) the Company shall
have promptly, but in no event more than 24 hours after receiving such Company
Superior Proposal, provided written notice to Parent advising Parent that the
Company has received a Company Superior Proposal, specifying the terms and
conditions of such Company Superior Proposal in reasonable detail and
identifying the person or entity making such Company Superior Proposal (a
"Notice of Company Superior Proposal"), (iii) Parent shall not have,
within five business days of Parent's receipt of the Notice of Company Superior
Proposal, made an offer that the Company's Board of Directors by a majority vote
determines in its good faith judgment to be at least as favorable to the Company
and its shareholders as such Company Superior Proposal (it being agreed that the
Company's Board of Directors shall convene a meeting to consider any such offer
by Parent promptly following the receipt thereof), (iv) the Board of Directors
of the Company concludes in good faith, after consultation with its outside
legal counsel, that, in light of such Superior Proposal, the failure to
withhold, withdraw, amend, modify or change such recommendation would create a
substantial risk of liability for breach of its fiduciary obligations to the
Company and its shareholders under applicable Law and (v) the Company shall not
have violated any of the restrictions set forth in Section 6.05 and shall have
complied with this Section 6.01(c). The Company shall provide Parent with
reasonable advance notice of any meeting of the Company's Board of Directors
(provided that in no event shall such notice be given less than 36 hours
prior to any such meeting) at which the Company's Board of Directors is
reasonably expected to consider any Company Acquisition Transaction (as defined
in Section 6.05(b) below). Subject to applicable Law, nothing contained in this
Section 6.01(c) shall limit the Company's obligation to convene and hold the
Company Shareholders' Meeting (regardless of whether the Company Board
Recommendation shall have been withheld, withdrawn, amended, modified or
changed).
4. Subject to paragraph (e) of this Section 6.01, the Joint
Proxy Statement shall include the unanimous recommendation of the Board of
Directors of Parent to the stockholders of Parent to vote in favor of the Share
Issuance and the Parent Charter Amendment (the "Parent Board
Recommendation") and neither the Board of Directors of Parent nor any
committee thereof shall withhold, withdraw, amend, modify or change, or propose
or resolve to withhold, withdraw, amend, modify or change, in each case in a
manner adverse to the Company, the

A-49


Parent Board Recommendation. For purposes of
this Agreement, such recommendation of the Board of Directors shall be deemed to
have been modified in a manner adverse to the Company if such recommendation
shall no longer be unanimous.
5. Prior to the adoption and approval of this Agreement and
the approval of the Merger by the requisite vote of the stockholders of Parent,
nothing in this Agreement shall prevent the Parent's Board of Directors from
withholding, withdrawing, amending, modifying or changing the Parent Board
Recommendation if (i) a Parent Superior Proposal (as defined in Section
6.06(c) below) is made to Parent and is not withdrawn, (ii) Parent shall have
promptly, but in no event more than 24 hours after receiving such Company
Superior Proposal, provided written notice to the Company advising the Company
that Parent has received a Parent Superior Proposal, specifying the terms and
conditions of such Parent Superior Proposal in reasonable detail and identifying
the person or entity making such Parent Superior Proposal (a "Notice of
Parent Superior Proposal"), (iii) the Company shall not have, within
five business days of the Company's receipt of the Notice of Parent Superior
Proposal, made an offer that the Parent's Board of Directors by a majority vote
determines in its good faith judgment (based on the written advice of a
reputable financial advisor) to be at least as favorable to Parent and its
stockholders as such Parent Superior Proposal (it being agreed that the Parent's
Board of Directors shall convene a meeting to consider any such offer by the
Company promptly following the receipt thereof), (iv) the Board of Directors of
Parent concludes in good faith, after consultation with its outside legal
counsel, that, in light of such Parent Superior Proposal, the failure to
withhold, withdraw, amend, modify or change such recommendation would create a
substantial risk of liability for breach of its fiduciary obligations to Parent
and its stockholders under applicable Law and (v) Parent shall not have violated
any of the restrictions set forth in Section 6.06 and shall have complied with
this Section 6.01(e). Parent shall provide the Company with reasonable advance
notice of any meeting of the Parent's Board of Directors at which the Parent's
Board of Directors (provided that in no event shall such notice be given
less than 36 hours prior to any such meeting) is reasonably expected to consider
any Parent Acquisition Transaction (as defined in Section 6.06(b) below).
Subject to applicable Law, nothing contained in this Section 6.01(e) shall limit
the Parent's obligation to convene and hold the Parent Stockholders' Meeting
(regardless of whether the Parent Board Recommendation shall have been withheld,
withdrawn, amended, modified or changed).
6. Subject to Sections 6.01(c) and (e) with respect to the
Company Board Recommendation or the Parent Board Recommendation, no amendment or
supplement to the Joint Proxy Statement or the Registration Statement will be
made by Parent or the Company without the approval of the other party (such
approval not to be unreasonably withheld or delayed). Each of Parent and the
Company will advise the other, promptly after it receives notice thereof, of the
time the SEC has issued formal comments to the Registration Statement, of the
time at which the Registration Statement has become effective or any supplement
or amendment has been filed, of the issuance of any stop order, of the
suspension of the qualification of the Parent Shares issuable in connection with
the Merger for offering or sale in any jurisdiction, or of any request by the
SEC for amendment of the Joint Proxy Statement or the Registration Statement or
comments thereon and responses thereto or requests by the SEC for additional
information.
7. The information supplied by Parent for inclusion in the
Registration Statement and the Joint Proxy Statement shall not, at (i) the time
the Registration Statement is declared effective, (ii) any time the Joint Proxy
Statement is mailed to the stockholders of the Company and/or Parent,
(iii) the time of the Company Shareholders' Meeting, (iv) the time of
the Parent Stockholders' Meeting, and (v) the Effective Time, contain any untrue
statement of a material fact or fail to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to Parent or any
Parent Subsidiary, or their respective officers or directors, that should be set
forth in an amendment or a supplement to the Registration Statement or Joint
Proxy Statement is discovered by Parent, Parent shall promptly inform the
Company. All documents that Parent is responsible for filing with the SEC in
connection with the Merger or the other transactions contemplated by this
Agreement will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act.
8. The information supplied by the Company for inclusion in
the Registration Statement and the Joint Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) any time the Joint
Proxy Statement is mailed to the stockholders of the Company and/or Parent,
(iii) the time of the Company Shareholders' Meeting, (iv) the time of the
Parent Stockholders' Meeting and (v) the Effective Time, contain any

A-50


untrue
statement of a material fact or fail to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to the Company
or any Company Subsidiary, or their respective officers or directors, that
should be set forth in an amendment or a supplement to the Registration
Statement or Joint Proxy Statement is discovered by the Company, the Company
shall promptly inform Parent. All documents that the Company is responsible for
filing with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act.
9. At or prior to the filing of the Form S-4 Registration
Statement, Parent, Merger Sub and the Company shall execute and deliver to
Gunderson Dettmer and Cooley Godward certificates as contemplated in Section
6.09 of this Agreement. At the Effective Time, Parent, Merger Sub and the
Company shall each confirm to Gunderson Dettmer and Cooley Godward the accuracy
and completeness as of the Effective Time of the certificates delivered pursuant
to the immediately preceding sentence. Following delivery of such certificates,
each of Parent and the Company shall use its reasonable efforts to cause
Gunderson Dettmer and Cooley Godward, respectively, to deliver to it a tax
opinion satisfying the requirements of Item 601 of Regulation S-K promulgated
under the Securities Act. In rendering such opinions, each of such counsel shall
be entitled to rely of the certificates referred to in this Section
6.02(i).

SECTION 6.02 Company Shareholders' Meeting. The Company shall (i)
call and hold the Company Shareholders' Meeting as promptly as practicable for
the purpose of voting upon the approval of the Company Charter Amendment, this
Agreement (including the principal terms hereof) and the Merger; it being
expressly understood that the shareholder approval of the Merger and the
shareholder approval of the Company Charter Amendment shall be contingent upon
each other, (ii) use its reasonable best efforts to hold the Company
Shareholders' Meeting as soon as practicable after the date on which the
Registration Statement becomes effective and (iii) shall in any event hold such
Company Shareholders' Meeting within 45 days after the date on which the
Registration Statement becomes effective. The Company shall use its reasonable
best efforts to solicit from its shareholders proxies in favor of the approval
of the Merger and this Agreement (including the principal terms hereof), and
shall take all other commercially reasonable action necessary or advisable to
secure the vote or consent of stockholders required by the CGCL, to obtain such
approvals, in each case in compliance with applicable Laws.

SECTION 6.03 Parent Stockholders' Meeting. Parent shall (i)
call and hold the Parent Stockholders' Meeting as promptly as practicable for
the purpose of obtaining the approval of the Share Issuance and the Parent
Charter Amendment by the Parent stockholders, (ii) use its reasonable best
efforts to hold the Parent Stockholders' Meeting as soon as practicable after
the date on which the Registration Statement becomes effective and (iii) shall
in any event hold such Parent Stockholders' Meeting within 45 days after the
date on which the Registration Statement becomes effective. Parent shall use its
reasonable best efforts to solicit from its stockholders proxies in favor of the
Share Issuance and the Parent Charter Amendment, and shall take all other
commercially reasonable action necessary or advisable to secure the vote or
consent of stockholders required by the NASD Rule, to obtain such approval in
compliance with applicable Laws.

SECTION 6.04 Access to Information; Confidentiality; Legal
Proceedings

1. Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which Parent or the Company or
any of their subsidiaries is a party or pursuant to applicable Law, from the
date of this Agreement to the Effective Time, each of Parent and the Company
shall (and shall cause their respective subsidiaries to): (i) provide to
the other (and its officers, directors, employees, subsidiaries, accountants,
consultants, legal counsel, investment bankers, advisors, agents and other
representatives, collectively, "Representatives") access at reasonable
times upon prior notice to the officers, employees, agents, properties, offices
and other facilities of it and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of it
and its subsidiaries as the other party or its Representatives may reasonably
request.
2. The parties shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations
under the Non-Disclosure Agreement, dated August 16, 2001, as amended (the
"Confidentiality Agreement"), between the Company and Parent.
3. No investigation pursuant to this Section 6.04 shall
affect any representation or warranty in this Agreement or any condition to the
obligations of the parties hereto to consummate the Merger.
4. Each of the Company and Parent shall (1) give the other
party prompt notice of the commencement or threat of commencement of any suit,
action, investigation or proceeding (each a "Legal Proceeding") by or
before any Person or Governmental Body with respect to the Merger or any of the
other transactions contemplated by this Agreement once such party has knowledge
of any such Legal Proceeding, (2) keep the other party informed as to the status
of any such Legal Proceeding or threat, and (3) promptly inform the other party
of any communication to or from such Person or any Governmental Body regarding
the Merger. Except as may be prohibited by any Governmental Body or by any
applicable Laws, the Company and Parent will consult and cooperate with one
another, and will consider in good faith the views of one another, in connection
with any analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any Legal Proceeding
relating to the Merger or any of the other transactions contemplated by this
Agreement. In addition, except (i) as may be prohibited by any Governmental Body
or by any applicable Laws or (ii) as could be reasonably expected to limit or
restrict either party's ability to claim that any information is subject to the
attorney-client privilege, in connection with any Legal Proceeding under or
relating to the Merger or any of the other transactions contemplated by this
Agreement, each of the Company and Parent will permit authorized Representatives
of the other party to be present at each meeting or conference relating to any
such Legal Proceeding and to have access to and be consulted in connection with
any document, opinion or proposal made or submitted to any Governmental Body in
connection with any such Legal Proceeding.

SECTION 6.05 No
Company Solicitation of Transactions.

1. The Company will not, directly or indirectly, and will
instruct its Representatives not to, directly or indirectly, solicit, initiate
or encourage (including by means of furnishing nonpublic information), or take
any other action to facilitate, any inquiries or the making of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
that constitutes, or could reasonably be expected to lead to, any Company
Acquisition Transaction (as defined below), or enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain a Company Acquisition Transaction, or agree to or
endorse any Company Acquisition Transaction, or authorize or permit any of its
Representatives to take any such action. If any proposal or offer, or any
inquiry or contact with any person with respect thereto, regarding a Company
Acquisition Transaction is made, the Company shall notify Parent within 24 hours
of the receipt thereof and inform Parent as to the material details of any such
proposal, offer, inquiry or contact, including, without limitation, the identity
of the party making any such proposal, offer, inquiry or contact, and, if in
writing, promptly deliver or cause to be delivered to Parent a copy of such
proposal, offer, inquiry or contact and any other written material relating
thereto. The Company immediately shall cease and cause to be terminated all
existing discussions or negotiations with any parties conducted heretofore with
respect to a Company Acquisition Transaction. The Company shall not release any
third party (other than Parent) from, or waive any provision of, any
confidentiality or standstill agreement to which it is a party and shall use its
reasonable best efforts to enforce each such arrangement at the request of
Parent. Notwithstanding anything to the contrary in this Section 6.05, the
Company's Board of Directors may furnish information to, and enter into
discussions with, a person who has made (and has not withdrawn) an unsolicited,
written, bona fide proposal or offer regarding a Company Acquisition Transaction
if the Company's Board of Directors has (i) reasonably concluded after
consultation with a reputable financial advisor that such proposal or offer
could reasonably be expected to lead to a Company Superior Proposal (as defined
below), (ii) reasonably concluded, after consultation with its outside
legal counsel, that, in light of such Company Superior Proposal, the failure to
furnish such information or enter into discussions would create a substantial
risk of liability for breach of its fiduciary obligations to the Company and its
stockholders under applicable Law, (iii) provided written notice to Parent of
its intent to furnish information or enter into discussions with such person at
least three business days prior to taking any such action and (iv) obtained from
such person an executed confidentiality agreement on terms no less favorable to
the Company than those contained in the Non-Disclosure Agreement;
provided, however, that no information may be furnished and no
discussions may be entered into in the event that the Company has taken any
actions inconsistent with this Section 6.05(a); provided further,
however, that the Company's Board of Directors shall furnish to Parent
all information provided to the person who has made the Company Superior
Proposal to the extent that such information has not been previously provided to
Parent and shall keep Parent promptly and reasonably informed as to the status
of any discussions regarding such Company Superior Proposal. The Company shall
not be entitled to enter into any letter of intent or similar document or any
agreement

A-52


(other than a confidentiality agreement as permitted by this
Section 6.05) contemplation or otherwise relating to a Company Superior
Proposal unless and until this Agreement is terminated pursuant to Article VIII
hereof and the Company has paid in cash to Parent all amounts due pursuant to
Section 8.05. Without limiting the generality of the foregoing, for all
purposes under this Agreement other than clause (vi) of
Section 8.01(d), the Company acknowledges and agrees that any violation of
any of the restrictions set forth in this Section 6.05 by any Representative of
the Company, whether or not such Representative is purporting to act on behalf
of any of the Company, shall be deemed to constitute a breach of this Section
6.05 by the Company.
2. For purposes of this Agreement, a "Company Acquisition
Transaction" means any of the following involving the Company (other than
the Merger and the other transactions contemplated by this Agreement):
(i) a merger, consolidation, share exchange, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 20% or more of the assets of the Company and
the Company Subsidiaries, taken as a whole; (iii) a tender offer or exchange
offer for, or any offer to purchase directly from the Company, 20% or more of
the outstanding voting securities of the Company; (iv) any solicitation in
opposition to approval by the Company shareholders of this Agreement or the
Company Charter Amendment; or (v) any liquidation, dissolution,
recapitalization or other significant corporate reorganization of the
Company.
3. A "Company Superior Proposal" means an unsolicited
written bona fide offer made by a third party to consummate a Company
Acquisition Transaction (i) that is not attributable to a material breach by the
Company of Section 6.05(a) hereof and (ii) on terms (including conditions to
consummation of the contemplated transaction) that the Board of Directors of the
Company determines, in its good faith reasonable judgment (based on the written
advice of a reputable financial advisor), to be more favorable to the Company
shareholders from a financial point of view than the terms of the Merger and
with any financing required to consummate the transaction contemplated by such
offer committed or likely, in the reasonable good faith judgment of the
Company's Board of Directors (based on the written advice of a reputable
financial adviser), to be obtained by such third party on a timely
basis.
4. The Company agrees not to release any Person (other than
Parent) from or waive any provision of any confidentiality,
"standstill" or similar agreement to which the Company is a party
and will use its reasonable best efforts to enforce each such agreement at the
request of Parent. The Company also will promptly request each Person (other
than Parent) that has executed, within 12 months prior to the date of this
Agreement, a confidentiality, standstill or similar agreement in connection with
its consideration of a possible Company Acquisition Transaction to return all
confidential information heretofore furnished to such Person by or on behalf of
the Company.

SECTION 6.06 No Parent Solicitation of Transactions.

1. Parent will not, directly or indirectly, and will
instruct its Representatives not to, directly or indirectly, solicit, initiate
or encourage (including by means of furnishing nonpublic information), or take
any other action to facilitate, any inquiries or the making of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
that constitutes, or could reasonably be expected to lead to, any Parent
Acquisition Transaction (as defined below), or enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain a Parent Acquisition Transaction, or agree to or
endorse any Parent Acquisition Transaction, or authorize or permit any of its
Representatives to take any such action. If any proposal or offer, or any
inquiry or contact with any person with respect thereto, regarding a Parent
Acquisition Transaction is made, Parent shall notify the Company within 24 hours
of the receipt thereof and as to the material details of any such proposal,
offer, inquiry or contact, including, without limitation, the identity of the
party making any such proposal, offer, inquiry or contact, and, if in writing,
promptly deliver or cause to be delivered to the Company a copy of such
proposal, offer, inquiry or contact and any other written material relating
thereto. Parent immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to a Parent Acquisition Transaction. Parent shall not release any third party
(other than the Company) from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party and shall use its reasonable best
efforts to enforce each such arrangement at the request of the Company.
Notwithstanding anything to the contrary in this Section 6.06, the Parent's
Board of Directors may furnish information to, and enter into discussions with,
a person who has made (and has not withdrawn) an unsolicited, written, bona fide
proposal or offer regarding a Parent Acquisition Transaction if the Parent's
Board of Directors has

A-53


(i)%nbsp;reasonably concluded after consultation with its
financial advisor that such proposal or offer could reasonably be expected to
lead to a Parent Superior Proposal (as defined below), (ii) reasonably
concluded, after consultation with its outside legal counsel, that, in light of
such Parent Superior Proposal, the failure to furnish such information or enter
into discussions would create a substantial risk of liability for breach of its
fiduciary obligations to the Parent and its stockholders under applicable Law,
(iii) provided written notice to the Company of its intent to furnish
information or enter into discussions with such person at least three business
days prior to taking any such action and (iv) obtained from such person an
executed confidentiality agreement on terms no less favorable to Parent than
those contained in the Non-Disclosure Agreement; provided,
however, that no information may be furnished and no discussions may be
entered into in the event that Parent has taken any actions inconsistent with
this Section 6.06(a); provided further, however, that
Parent's Board of Directors shall furnish to the Company all information
provided to the person who has made Parent Superior Proposal to the extent that
such information has not been previously provided to the Company and shall keep
the Company promptly and reasonably informed as to the status of any discussions
regarding such Company Superior Proposal. Parent shall not be entitled to enter
into any letter of intent or similar document or any agreement (other than a
confidentiality agreement as permitted by this Section 6.06) contemplation
or otherwise relating to a Parent Acquisition Transaction unless and until this
Agreement is terminated pursuant to Article VIII hereof and Parent has paid in
cash to the Company all amounts due pursuant to Section 8.05. Without
limiting the generality of the foregoing, for all purposes under this Agreement
other than clause (vi) of Section 8.01(e), Parent acknowledges and
agrees that any violation of any of the restrictions set forth in this Section
6.06 by any Representative of Parent, whether or not such Representative is
purporting to act on behalf of any of Parent, shall be deemed to constitute a
breach of this Section 6.06 by Parent.
2. For purposes of this Agreement, a "Parent Acquisition
Transaction" means any of the following involving Parent (other than the
Merger and the other transactions contemplated by this Agreement): (i) a
merger, consolidation, share exchange, business combination or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 20% or more of the assets of Parent and Parent
Subsidiaries, taken as a whole; (iii) a tender offer or exchange offer for, or
any offer to purchase directly from Parent, 20% or more of the outstanding
voting securities of Parent; (iv) any solicitation in opposition to approval by
the Parent stockholders of the Share Issuance; or (v) any liquidation,
dissolution, recapitalization or other significant corporate reorganization of
Parent.
3. A "Parent Superior Proposal" means an unsolicited
written bona fide offer made by a third party to consummate a Parent Acquisition
Transaction (as defined below) (i) that is not attributable to a material breach
by Parent of Section 6.06(a) hereof and (ii) on terms (including conditions to
consummation of the contemplated transaction) that the Board of Directors of
Parent determines, in its good faith reasonable judgment (based on the written
advice of a reputable financial advisor), to be more favorable to Parent
stockholders from a financial point of view than the terms of the Merger and
with any financing required to consummate the transaction contemplated by such
offer committed or likely, in the reasonable good faith judgment of Parent's
Board of Directors (based on the written advice of a reputable financial
adviser), to be obtained by such third party on a timely basis.
4. Nothing contained in this Agreement shall prohibit Parent
or its Board of Directors from taking and disclosing to its stockholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act.
5. Parent agrees not to release any Person (other than the
Company) from or waive any provision of any confidentiality,
"standstill" or similar agreement to which Parent is a party and
will use its reasonable best efforts to enforce each such agreement at the
request of the Company. Parent also will promptly request each Person (other
than the Company) that has executed, within 12 months prior to the date of this
Agreement, a confidentiality, standstill or similar agreement in connection with
its consideration of a possible Parent Acquisition Transaction to return all
confidential information heretofore furnished to such Person by or on behalf of
Parent.

SECTION 6.07 Employee Benefits Matters.

1. All employees of the Company and the Company Subsidiaries
shall continue in their existing benefit plans until such time as, in Parent's
sole discretion, an orderly transition can be accomplished to

A-54


employee benefit
plans and programs maintained by Parent for its and its affiliates' employees in
the United States. Parent shall take such reasonable actions, to the extent
permitted by Parent's benefits programs, as are necessary to allow eligible
employees of the Company to participate in the health, welfare and other benefit
programs of Parent or alternative benefits programs in the aggregate that are
substantially equivalent to those applicable to employees of Parent in similar
functions and positions on similar terms (it being understood that equity
incentive plans are not considered employee benefits). Pending such action,
Parent shall maintain the effectiveness of the Company's and each Subsidiary's
benefit plans. Each continuing employee shall be given credit, for purposes of
any service requirements for participation or vesting, for his or her period of
service with the Company credited under a similar benefit plan or program prior
to the Closing Date.
2. During the Pre-Closing Period Parent and the Company may
agree that the Company take all necessary corporate action to terminate its
401(k) plan (the "401(k) Plan") effective as of the date immediately
prior to the Closing Date, but contingent on the Closing. If Parent and the
Company have so agreed, Parent shall receive from the Company evidence that the
Company's Board of Directors has adopted resolutions to terminate the 401(k)
Plan (the form and substance of which resolutions shall be subject to review and
approval of Parent), effective as of the date immediately preceding the Closing
Date.
3. With respect to all stock purchase, stock option and
stock award agreements (including any restricted stock, stock purchase, stock
option or stock award agreement under the Company Stock Plan) between the
Company and any current or former employee, director, consultant or founder
effective as of the Effective Time, any and all rights of repurchase and rights
of first refusal under each such agreement shall be assigned to Parent (or to
such other entity as Parent shall designate) by virtue of the Merger and without
any further action on the part of the Company, such assignment to be effective
as of the Effective Time.

SECTION 6.08 Further Action; Consents; Filings; Takeover
Laws.

1. Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use its reasonable best efforts to (i) take, or
cause to be taken, all appropriate action and do, or cause to be done, all
things necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective the Merger and the other transactions contemplated
by this Agreement, (ii) obtain from any Governmental Entity or any other
person all consents, licenses, permits, waivers, approvals, authorizations or
orders required to be obtained or made by Parent or the Company or any of their
subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement and (iii) make all necessary filings, and
thereafter make any other required submission, with respect to this Agreement,
the Merger and the other transactions contemplated by this Agreement required
under applicable Law. The parties hereto shall cooperate with each other in
connection with the making of all such filings and shall provide to each other
copies of such filings for review in advance of submitting such
filings.
2. During the Pre-Closing Period, each party shall promptly
notify the other party in writing of any pending or, to the knowledge of such
party, threatened action, proceeding or investigation by any Governmental Entity
or any other person (i) challenging or seeking material damages in
connection with this Agreement or the transactions contemplated hereunder or
(ii) seeking to restrain or prohibit the consummation of the Merger or the
transactions contemplated hereunder or otherwise limit the right of Parent or
its subsidiaries to own or operate all or any portion of the business, assets or
properties of the Company. Each party shall use its reasonable best efforts to
lift any restraint, injunction or other legal bar to the Merger.
3. If any Takeover Law (as defined below) may become, or may
purport to be, applicable to the transactions contemplated in this Agreement,
each of Parent and the Company and the members of their respective Boards of
Directors will grant such approvals and take such actions as are necessary and
within the authority of the applicable Board of Directors so that the
transactions contemplated by this Agreement may be consummated as promptly as
practicable, and in any event prior to the Termination Date, on the terms and
conditions contemplated hereby and thereby and otherwise act to eliminate the
effect of any Takeover Law on any of the transactions contemplated by this
Agreement. "Takeover Laws" means (1) any "moratorium," "control
share," "fair price," "supermajority," "affiliate transactions," "business
combination" or other state antitakeover laws and regulations and
(2) Section 203of the DGCL.

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---

SECTION 6.09 Plan
of Reorganization.

1. This Agreement is intended to constitute a "plan of
reorganization" within the meaning of Section 1.368-2(g) of the income tax
regulations promulgated under the Code. During the Pre-Closing Period, each
party hereto shall use its reasonable best efforts to cause the Merger to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken which action or
failure to act could prevent the Merger from qualifying as a reorganization
under the provisions of Section 368(a) of the Code. Following the Effective
Time, neither the Surviving Corporation, Parent nor any of their affiliates
shall knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could cause the Merger to fail to qualify as a reorganization under Section
368(a) of the Code.
2. As of the date hereof, the Company does not know of any
reason (i) why it would not be able to deliver to Cooley Godward LLP ("Cooley
Godward") (counsel to the Company) or Gunderson Dettmer (counsel to Parent),
at the date of the legal opinions referred to below, certificates substantially
in compliance with Internal Revenue Service published advance ruling guidelines,
with customary exceptions and modifications thereto, to enable such firms to
deliver the legal opinions contemplated by Sections 7.02(d) and 7.03(d),
and the Company hereby agrees to deliver such certificates effective as of the
date of such opinions, or (ii) why Cooley Godward or Gunderson Dettmer would not
be able to deliver the opinions required by Sections 7.02(d) and 7.03(d).
3. As of the date hereof, Parent and Merger Sub do not know
of any reason why they would not be able to deliver to Gunderson Dettmer or
Cooley Godward, at the date of the legal opinions referred to below,
certificates substantially in compliance with the Internal Revenue Service
published advance ruling guidelines, with customary exceptions and modifications
thereto, to enable such firms to deliver the legal opinions contemplated by
Sections 7.02(d) and 7.03(d), and Parent hereby agrees to deliver such
certificates effective as of the date of such opinions, or (ii) why Gunderson
Dettmer or Cooley Godward would not be able to deliver the opinions required by
Sections 7.02(d) and 7.03(d).

SECTION 6.10 Public
Announcements. The initial press release relating to this Agreement
shall be a joint press release the text of which has been agreed to by each of
Parent and the Company. Thereafter, neither the Company nor Parent shall issue
any press release or otherwise make any public statements with respect to this
Agreement, the Merger or any of the other transactions contemplated by this
Agreement without the prior written agreement of the Company and Parent unless
the disclosing party shall have been advised in writing by its outside legal
counsel that such disclosure is required under applicable Laws or any other rule
that Parent must comply with in connection with the listing of its Common Stock
on The Nasdaq National Exchange.

SECTION 6.11 Affiliate Agreements. The Company shall cause each
Affiliate to execute and deliver to Parent, as promptly as practicable after the
execution of this Agreement, an Affiliate Agreement in the form attached hereto
as Exhibit E.

SECTION 6.12 Indemnification of Officers and Directors.

1. For a period of six years from and after the Closing
Date, Parent agrees to indemnify (including advancement of expenses) and hold
harmless all past and present officers and directors of the Company (the
"Indemnified Persons") to the same extent that the officers and directors
are indemnified by the Company as of the date of this Agreement pursuant to the
Company's Articles of Incorporation and Bylaws, employment agreements or
indemnification agreements identified on the Company Disclosure Schedule or
under applicable Law for acts or omissions which occurred at or prior to the
Effective Time. The Company hereby represents to Parent that no claim for
indemnification has been made by any director or officer of the Company and, to
the knowledge of the Company, no facts exist that would serve as a valid legal
basis for any such claim for indemnification.
2. From the Effective Time until the sixth anniversary of
the Effective Time, Parent shall maintain in effect, for the benefit of the
Indemnified Persons with respect to claims arising from facts or events that
occurred prior to the Effective Time, the existing policy of directors' and
officers' liability insurance maintained by Parent for the benefit of its
current officers and directors as of the date of this Agreement (the
"Existing Policy") or a new policy providing comparable coverage
containing terms and conditions, taken as a whole, that are no less

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advantageous
to the Indemnified Persons than the terms of conditions in the Existing Policy
would be to the Indemnified Persons if such policy covered such persons;
provided, however, that Parent shall not be required to pay annual
premiums for the Existing Policy (or for any combination of the Existing Policy
and any substitute or additional policies) in excess of 150% of the annual
premium payable under the Existing Policy as of the date hereof. In the event
any future annual premiums for the Existing Policy (or any substitute policies)
exceed 150% of such current annual premium, Parent shall be entitled to reduce
the amount of coverage of the Existing Policy (or any substitute policies) to
the amount of coverage that can be obtained for a premium equal to 150% of such
current annual premium.
3. This Section 6.12 is intended to be for the benefit of,
and shall be enforceable by, the officers and directors and their heirs and
personal representatives and shall be binding on the Surviving Corporation and
its successors and assigns. In the event the Company or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any person,
then, and in each case, Parent shall use best efforts to ensure that the
successors and assigns of the Company or the Surviving Corporation, as the case
may be, are subject to and honor the indemnification obligations set forth in
this Section 6.12.

SECTION 6.13 Section 16 Relief. Provided that the Company
delivers to Parent the Section 16 Information (as defined below) in a timely
fashion, the Board of Directors of Parent, or a committee of two or more Non-
Employee Directors thereof (as such term is defined for purposes of Rule 16b-3
under the Exchange Act), shall adopt resolutions prior to the consummation of
the Merger providing that the receipt by the Company Insiders (as defined below)
of the Parent Common Stock upon conversion of the Company Shares, and of options
for Parent Common Stock upon assumption of the Company Options, in each case
pursuant to the transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information, are intended to be exempt
from liability pursuant to Section 16(b) under the Exchange Act. Such
resolutions shall comply with the approval conditions of Rule 16b-3 under the
Exchange Act for purposes of such Section 16(b) exemption, including, but not
limited to, specifying the name of the Company Insiders, the number of
securities to be acquired or disposed of for each such person, the material
terms of any derivative securities, and that the approval is intended to make
the receipt of such securities exempt pursuant to Rule 13b-3(d). "Section 16
Information" shall mean information regarding the Company Insiders, the
number of shares of the Company Stock held by each such Company Insider and
expected to be exchanged for Parent Common Stock in connection with the Merger,
and the number and description of the Company Options held by each such Company
Insider and expected to be converted into options for Parent Common Stock in
connection with the Merger. "Company Insiders" shall mean those officers
and directors of the Company who will be subject to the reporting requirement of
Section 16(b) of the Exchange Act with respect to Parent and who are listed in
the Section 16 Information.

SECTION 6.14 WARN Act. The parties agree to consult with each
other on the need for and timing of notices pursuant to the Worker Adjustment
and Retraining Notification Act, as amended (the "WARN Act"). Prior to
the Closing, the Company agrees that, if reasonably requested by Parent, it
shall, on behalf of Parent and Merger Sub, issue such notices as are required
under the WARN Act to its employees when requested by Parent in order to comply
with the applicable provisions of the WARN Act or any similarly applicable state
or local law. Any such request by Parent shall be given in time to permit the
Company to issue notices sufficiently in advance of any lay-off or closing of
any offices so that neither Parent nor any subsidiary of Parent shall be liable
under the WARN Act for any penalty or payment in lieu of notice to any employee
or Governmental Entity. Parent and the Company shall cooperate in the
preparation and giving of such notices, and no such notices shall be given
without the approval of Parent and Company, which approval shall not be
reasonably withheld.

SECTION 6.15 Conversion Schedule. The Company and Parent shall
prepare a final schedule as of the Effective Time (the "Final Conversion
Schedule"), and an officer of each party shall certify the Final Conversion
Schedule with respect to the information prepared by such party.

SECTION 6.16 Lock-Up. The Company shall use reasonable efforts
to obtain an executed Company Lock-Up Agreement, in the form attached hereto as
Exhibit F (each a "Company Lock-Up Agreement") from each of
the Company shareholders.

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SECTION 6.17 Obligations of Merger Sub. Parent shall take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.

SECTION 6.18 Company Capitalization. An updated
Section 3.04 of the Company Disclosure Schedule reflecting changes
permitted by this Agreement in the capitalization of the Company between the
date hereof and the Effective Time shall be delivered by the Company to Parent
on the Closing Date.

SECTION 6.19 Parent Capitalization. An updated
Section 4.04 of the Parent Disclosure Schedule reflecting changes permitted
by this Agreement in the capitalization of Parent between the date hereof and
the Effective Time shall be delivered by Parent to the Company on the Closing
Date.

SECTION 6.20 Listing. Prior to the
Effective Time, to the extent required under the applicable listing agreement,
Parent shall use its reasonable best efforts to cause the Parent Shares being
issued in the Merger to be approved for quotation (subject to official notice of
issuance) on The Nasdaq National Market.

SECTION 6.21 Note Amendment. From and after the date on which
the Registration Statement is declared effective by the SEC until the Effective
Time, the Company and Parent will exercise their respective reasonable best
efforts to ensure that all of the holders of outstanding Notes have executed and
delivered to the Company the Note Amendment Agreement, the Amended Notes and the
Note Conversion Agreement.

SECTION 6.22 Parent Charter Amendment. Parent shall use its
reasonable best efforts to obtain the approval of its stockholders of the Parent
Charter Amendment which shall include the submission of such amendment to the
Parent stockholders in connection with the Parent Stockholder Meeting.

SECTION 6.23 Company Investors' Rights Agreement. The Company
shall use reasonable efforts to obtain the agreement of its shareholders
necessary to terminate that certain Amended and Restated Investors' Rights
Agreement dated August 1, 2000, including the delivery of a consent to such
effect as part of the mailing to its shareholders for the purpose of delivering
the Joint Proxy Statement.

ARTICLE VIICONDITIONS TO THE
MERGER

SECTION 7.01 Conditions to the Obligations of Each
Party. The respective obligations of the Company, Parent and Merger
Sub to consummate the Merger are subject to the satisfaction or waiver (where
permissible) of the following conditions:

1. Company Shareholder Approval. The Company Charter
Amendment and this Agreement (including the principal terms hereof) shall have
been approved by the Company Shareholder Approval in accordance with the CGCL
and the Company's Articles of Incorporation and Bylaws;
2. Parent Stockholder Approval. The Share Issuance
shall have been approved by the Parent Stockholder Approval in accordance with
the NASD Rule and Parent's Bylaws;
3. No Order. No Governmental Entity or court of
competent jurisdiction located or having jurisdiction in the United States shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, decree, judgment, injunction or other order, whether temporary,
preliminary or permanent (each an "Order") which is then in effect and
has the effect of making the Merger, the Company Charter Amendment or the Share
Issuance illegal or otherwise prohibiting consummation of the Merger in
accordance with the terms of this Agreement;
4. No Governmental Litigation. There shall not be
pending or threatened any Legal Proceeding to which a Governmental Entity is a
party (i) seeking to restrain or prohibit the consummation of the Merger or
any of the other transactions contemplated by this Agreement or seeking to
obtain from Parent or the

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Company any damages that would cause a Parent Material
Adverse Effect after the Effective Time (taking into account the combined
operations of Parent and the Company) or (ii) seeking to prohibit or limit
the ownership or operation by Parent or the Company after the Effective Time of
any material portion of their respective businesses or assets;
5. No Other Litigation. There shall not be pending
any Legal Proceeding related to the transactions contemplated by this Agreement
in which, in the reasonable judgment of either Parent or the Company, there is a
reasonable possibility of an outcome that would have a Parent Material Adverse
Effect after the Effective Time (taking into account the combined operations of
Parent and the Company);
6. Compliance with the Securities Act. The
Registration Statement relating to the issuance of the shares of Parent Common
Stock in the Merger shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceeding seeking a stop
order;
7. Listing on NASDAQ. The shares of Parent Common
Stock to be issued in the Merger shall have been approved for listing (subject
to official notice of issuance) on The Nasdaq National Market;
8. Company Charter Amendment. The Company Charter
Amendment shall have become effective in accordance with the provisions of the
CGCL;
9. Dissenters. As of the date of the Company
Shareholder Meeting, shareholders holding no more than 7.5% of the Company
Shares (other than any Company Shares to be canceled pursuant to Section
2.01(a)(ii)) shall have perfected their dissenters' right in accordance with
Chapter 13 of the CGCL;
10. Conversion of Company Preferred Stock. Sufficient
holders of Company Preferred Stock shall have elected to convert the Company
Preferred Stock into Company Common Stock such that all of the Company Preferred
Stock may be converted into shares of Company Common Stock in accordance with
the Company's Articles of Incorporation, and each holder thereof shall have been
given or shall have waived prior notice of the consummation of the
Merger.
11. Note Amendment. The holders of at least 50% of the
principal amount of the Senior Convertible Notes and the holders of at least 50%
of the principal amount of the 2000 Senior Notes shall have executed and
delivered to the Company the Note Amendment and their respective Amended Notes;
and
12. Note Conversion Election. The holders of at least
75% of the principal amount of the Notes shall have, effective upon the Closing,
elected to convert their Amended Notes into shares of Company Common Stock
pursuant to the Note Conversion Agreement and shall have executed and delivered
to the Company the Note Conversion Agreement, as provided for in the Amended
Notes.
13. Parent Name Change. Parent shall have changed its
name to "Captiva Software Corporation" effective as of the Effective
Time.

SECTION 7.02 Conditions to the Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to consummate the
Merger are subject to the satisfaction or written waiver (where permissible) of
the following additional conditions:

1. Representations and Warranties. The
representations and warranties of the Company contained in Article 3 of this
Agreement shall be accurate in all respects as of the date of this Agreement and
as of the Closing Date as if made on and as of the Closing Date (except to the
extent such representations and warranties speak as of an earlier date) and
Parent shall have received a certificate to that effect signed on behalf of the
Company by the Chief Executive Officer and the Chief Financial Officer of the
Company; provided, however,that for the purposes of this
paragraph, such representations and warranties shall be deemed to be accurate
unless the failure or failures of such representations and warranties to be
accurate, either individually or in the aggregate, has had or could reasonably
be expected to have, a Company Material Adverse Effect; it being
understood that, for purposes of determining the accuracy of such
representations and warranties, (i) all Company Material Adverse

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Effect
qualifications or qualification regarding materiality, and any similar
qualifications, contained in such representations and warranties shall be
disregarded, and (ii) any update of or modification to the Company Disclosure
Schedule made or purported to have been made after the date of this Agreement
shall be disregarded;
2. Agreements and Covenants. The Company shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Effective Time; and Parent shall have received a certificate to that effect
signed on behalf of the Company by the Chief Executive Officer and the Chief
Financial Officer of the Company;
3. Approvals. The Company shall have received, each
in form and substance reasonably satisfactory to Parent, all authorizations,
consents, orders and approvals (i) required by any Governmental Entity or
official, if any, or (ii) set forth in Section 7.02(c) of the Company
Disclosure Schedule;
4. Tax Opinion of Parent's Counsel. Parent shall have
received the opinion of Gunderson Dettmer, counsel to Parent, based upon
representations of Parent, Merger Sub and the Company and normal assumptions, to
the effect that the Merger will be treated for Federal income tax purposes as a
reorganization qualifying under the provisions of Section 368(a) of the
Code, which opinion shall not have been withdrawn or modified in any material
respect. The issuance of such opinion shall be conditioned on receipt by
Gunderson Dettmer of certificates from each of Parent, Merger Sub and the
Company as contemplated in Section 6.09 of this Agreement. Each such
certificate shall be dated on or before the date of such opinion and shall not
have been withdrawn or modified in any material respect as of the Effective
Time. Notwithstanding the foregoing, if Parent's counsel does not render such
opinion, this condition shall nevertheless be deemed satisfied with respect to
Parent if Cooley Godward, counsel to the Company, renders such opinion to
Parent;
5. Affiliate Agreements. Each of the Affiliates of
the Company set forth on Schedule 7.02(e) attached hereto shall have executed
and delivered to Parent an Affiliate Agreement and such agreement shall remain
in full force and effect and shall not have been anticipatorially breached or
repudiated by any of such Affiliates;
6. Secretary's Certificate. Parent shall have
received a certificate executed by the Secretary of the Company attaching and
certifying as to matters customary for a transaction of this sort, including,
without limitation, the true and correct copies of the Company's current
Articles of Incorporation and Bylaws, a copy of the resolutions of the Company's
Board of Directors approving and adopting this Agreement and the transactions
relating hereto and the Company Shareholder Approval obtained at the Company
Shareholder Meeting;
7. FIRPTA. Parent shall have received a certificate
of the Company that the Company is not, and has not been, a United States real
property holding corporation (as defined in Section 897(c)(2) of the Code)
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code; and
8. Termination of Company's Agreements. Parent shall
have been furnished evidence reasonably satisfactory to it that (i) all
rights granted by the Company to its shareholders under the Company's
Shareholders' Agreement dated October 6, 1994, as amended, and the Security
Agreement by the Company in favor of the holders of the Notes dated
August 1, 2000, (ii) all of the rights granted to Enterprise Partners
III, L.P. ("Enterprise") pursuant to the letter agreement from the
Company to Enterprise dated October 6, 1994, and (iii) all of the
board observation and management related rights granted to Nissho Electronics
Corporation shall have been terminated prior to the Closing.

SECTION 7.03 Conditions to the Obligations of the
Company. The obligations of the Company to consummate the Merger are
subject to the satisfaction or written waiver (where permissible) of the
following additional conditions:

1. Representations and Warranties. The
representations and warranties of Parent and Merger Sub contained in Article 4
of this Agreement shall be accurate in all respects as of the date of this
Agreement and as of the Closing Date as if made on and as of the Closing Date
(except to the extent such representations and warranties speak as of an earlier
date) and the Company shall have received a certificate to that effect signed on

A-60


behalf of Parent by the Chief Executive Officer and the Chief Financial Officer
of Parent; provided, however, that for the purposes of this
paragraph, such representations and warranties shall be deemed to be accurate
unless the failure or failures of such representations and warranties to be
accurate, either individually or in the aggregate, has had or could reasonably
be expected to have, a Parent Material Adverse Effect; it being
understood that, for purposes of determining the accuracy of such
representations and warranties, (i) all Parent Material Adverse Effect
qualifications and other materiality qualifications, and any similar
qualifications, contained in such representations and warranties shall be
disregarded, and (ii) any update of or modification to the Parent Disclosure
Schedule made or purported to have been made after the date of this Agreement
shall be disregarded;
2. Agreements and Covenants. Each of Parent and
Merger Sub shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time; and the Company shall have
received a certificate to that effect signed on behalf of Parent by the Chief
Executive Officer and the Chief Financial Officer of Parent;
3. Approvals. Parent shall have received, each in
form and substance reasonably satisfactory to the Company, all authorizations,
consents, orders and approvals (i) required by any Governmental Entity or
official, if any, or (ii) set forth in Section 7.03(c) of the Parent
Disclosure Schedule;
4. Tax Opinion of Company's Counsel. The Company
shall have received the opinion of Cooley Godward, counsel to the Company, based
upon representations of Parent, Merger Sub and the Company and normal
assumptions, to the effect that the Merger will be treated for Federal income
tax purposes as a reorganization qualifying under the provisions of
Section 368(a) of the Code, which opinion shall not have been withdrawn or
modified in any material respect. The issuance of such opinion shall be
conditioned on receipt by Cooley Godward of certificates from each of Parent,
Merger Sub and the Company as contemplated in Section 6.09 of this
Agreement. Each such certificate shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material respect as
of the Effective Time. Notwithstanding the foregoing, if the Company's counsel
does not render such opinion, this condition shall nevertheless be deemed
satisfied with respect to the Company if Gunderson Dettmer, counsel to Parent,
renders such opinion to the Company;
5. Secretary's Certificate. The Company shall have
received a certificate executed by the Secretary of Parent attaching and
certifying as to matters customary for a transaction of this sort, including,
without limitation, the true and correct copies of Parent's current Certificate
of Incorporation and Bylaws, a copy of the resolutions of Parent's Board of
Directors approving and adopting this Agreement and the transactions relating
hereto and the Parent Shareholder Approval obtained at the Parent Stockholder
Meeting; and
6. Board and Resignations and Elections. Parent shall
have received written letters of resignation that shall have not been revoked or
rescinded from each of John Finegan, Thomas T. van Overbeek and Daniel D.
Tompkins in each case effective at the Effective Time, and the Board of
Directors of Parent shall have duly adopted by unanimous vote or by a majority
vote at a meeting of such Board of Directors prior to the receipt of the
aforementioned resignations resolutions that shall not have been revoked or
rescinded electing Reynolds C. Bish, Mel S. Lavitt and Jim Berglund, effective
at the Effective Time, to fill the vacancies created by the aforementioned
resignations

ARTICLE VIIITERMINATION, AMENDMENT,
WAIVER AND EXPENSES

SECTION 8.01 Termination. This Agreement may be terminated
and the Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement by the stockholders of Parent or the shareholders of the Company,
as applicable, as follows:

1. by mutual written consent duly authorized by the Boards
of Directors of each of Parent and the Company;
2. by either Parent or the Company if the Effective Time
shall not have occurred on or before May 31, 2002 (the "Termination
Date"); provided, however, that the right to terminate this
Agreement under this Section 8.01(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
3. by either Parent or the Company upon the issuance of any
Order which is final and nonappealable which would prevent the consummation of
the Merger;
4. by Parent if (i) the Board of Directors of the
Company withholds, withdraws, amends, modifies or changes the Company Board
Recommendation in a manner adverse to Parent or shall have resolved to do so,
(ii) the Board of Directors of the Company shall have recommended to the
stockholders of the Company a Company Acquisition Transaction or shall have
resolved to do so or shall have entered into any letter of intent or similar
document or any agreement, contract or commitment accepting any Company
Acquisition Transaction, (iii) the Board of Directors of the Company fails
to reject a Company Acquisition Transaction within 10 days following public
announcement or receipt by the Company of the proposal for such Company
Acquisition Transaction; it being understood that taking no position or
indicating its inability to take a position does not constitute a rejection of
such Company Acquisition Transaction, (iv) the Company shall have failed to
include in the Joint Proxy Statement the Company Board Recommendation or shall
have failed to hold the Company Shareholder Meeting as promptly as practicable
and in any event within 45 days after the Registration Statement is declared
effective, (v) the Company's Board of Directors fails to reaffirm the
Company Board Recommendation within five business days after Parent requests in
writing that such recommendation be reaffirmed, (vi) the Company shall have
willfully breached its obligations under Section 6.05;
5. by the Company if (i) the Board of Directors of
Parent withholds, withdraws, amends, modifies or changes the Parent Board
Recommendation in a manner adverse to the Company or shall have resolved to do
so, (ii) the Board of Directors of Parent shall have recommended to the
stockholders of Parent a Parent Acquisition Transaction or shall have resolved
to do so or shall have entered into any letter of intent or similar document or
any agreement, contract or commitment accepting any Parent Acquisition
Transaction, (iii) the Board of Directors of Parent fails to reject a
Parent Acquisition Transaction within 10 days following public announcement or
receipt by Parent of the proposal for such Parent Acquisition Transaction; it
being understood that taking no position or indicating its inability to take a
position does not constitute a rejection of such Parent Acquisition Transaction,
(iv) Parent shall have failed to include in the Joint Proxy Statement the
Parent Board Recommendation or shall have failed to hold the Parent Stockholder
Meeting as promptly as practicable and in any event within 45 days after the
Registration Statement is declared effective, (v) the Parent's Board of
Directors fails to reaffirm the Parent Board Recommendation within five business
days after Parent requests in writing that such recommendation be reaffirmed or
(vi) Parent shall have willfully breached its obligations under Section
6.06;
6. by Parent upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement, or
if any representation or warranty of the Company shall have become untrue as of
a date subsequent to the date of this Agreement (as if made on such subsequent
date), in either case such that any of the conditions set forth in
Sections 7.02(a) and 7.02(b), as applicable, would not be satisfied as of
such subsequent date ("Terminating Company Breach"); provided,
however, that, if such Terminating Company Breach is curable by the
Company through the exercise of its best efforts and for so long as the Company
continues to exercise such best efforts, Parent may not terminate this Agreement
under this Section 8.01(f) unless such breach is not cured within
30 days after notice thereof is provided by Parent to the Company (but no
cure period is required for a breach which, by its nature, cannot be
cured);
7. by the Company upon a breach of any representation,
warranty, covenant or agreement on the part of Parent and Merger Sub set forth
in this Agreement, or if any representation or warranty of Parent and Merger Sub
shall have become untrue as of a date subsequent to the date of this Agreement
(as if made on such subsequent date), in either case such that any of the
conditions set forth in Sections 7.03(a) and 7.03(b), as applicable, would not
be satisfied as of such subsequent date ("Terminating Parent Breach");
provided, however, that, if such Terminating Parent Breach is
curable by Parent and Merger Sub through the exercise of their respective best
efforts and for so long as Parent and Merger Sub continue to exercise such best
efforts, the Company may not terminate this Agreement under this
Section 8.01(g) unless such breach is not cured within 30 days after notice

A-62


thereof is provided by the Company to Parent (but no cure period is required for
a breach which, by its nature, cannot be cured);
8. by either Parent or the Company if (i) the Company
Shareholders' Meeting (including any adjournments or postponements thereof)
shall have been held and completed and the Company shareholders shall have taken
a final vote on a proposal to approve this Agreement (including the principal
terms hereof), the Company Charter Amendment and the Merger, and (ii) the
Company Charter Amendment, this Agreement (including the principal terms hereof)
or the Merger shall not have been approved at such meeting by the Company
Shareholder Approval (and shall not have been approved at any adjournment or
postponement thereof); provided, however, that a party shall not
be permitted to terminate this Agreement pursuant to this Section 8.01(j) if the
failure to obtain the Company Shareholder Approval is attributable to a failure
on the part of such party to perform any material obligation required to be
performed by such party at or prior to the Effective Time;
9. by either Parent or the Company if (i) the Parent
Stockholders' Meeting (including any adjournments or postponements thereof)
shall have been held and completed and the Parent stockholders shall have taken
a final vote on the Share Issuance, and (ii) the Share Issuance shall not have
been approved at such meeting (and shall not have been approved at any
adjournment or postponement thereof) by the Parent Stockholder Approval;
provided, however, that a party shall not be permitted to
terminate this Agreement pursuant to this Section 8.01(k) if the failure to
obtain the Parent Stockholder Approval is attributable to a failure on the part
of such party to perform any material obligation required to be performed by
such party at or prior to the Effective Time; or
10. by Parent or the Company if the condition set forth in
Section 7.01(l) has not been satisfied by the Termination Date,
provided, however, a party may not terminate this Agreement
pursuant to this Section 8.01(j) if the failure to satisfy such condition
or failure to close is principally due to the failure or refusal of such party
to perform or observe the covenants or agreements contained herein to be
performed or observed by it at or prior to the Effective Time.

SECTION 8.02 Effect
of Termination. In the event of termination of this Agreement
pursuant to Section 8.01, this Agreement shall forthwith become void, there
shall be no liability under this Agreement on the part of Parent, Merger Sub or
the Company or any of their respective officers or directors, and all rights and
obligations of each party hereto shall cease; provided, however,
that (i) Section 6.04(b), Sections 8.02, 8.03, 8.04, 8.05, and 8.06
and Article IX shall remain in full force and effect and survive any termination
of this Agreement and (ii) nothing herein shall relieve any party from
liability for the willful breach of any of its representations or warranties or
the breach of any of its covenants or agreements set forth in this
Agreement.

SECTION 8.03 Amendment. This Agreement may be amended by
the parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that (i)
after any approval of this Agreement (including the principal terms hereof) by
the shareholders of the Company, no amendment shall be made which by Law would
require further approval of the shareholders of the Company without the further
approval of the shareholders of the Company, (ii) after any approval of the
Share Issuance by the stockholders of Parent, no amendment shall be made which
by Law would require further approval of the stockholders of Parent without the
further approval of the stockholders of Parent and (iii) no amendment shall be
made which would adversely affect the tax consequences of the Merger to the
shareholders of the Company. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.

SECTION 8.04 Waiver. At any time prior to the Effective
Time, any party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance with any agreement or
condition contained herein. No failure on the part of any party to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of any party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No party shall be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed

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SECTION 8.05 Expenses.

1. Except as set forth in this Section 8.05, all Expenses
(as defined below) incurred in connection with this Agreement, the Merger and
the other transactions contemplated by this Agreement shall be paid by the party
incurring such expenses, whether or not the Merger or any other transaction is
consummated, except the Company shall pay fifty percent of the first $20,000 of
all Expenses relating to printing, filing and mailing the Registration Statement
and the Joint Proxy Statement and all SEC and other regulatory filing fees
incurred in connection with the Registration Statement and the Joint Proxy
Statement. "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a party hereto and its affiliates) incurred by a party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement, the preparation, printing, filing
and mailing of the Registration Statement and the Joint Proxy Statement, the
solicitation of stockholder approval, the filing of any required notices and all
other matters related to the closing of the Merger and the other transactions
contemplated by this Agreement.
2. The Company agrees that the Company shall pay to Parent
an amount equal to all of Parent's Expenses up to $250,000 if Parent shall
terminate this Agreement pursuant to Section 8.01(d) or either Parent or
the Company shall terminate the Agreement pursuant to Section 8.01(h) or
(j).
3. The Company agrees that the Company shall pay to Parent
an additional $100,000 of Parent's Expenses if (i) this Agreement is terminated
by Parent pursuant to Section 8.01(d) or by either Parent or the Company
pursuant Section 8.01(h) and (ii) the Company shall have, within 4 months
of the date of such termination, entered into an agreement to consummate a
Company Acquisition Transaction; provided, however, in no event
shall the Company be obligated pursuant to the provisions of this Section 8.05
to pay to Parent in the aggregate more than $350,000.
4. Parent agrees that Parent shall pay to the Company an
amount equal to all of the Company's Expenses up to $250,000 if the Company
shall terminate this Agreement pursuant to Section 8.01(e) or either Parent
or the Company shall terminate the Agreement pursuant to Section
8.01(i).
5. Parent agrees that Parent shall pay to the Company an
additional $100,000 of Company Expenses if (i) this Agreement is terminated by
the Company pursuant to Section 8.01(e) or by either Parent or the Company
pursuant Section 8.01(i) and (ii) Parent shall have, within 4 months of the
date of such termination, entered into an agreement to consummate a Parent
Acquisition Transaction; provided, however, in no event shall
Parent be obligated pursuant to the provisions of this Section 8.05 to pay to
the Company in the aggregate more than $350,000.
6. Any payment required to be made pursuant to Section
8.05(b) or (c) shall be made not later than five business days after
delivery to Parent or the Company, as the case may be (the "Requesting
Party"), of notice of demand for payment and an itemization setting forth in
reasonable detail all Expenses being demanded by the Requesting Party (which
itemization may be supplemented and updated from time to time by the Requesting
Party until the 60th day after the Requesting Party delivers such notice of
demand for payment), and shall be made by wire transfer of immediately available
funds to an account designated by the Requesting Party Payment of the Expenses
described in Section 8.05(b), (c), (d) or (e) shall not be in lieu of damages
incurred in the event of willful breach of the representations and warranties
set forth in this Agreement or the breach of any of the covenants or agreements
set forth in this Agreement.

SECTION 8.06 Payment. In the event that Parent or the Company
shall fail to pay the Expenses of the Requesting Party as required by Section
8.05(b), (c), (d) and/or (e) as applicable, when due, then such Expenses shall
be increased to include the costs and expenses actually incurred or accrued by
the Requesting Party (including, without limitation, fees and expenses of
counsel) in connection with the collection under and

A-64

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ARTICLE IXGENERAL
PROVISIONS

SECTION 9.01 Non-
Survival of Representations, Warranties and Agreements. The representations,
warranties and agreements in this Agreement and in any certificate delivered
pursuant hereto shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Section 8.01, as the case may be, except that the
agreements set forth in Articles I and II and Sections 6.04(b), 6.07 and
6.12 and this Article IX shall survive the Effective Time and those set forth in
Sections 6.04(b), 8.02, 8.05 and 8.06 and this Article IX shall survive
termination of this Agreement.

SECTION 9.02 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by cable, telecopy, facsimile, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this
Section 9.02):

1. if to Parent or Merger Sub:
ActionPoint, Inc.
   1299 Parkmoor Avenue
   San Jose, CA 95126
   Facsimile No.: (408) 325-3985
   Attention: John Finegan
with a copy to (which copy shall not constitute notice
hereunder):
Gunderson Dettmer Stough Villeneuve
   Franklin & Hachigian, LLP
   610 Lincoln Street
   Waltham, MA 02451
   Facsimile No.: (781) 622-1622
   Attention: Jay K. Hachigian
2. if to the Company:

Captiva Software Corporation
   10145 Pacific Heights Blvd.
   San Diego, CA 92121
   Facsimile No.: (858) 657-0889
   Attention: Rick Russo
with a copy to (which copy shall not constitute notice
hereunder):
Cooley Godward LLP
   4401 Eastgate Mall
   San Diego, CA 92121
   Facsimile No.: (858) 550-6420
   Attention: Lance W. Bridges
              Deyan P. Spiridonov

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SECTION 9.03 Certain Definitions.

1. As used in this Agreement, the following terms shall have
the following meanings:
2. "affiliate" of a specified person means a person
who directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such specified person.
3. "beneficial owner" with respect to any shares
means a person who shall be deemed to be the beneficial owner of such shares
(i) which such person or any of its affiliates or associates (as such term
is defined in Rule 12b-2 promulgated under the Exchange Act) beneficially
owns, directly or indirectly, (ii) which such person or any of its
affiliates or associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or subject only to the
passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of consideration rights, exchange rights, warrants or options,
or otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding, or (iii) which are beneficially owned,
directly or indirectly, by any other persons with whom such person or any of its
affiliates or associates or person with whom such person or any of its
affiliates or associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares.
4. "business day" means any day on which Banks are
not required or authorized to close in San Francisco, California.
5. "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise.
6. "knowledge" means, with respect to any party
hereto, actual or deemed knowledge of the directors, officers or financial
personnel of such party. An individual will be deemed to have knowledge of a
particular fact, circumstance, event or other matter if (i) such fact
circumstance, event or other matter is reflected in one or more documents,
written or electronic, that are or have been in such individual's possession or
that could reasonably be expected to be reviewed by an individual who has the
duties and responsibilities of such individual in the customary performance of
such duties and responsibilities, or (ii) such knowledge could be obtained
from reasonable inquiry of or due investigation by those persons employed by the
Company or Parent (as the case may be) and their respective subsidiaries, if
any, charged with administrative or operational responsibility for such matter
for such party.
7. "person" means an individual, corporation,
partnership, limited partnership, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
8. "subsidiary" or "subsidiaries" of any
person means any corporation, partnership, joint venture or other legal entity
of which such person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, more than 50% of the stock or other
equity interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
9. The following terms shall have the meanings defined for
such terms in the Sections of this Agreement set forth below:

`Term                                                    Section
----                                                    -------
2000 Senior Notes.......................................Recitals
401(k) Plan.............................................6.07(d)
affiliate...............................................9.03(i)
Agreement...............................................Preamble


A-66



Agreement of Merger.....................................1.02
Amended Notes...........................................Recitals
Audited Financial Statements............................3.08(a)
beneficial owner........................................9.03(a)
business day............................................9.03(a)
CERCLA..................................................3.13(e)
Certificate.............................................2.02(b)
CGCL....................................................Recitals
Closing Date............................................1.02
Closing.................................................1.02
COBRA...................................................3.11(d)
Code....................................................Recitals
Company.................................................Preamble
Company Acquisition Transaction.........................6.05(b)
Company Advisor.........................................3.21
Company Assets..........................................3.17(b)
Company Balance Sheet...................................3.08(a)
Company Board Recommendation............................6.1(b)
Company Charter Amendment...............................3.16
Company Common Stock....................................Recitals
Company Confidential Information........................3.14(f)
Company Disclosure Schedule.............................Article III
Company Employee Obligation.............................3.14(i)
Company Financial Advisor...............................3.27
Company Insiders........................................6.13
Company Intellectual Property...........................3.14(a)
Company Leases..........................................3.17(a)
Company Legal Proceeding................................3.10
Company Lock-Up Agreement...............................Recitals
Company Material Adverse Effect.........................3.01
Company Material Contract...............................3.12(b)
Company Option..........................................2.04(a)
Company Permits.........................................3.07(a)
Company Plans...........................................3.11(a)
Company Preferred Stock.................................3.04(a)
Company Scheduled IP....................................3.15(b)
Company Series A Preferred Stock........................3.04(a)
Company Series B Preferred Stock........................3.04(a)
Company Series C Preferred Stock........................3.04(a)
Company Series D Preferred Stock........................3.04(a)
Company Series E Preferred Stock........................3.04(a)
Company Shares..........................................2.01(a)(i)
Company Shareholder Approval............................3.16
Company Shareholders' Meeting...........................6.01(a)
Company Software........................................3.14(j)
Company Source Code.....................................3.14(c)
Company Stock Plan......................................3.04(b)
Company Stock...........................................3.04(a)
Company Subsidiary......................................3.03(a)
Company Superior Proposal...............................6.05(c)
Company Tax Returns.....................................3.15(a)
Company Voting Agreement................................Recitals
Company Warrant.........................................Recitals
Confidentiality Agreement...............................6.04(b)
Cooley Godward..........................................6.09(b)
DGCL....................................................4.05(b)


A-67



Dissenting Shares.......................................2.05(a)
Effective Time..........................................1.02
Employment Agreement....................................Recitals
Environmental Laws......................................3.13(e)
Environmental Permits...................................3.13(e)
ERISA Affiliate.........................................3.11(e)
ERISA...................................................3.11(a)
Exchange Act............................................4.08(a)
Exchange Agent..........................................2.02(a)
Exchange Fund...........................................2.02(a)
Exchange Ratio..........................................2.01(a)(i)
Existing Policy.........................................6.12(b)
Final Conversion Schedule...............................6.15
FMLA....................................................3.11(e)
Governmental Entity.....................................3.06(b)
Gunderson Dettmer.......................................1.02
Hazardous Materials.....................................3.13(e)
Incentive Stock Option..................................3.04(b)
Indemnified Persons.....................................6.12(a)
Infringement............................................3.14(a)
Intellectual Property...................................3.14(a)
Interim Financial Statements............................3.08(a)
Inventions..............................................3.14(a)
IP Rights...............................................3.14(a)
Joint Proxy Statement...................................6.01(a)
Law.....................................................3.06(a)
Legal Proceeding........................................6.04(d)
Letter of Transmittal...................................2.02(b)
Liabilities.............................................3.08(b)
Liens...................................................3.17(c)
Marks...................................................3.14(a)
Merger Sub..............................................Preamble
Merger..................................................Recitals
Multi-employer Plan.....................................3.11(c)
Multiple Employer Plan..................................3.11(c)
NASD Rule...............................................4.17
Note Conversion.........................................Recitals
Notes...................................................Recitals
Note Amendment Agreement................................Recitals
Notice of Company Superior Proposal.....................6.01(c)
Notice of Parent Superior Proposal......................6.01(e)
Order...................................................7.01(c)
Parent..................................................Preamble
Parent Acquisition Transaction..........................6.06(b)
Parent Assets...........................................4.18(b)
Parent Balance Sheet....................................4.08(b)
Parent Board Recommendation.............................6.01(d)
Parent Common Stock.....................................Recitals
Parent Confidential Information.........................4.15(f)
Parent Charter Amendment................................4.17
Parent Disclosure Schedule..............................Article IV
Parent Financial Advisor................................4.27
Parent Financial Statements.............................4.08(b)
Parent Intellectual Property............................4.15(a)
Parent Leases...........................................4.18(a)
Parent Legal Proceeding.................................4.11


A-68



Parent Material Adverse Effect..........................4.01
Parent Material Contract................................4.13(b)
Parent Permits..........................................4.07
Parent Plans............................................4.12(a)
Parent Purchase Plan....................................4.04(b)
Parent Scheduled IP.....................................4.15(b)
Parent SEC Reports......................................4.08(a)
Parent Shares...........................................2.01(a)(i)
Parent Software.........................................4.15(j)
Parent Source Code......................................4.15(c)
Parent Stock Plans......................................4.04(b)
Parent Stockholders' Meeting ...........................6.01(a)
Parent Stockholder Approval.............................4.17
Parent Superior Proposal................................6.06(c)
Parent Subsidiary.......................................4.03(a)
Parent Tax Returns......................................4.16(a)
Parent Voting Agreement.................................Recitals
Pre-Closing Period......................................5.01
Prime Rate..............................................8.06
Registration Statement..................................6.01(a)
Representatives.........................................6.04(a)
Requesting Party........................................8.05(f)
Rights Agreement........................................4.29
S-3 Amendment...........................................6.01(a)
SEC.....................................................4.08(a)
Section 16 Information..................................6.13
Securities Act..........................................2.02(h)
Senior Convertible Notes................................Recitals
Share Issuance..........................................Recitals
Software................................................3.14(j)
Surviving Corporation...................................1.01
Tax Authority...........................................3.15(c)
Tax.....................................................3.15(c)
Taxable.................................................3.15(c)
Terminating Company Breach..............................8.01(f)
Termination Date........................................8.01(b)
Terminating Parent Breach...............................8.01(g)
U.S. GAAP...............................................3.08(a)
Use.....................................................3.14(c)
WARN Act................................................6.14`

SECTION 9.04 Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.

SECTION 9.05 Assignment; Binding Effect; Benefit. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties, and any
purported assignment (whether by operation of Law or otherwise) in violation of
this Section 9.05 shall be null and void. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Except for the
provisions of Sections 6.12 and  6.13, notwithstanding anything

A-69

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SECTION 9.06 Incorporation of Schedules and Exhibits. The
Company Disclosure Schedule, the Parent Disclosure Schedule, the Schedules and
all Exhibits attached hereto and referred to herein are hereby incorporated
herein and made a part hereof for all purposes as if fully set forth
herein.

SECTION 9.07 Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof in
addition to any other remedy at law or in equity.

SECTION 9.08 Governing Law; Forum. Except for the
mandatorily applicable provisions of the CGCL, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that state and
without regard to any applicable conflicts of law. In any action between the
parties hereto arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement: (i) each of the parties irrevocably
and unconditionally consents and submits to the exclusive jurisdiction and venue
of either the state courts located in Santa Clara County, California or the
United States District Court for the Northern District of California and (ii)
each of the parties irrevocably consents to service of process by first class
certified mail, return receipt requested, postage prepaid.

SECTION 9.09 Time of the Essence. For purposes of this
Agreement and the transactions contemplated by this Agreement, time is of the
essence.

SECTION 9.10 Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives any and all right to trial by jury in any Legal
Proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Each party shall pay its own legal fees and expenses
incurred in any such action or suit.

SECTION 9.11 Construction.

1. For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
2. The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.
3. As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
4. Except as otherwise indicated, all references in this
Agreement to "Articles," "Sections," "Schedules" and "Exhibits" are intended to
refer to an Article or Section of, or Schedule or Exhibit to, this
Agreement.
5. Except as otherwise indicated, all references (i) to any
agreement (including this Agreement), contract or Law are to such agreement,
contract or Law as amended, modified, supplemented or replaced from time to
time, and (ii) to any Governmental Entity include any successor to that
Governmental Entity.

SECTION 9.12 Further Assurances. Each party hereto shall
execute and cause to be delivered to each other party hereto such instruments
and other documents, and shall take such other actions, as such other party may
reasonably request (prior to, at or after the Closing) for the purpose of
carrying out or evidencing any of the transactions contemplated by this
Agreement.

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SECTION 9.13 Headings. The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.

SECTION 9.14 Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in two or more counterparts,
each of which when executed and delivered shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.

SECTION 9.15 Entire
Agreement. This Agreement (including the Exhibits, the Schedules,
the Company Disclosure Schedule and the Parent Disclosure Schedule) and the Non-
Disclosure Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.

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IN WITNESS WHEREOF, each of Parent, Merger Sub and the Company has executed
or has caused this Agreement to be executed by its respective officers thereunto
duly authorized as of the date first written above.

ACTIONPOINT, INC.

By:	/s/ Stephen S. Francis
Name: Stephen S. Francis
Title: President and Chief Executive Officer

MERGER SUB

By:	/s/ Stephen S. Francis
Name: Stephen S. Francis
Title: President and Chief Executive Officer



CAPTIVA SOFTWARE CORPORATION

By:	/s/ Reynolds C. Bish
Name: Reynolds C. Bish
Title: President and Chief Executive Officer

A-72

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EXHIBIT A

Form of Company Voting Agreement

(see Annex F)

A-73

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EXHIBIT B

Form of Parent Voting Agreement

(see Annex E)

A-74

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EXHIBIT C

AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

CONDOR MERGER CORP.

The undersigned incorporator, for the purpose of forming
a corporation under the California Corporations Code of the State of California,
hereby certifies:

ONE: The name of this corporation is Condor Merger Corp.

TWO: The purpose of this corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated by
the California Corporations Code.

THREE: The name and complete business address in this state
of this corporation's initial agent for service of process is:

Bill Spence, Esq.

ActionPoint, Incorporated

1299 Parkmoor Avenue

San Jose, CA 95126

FOUR: This corporation is authorized to issue one (1) class
of stock to be designated "Common Stock." The total number of shares which this
corporation is authorized to issue is Ten Thousand (10,000) shares of Common
Stock, par value $0.001 per share.

FIVE: Section 1. The liability of the directors of this
corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law.

Section 2. This corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California
Corporations Code) through bylaw provisions, agreements with the agents, vote of
shareholders or disinterested directors, or otherwise in excess of the
indemnification otherwise permitted by Section 317 of the California
Corporations Code, subject only to applicable limits set forth in Section 204 of
the California Corporations Code with respect to actions for breach of duty to
the corporation and its shareholders.

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Exhibit D

Amended and Restated Articles of Incorporation of the
Company

(see Annex K)

A-76

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EXHIBIT E

Form of Company Affiliate Agreement

(see Annex G)

A-77

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EXHIBIT F

Form of Company Lock-Up Agreement



(see Annex H)

A-78

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Schedule 1

Individuals Entering Into Employment Agreements

Reynolds C. Bish

Rick Russo

A-79

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Schedule 1.06(a)

Members of the Board of Directors of Parent at the Effective
Time

Jim Berglund

Reynolds C. Bish

Patrick Edsell

Stephen Francis

Kimra D. Hawley

Mel S. Lavitt

Bruce Silver

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Schedule 7.02(e)

Persons Entering Into Affiliate Agreements



|C.E. Unterberg, Towbin, LLC                                                                               
|----------------------------------------------------------------------------------------------------------
|C.E. Unterberg Towbin Capital Partners I, L.P.                                                            
|UT Technology Fund Ltd.                                                                                   
|UT Technology Partners I, L.P.                                                                            
|UT Technology Partners II, L.P.                                                                           
|UT Technology Partners LDC                                                                                
|UT Technology Partners LDS                                                                                
|UT Technology Partners LLC                                                                                
|Enterprise Partners III, L.P.                                                                             
|Enterprise Partners III Associates, L.P.                                                                  
|Novus Ventures, L.P.                                                                                      
|Bish, Reynolds C. & Patricia M. Norman, Trustees of the
Reynolds C. Bish Family Living Trust dated 3/28/90
|Reynolds C. Bish                                                                                          
|Steven D. Burton                                                                                          
|Rick Russo                                                                                                
|Blaine J. Owens                                                                                           
|Randall A. Stern                                                                                          
|Baird W. Brueseke                                                                                         
|James L. Haley                                                                                            
|Jim Berglund                                                                                              
|Shirley Cerrudo                                                                                           
|John E. Jones                                                                                             
|Mel S. Lavitt                                                                                             
|Jordan M. Libit                                                                                           
|Edward H. Pendergast                                                                                      
|Nissho Electronics Corporation                                                                            
|J.F. Shea & Co., Inc.                                                                                     

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AMENDMENT NO. 1 TO AGREEMENT AND PLAN

OF MERGER AND REORGANIZATION



This Amendment No. 1 to the Agreement and Plan of Merger and
Reorganization, dated as of March 4, 2002, among the parties hereto (this
"Amendment") is made as of April 26, 2002, among ActionPoint Inc., a
Delaware corporation ("Parent"), Condor Merger Corp., a California
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and
Captiva Software Corporation, a California corporation (the
"Company").

RECITALS

Whereas, Parent, Merger Sub and Company entered into that certain
Agreement and Plan of Merger and Reorganization, dated as of March 4, 2002 (the
"MergerAgreement"); and

Whereas, Parent, Merger Sub and the Company desire to extend the
Termination Date, as defined in the Merger Agreement, from May 31, 2002 to July
31, 2002.

AGREEMENT

Now, Therefore, in consideration of the mutual promises hereinafter set
forth, the parties hereto hereby agree that Section 8.01(b) of the Merger
Agreement is amended to replace the reference therein to "May 31, 2002" with
"July 31, 2002."

Except as modified by this Amendment, the Merger Agreement
shall remain in full force and effect without any modification. By executing
this Amendment below, Parent, Merger Sub and the Company certify that this
Amendment has been executed and delivered in compliance with the terms of
Section 9.15 of the Merger Agreement. This Amendment shall be deemed an
amendment to the Merger Agreement and shall be irrevocable.

Except as and to the extent expressly modified by this
Amendment, the Merger Agreement and the exhibits thereto, shall remain in full
force and effect in all respects. In the event of a conflict or inconsistency
between this Amendment and the Merger Agreement and the exhibits thereto, the
provisions of this Amendment shall govern.

This Amendment may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.

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IN WITNESS WHEREOF, each of Parent, Merger Sub and the
Company has executed or has caused this Amendment to be executed by its
respective officers thereunto duly authorized as of the date first written
above.

ACTIONPOINT, INC.

By:	/s/ Stephen S. Francis
Name: Stephen S. Francis
Title: President and Chief Executive Officer

MERGER SUB

By:	/s/ Stephen S. Francis
Name: Stephen S. Francis
Title: President and Chief Executive Officer



CAPTIVA SOFTWARE CORPORATION

By:	/s/ Reynolds C. Bish
Name: Reynolds C. Bish
Title: President and Chief Executive Officer

A-83

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ANNEX B

OPINION OF ACTIONPOINT'S FINANCIAL ADVISOR



March 4, 2002





Board of Directors of ActionPoint, Inc.,
                   Including the Special Committee
                   1299 Parkmoor Avenue
                   San Jose, California 95126

Members of the Board and the Special Committee:

You have requested our opinion as to the fairness, from a
financial point of view, to the holders of the common stock of ActionPoint, Inc.
("ActionPoint"), par value $0.01 per share ("ActionPoint Common Stock"), of the
Exchange Ratio (as defined below) in connection with the Merger (as defined
below) contemplated by the Agreement and Plan of Merger and Reorganization (the
"Agreement") to be entered into by and among ActionPoint, Captiva Software
Corporation ("Captiva"), and Condor Acquisition Corp., a wholly-owned subsidiary
of ActionPoint ("Merger Sub").

As more fully described in the Agreement, Merger Sub will
merge with and into Captiva (the "Merger") and each outstanding share of common
stock of Captiva, no par value ("Captiva Common Stock") will be converted into
the right to receive shares of ActionPoint Common Stock pursuant to the Exchange
Ratio, as defined in Section 2.01 of the Agreement.

In connection with rendering our opinion, we have, among
other things, reviewed a February 27, 2002 draft of the Agreement in the form
provided to us and held discussions with certain senior executives of
ActionPoint and Captiva concerning the business, operations, and prospects of
ActionPoint and Captiva. We examined certain publicly available business and
financial information relating to ActionPoint and Captiva and the industries in
which they operate, certain financial forecasts and information relating to
certain strategic implications and operational benefits anticipated to result
from the Merger, as well as other information and data regarding ActionPoint and
Captiva which were provided to or otherwise discussed with us by the management
of ActionPoint and Captiva. We reviewed the financial terms of the Merger as set
forth in the Agreement provided to us, in relation to, among other things,
current and historical market prices and trading volumes of ActionPoint Common
Stock, historical and projected earnings and other operating data of ActionPoint
and Captiva; and the historical and projected capitalization and financial
condition of ActionPoint and Captiva. We analyzed certain financial, stock
market, economic, and other publicly available information relating to the
businesses of other companies whose operations we considered relevant in
evaluating those of ActionPoint and Captiva. In addition to the foregoing, we
conducted
such other analyses and examinations and considered such
other information and financial, economic and market criteria as we deemed
appropriate in arriving at our opinion.

In our review and analysis and in arriving at our opinion, we
have assumed and relied upon, without assuming any responsibility for
independent verification, the accuracy and completeness of all of the financial
and other information and data publicly available or furnished to, discussed
with, or otherwise reviewed by or for us. With respect to financial forecasts
and information relating to certain strategic implications and operational
benefits anticipated to result from the Merger provided to us or otherwise
reviewed by or discussed with us regarding ActionPoint and Captiva, we have been
advised by the management of ActionPoint and Captiva that such forecasts or
other information were reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the management of ActionPoint and
Captiva, as the case may be. We have assumed that the Merger will be treated as
a tax-free reorganization for United States federal income tax purposes. We have
not made or been provided with an independent evaluation or appraisal of the
assets or liabilities (contingent or otherwise) of ActionPoint or Captiva, nor
have we made any physical inspection of the properties or assets of ActionPoint
or Captiva. You have advised us, and we have assumed, that the final terms of
the Agreement will not vary materially from those set forth in the draft
provided to us.

Our opinion, as set forth herein, relates to the relative
values of ActionPoint and Captiva and does not imply any conclusion as to the
likely trading range for ActionPoint Common Stock following the announcement or
consummation of the Merger. We were not requested to consider, and our opinion
does not address, the relative merits of the Merger as compared to any
alternative business strategies that might exist for ActionPoint or the effect
of any other transaction in which ActionPoint might engage. Our opinion
necessarily is based upon information available to us and financial, stock
market, economic and other conditions and circumstances disclosed to us as they
exist and can be evaluated as of the date hereof, and we assume no
responsibility to update or revise our opinion based upon circumstances or
events occurring after the date hereof.

As you know, Pacific Crest Securities Inc. is acting as
financial advisor to ActionPoint in connection with the Merger and will receive
a fee for our services, a portion of which is payable only upon the consummation
of the Merger. We have in the past provided investment banking services to
ActionPoint unrelated to the Merger, for which we have received compensation. In
the ordinary course of our business, we may actively trade or hold the equity
securities of ActionPoint for our own account or for the accounts of our
customers and, accordingly, may at any time hold a long or short position in
such securities.

The opinion expressed herein is provided for the information
of the Board of Directors of ActionPoint, including the Special Committee, in
its evaluation of the Merger, and our opinion is not intended to be and does not
constitute a recommendation of the Merger to ActionPoint or its stockholders,
nor does it constitute a recommendation to any stockholder as to how such
stockholder should vote on any matter relating to the Merger. Our opinion and
any other materials provided in connection with the opinion may not be published
or otherwise used or referred to, nor shall any public reference to Pacific
Crest Securities Inc. without our prior written consent.

Based upon and subject to the foregoing, and based upon such
other matters as we consider relevant, we are of the opinion that, as of the
date hereof, the Exchange Ratio is fair, from a financial point of view, to the
holders of ActionPoint Common Stock.



PACIFIC CREST SECURITIES INC.

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ANNEX C







March 4, 2002





The Board of Directors
                   Captiva Software Corporation

Gentlemen:

We understand that Captiva Software Corporation (the
"Company"), a privately-held company, is negotiating a merger agreement with
ActionPoint, Inc. ("ActionPoint"), a publicly traded company, whereby a wholly
owned subsidiary of ActionPoint will be merged with and into the Company (the
"Merger") with the shareholders of the Company receiving, in the aggregate, one
share of common stock less than the total number of shares of common stock of
ActionPoint outstanding immediately before the Merger in exchange for their
equity interests in the Company. We also understand that the Company currently
has approximately $8.088 million face value of subordinated debt (the "Sub
Debt") outstanding. We further understand that as a condition of the Merger,
immediately prior to the closing of the Merger, the Company's preferred stock
and the Sub Debt will be converted into Company common stock at a discount to
face value. We understand that the Sub Debt, if fully converted, would convert
into 80 percent of the Company's fully diluted equity immediately before the
Merger (excluding any options issued under the Company's 2002 Equity Incentive
Plan), and as a consequence the holders of the Company's currently outstanding
common stock and preferred stock (collectively, the "Existing Pre-Transaction
Stockholders") would own 20 percent of the Company's fully diluted equity
immediately before the Merger. We also understand that the Sub Debt will convert
at a fixed rate, so that if less than all of the Sub Debt is converted, there
would be a pro rata reduction in ownership of the Company's equity by the
holders of the converting Sub Debt after the conversion. The conversion of the
Sub Debt into common stock (but not the Merger) is referred to herein as the
"Conversion Transaction." We further understand that in the absence of the
Merger, the Company may be required to raise additional capital to fund its
operations or to liquidate.

The Board of Directors of the Company has formed a special
committee (the "Committee") to consider certain matters relating to the
Conversion Transaction. The Committee requested that Houlihan Lokey render an
opinion (the "Opinion") as to the fairness, from a financial point of view, of
the Conversion Transaction to the Existing Pre-Transaction Stockholders
(excluding holders of Sub Debt), taken as a whole.



In connection with rendering the Opinion, we made such
reviews, analyses and inquiries, as we have deemed necessary and appropriate
under the circumstances. Among other things, we:

1. reviewed the Company's audited consolidated financial
statements for the three fiscal years ended December 31, 1998, 1999, 2000, and
Company-prepared interim financial statements for the nine-month periods ended
September 30, 2000 and September 30, 2001, which the Company's management has
identified as being the most current financial statements available;
2. reviewed copies of the following
presentations:
3. Captiva Software Corporation: 2002 Strategic Planning Overview / Update,
dated October 25, 2001;
4. Captiva Software Corporation: Merging ActionPoint & Captiva, dated
December 4, 2001;
5. reviewed a draft copy of the Note Conversion
Agreement;
6. reviewed copies of the Amended and Restated Loan and
Security Agreement by and between Imperial Bank and Captiva Software
Corporation, entered into as of June 27, 2001;
7. reviewed copies of the Intellectual Property Security
Agreement by and between Imperial Bank and Captiva Software Corporation, entered
into as of June 27, 2001;
8. reviewed copies of the Software Source Code Escrow
Agreement among SourceFile LLC, Captiva Software Corporation, and Imperial Bank;
9. reviewed a draft copy of the Warrant to Purchase Stock,
issued to Imperial Bank on June 27, 2001;
10. reviewed a copy of the Amended and Restated Articles of
Incorporation of Captiva Software Corporation, executed on July 20, 2000;
11. reviewed a copy of the Amended and Restated Investors'
Rights Agreement, dated as of August 1, 2000;
12. reviewed a draft copy of the Amended and Restated Senior
Subordinated Secured Promissory Note, dated August 2000;
13. reviewed a draft copy of the Senior Subordinated Secured
Convertible Promissory Note, dated August 2000;
14. reviewed a copy of the Security Agreement, dated August
1, 2000;
15. reviewed a copy of the Note and Preferred Stock Purchase
Agreement, dated August 1, 2000;
16. reviewed a copy of the Captiva Software Corporation:
Summary Capitalization Table, dated December 31, 2001;
17. met with certain members of the senior management of the
Company to discuss the operations, financial condition, future prospects and
projected operations and performance of the Company;
18. met with certain members of the senior management of
ActionPoint to discuss the operations, financial condition, future prospects and
projected operations and performance of ActionPoint;
19. reviewed forecasts and projections prepared by the
Company's management with respect to the Company for the years ended December
31, 2001 through 2004;
20. reviewed the historical market prices and trading volume
for ActionPoint's publicly traded securities;
21. reviewed certain other publicly available financial data
for certain companies that we deem comparable to the Company;
22. reviewed drafts of certain documents related to the
proposed Merger, including:
23. draft Agreement and Plan of Merger and Reorganization among Parent, Merger
Sub and Company, dated January 2002;
24. draft copy of the Company Disclosure Schedule to Agreement and Plan of
Merger and Reorganization among Parent, Merger Sub and Company, dated 2002;
25. draft copy of the Summary of Principal Terms of the Proposed Merger, dated
December 5, 2001;
26. draft copy of the Executive Summary of Material Terms of the Merger
Agreement related to the Merger of Captiva and ActionPoint, dated January 28,
2002; and
27. conducted such other studies, analyses and inquiries, as
we have deemed appropriate.

We relied upon and assumed, without independent verification,
that the financial forecasts and projections provided to us were reasonably
prepared and reflected the best available estimates of the future financial
results and condition of the Company as of January 30, 2002, that there has been
no material change in the assets, financial condition, business or prospects of
the Company since the date of the financial statements made available to us, and
that there will be no material change in the terms of the Conversion Transaction
or Merger from those presented to us on or prior to January 30, 2002.

We did not independently verify the accuracy and completeness
of the information supplied to us with respect to the Company or ActionPoint and
do not assume any responsibility with respect to such information. We did not
made any physical inspection or independent appraisal of any of the properties,
assets, or liabilities of the Company, nor were we furnished with any such
appraisals. We assumed the validity and enforceability of all documents
(including, in the absence of executed documents, draft documents) provided to
us, including without limitation all of the Sub-Debt documents. Our opinion was
necessarily based on business, economic, market and other conditions as they
existed and could be evaluated by us as of January 30, 2002, the date we
verbally advised the Committee. Furthermore as of January 30, 2002, only draft
transaction documents were available for our review, and any subsequent changes
to the documents may materially impact the verbal opinion rendered on January
30, 2002. We assume no responsibility for updating or revising our verbal
opinion based on circumstances or events occurring after January 30, 2002.

The Opinion did not address: (i) the Company's underlying
business decision to effect the Conversion Transaction or Merger, (ii) the
fairness of the conversion of the Company's preferred shares into Company common
shares, or (iii) any aspect of the Merger including without limitation the
fairness of the Merger or the Merger consideration to be received by the Company
or its shareholders or subordinated debt holders. We have not been requested to,
and did not, solicit third party indications of interest in acquiring all or any
part of the Company. Furthermore, at your request, we have not negotiated the
terms of the Conversion Transaction or Merger or advised you with respect to
such terms or any alternatives to the Conversion Transaction or Merger. Although
we did not opine as to any aspect of the Merger, for purposes of rendering the
Opinion we assumed that the Merger will be consummated immediately after the
Conversion Transaction on terms substantially similar to those described to us,
and that as a consequence the holders of Sub Debt will have a non-controlling
minority shareholder interest immediately after the Conversion Transaction.

This letter confirms that on January 30, 2002, based upon the
foregoing, and in reliance thereon, we verbally advised the Committee that it is
our opinion that as of said date, the Conversion Transaction is fair, from a
financial point of view, to the Existing Pre-Transaction Stockholders (excluding
holders of Sub Debt), taken as a whole.

The Opinion was furnished solely for your use and benefit and may not
be quoted or referred to, in whole or in part, in any registration statement, prospectus
or proxy statement, or in any other document used in connection with the offering
or sale of securities, nor shall this letter be used in any other purpose, without
our  prior written consent.

/s/ HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS,
INC.



21874/13087

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ANNEX D

CALIFORNIA GENERAL CORPORATION LAW CHAPTER 13

DISSENTERS' RIGHTS

SECTION 1300. Right to Require Purchase -- "Dissenting
Shares" and "Dissenting Shareholder" Defined.

If the approval of the outstanding shares (Section 152)
of a corporation is required for a reorganization under subdivisions (a) and (b)
or subdivision (e) of Section 1201, each shareholder of the corporation entitled
to vote on the transaction and each shareholder of a subsidiary corporation in a
short-form merger may, by complying with this chapter, require the corporation
in which the shareholder holds shares to purchase for cash at their fair market
value the shares owned by the shareholder which are dissenting shares as defined
in subdivision (b). The fair market value shall be determined as of the day
before the first announcement of the terms of the proposed reorganization or
short-form merger, excluding any appreciation or depreciation in consequence of
the proposed action, but adjusted for any stock split, reverse stock split or
share dividend which becomes effective thereafter.

As used in this chapter, "dissenting shares" means shares
which come within all of the following descriptions:

Which were not immediately prior to the reorganization or
short-form merger either (A) listed on any national securities exchange
certified by the Commissioner of Corporations under subdivision (o) of Section
25100 or (B) listed on the list of OTC margin stock issued by the Board of
Governors of the Federal Reserve System, and the notice of meeting of
stockholders to act upon the reorganization summarizes this section and Sections
1301, 302, 1303 and 1304; provided, however, that this provision does not apply
to any shares with respect to which there exists any restriction on transfer
imposed by the corporation or by any law or regulation; and provided, further,
that this provision does not apply to any class of shares described in
subparagraph (A) or (B) if demands for payment are filed with respect to 5
percent or more of the outstanding shares of that class.

Which were outstanding on the date for the determination of
stockholders entitled to vote on the reorganization and (A) were not voted in
favor of the reorganization or, (B) if described in subparagraph (A) or (B) of
paragraph (1) (without regard to the provisos in that paragraph), were voted
against the reorganization, or which were held of record on the effective date
of a short-form merger; provided, however, that subparagraph (A) rather than
subparagraph (B) of this paragraph applies in any case where the approval
required by Section 1201 is sought by written consent rather than at a
meeting.

Which the dissenting shareholder has demanded that the
corporation purchase at their fair market value, in accordance with Section
1301.

Which the dissenting shareholder has submitted for
endorsement, in accordance with Section 1302.

As used in this chapter, "dissenting shareholder" means the
recordholder of dissenting shares and includes a transferee of record. Leg.H.
1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1982 ch. 36, effective
February 17, 1982, 1990 ch. 1018, 1993 ch. 543.

SECTION 1301. Demand for Purchase.

If, in the case of a reorganization, any shareholders of
a corporation have a right under Section 1300, subject to compliance with
paragraphs (3) and (4) of subdivision (b) thereof, to require the corporation to
purchase their shares for cash, such corporation shall mail to each such
shareholder a notice of the approval of the reorganization by its outstanding
shares (Section 152) within 10 days after the date of such approval, accompanied
by a copy of Sections 1300, 1302, 1303, 1304 and this section, a statement of
the price determined by the corporation to represent the fair market value of
the dissenting shares, and a brief description of the procedure to be followed
if the shareholder desires to exercise the shareholder's right under such
sections. The statement of price constitutes an offer by the corporation to
purchase at the price stated any dissenting shares as defined in subdivision (b)
of Section 1300, unless they lose their status as dissenting shares under
Section 1309.

Any shareholder who has a right to require the corporation to
purchase the shareholder's shares for cash under Section 1300, subject to
compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who
desires the corporation to purchase such shares, shall make written demand upon
the corporation for the purchase of such shares and payment to the shareholder
in cash of their fair market value. The demand is not effective for any purpose
unless it is received by the corporation or any transfer agent thereof (1) in
the case of shares described in clause (i) or (ii) of paragraph (1) of
subdivision (b) of Section 1300 (without regard to the provisos in that
paragraph), not later than the date of the shareholders' meeting to vote upon
the reorganization, or (2) in any other case within 30 days after the date on
which the notice of the approval by the outstanding shares pursuant to
subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder.

The demand shall state the number and class of the shares
held of record by the shareholder which the shareholder demands that the
corporation purchase and shall contain a statement of what such shareholder
claims to be the fair market value of those shares as of the day before the
announcement of the proposed reorganization or short-form merger. The statement
of fair market value constitutes an offer by the shareholder to sell the shares
at such price. Leg.H. 1975 ch. 682, 1976 ch. 641, effective January 1, 1977,
1980 chs. 501, 1155.

SECTION 1302. Endorsement of Shares.

Within 30 days after the date on which notice of the
approval by the outstanding shares or the notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder, the shareholder shall submit to the
corporation at its principal office or at the office of any transfer agent
thereof, (a) if the shares are certificated securities, the shareholder's
certificates representing any shares which the shareholder demands that the
corporation purchase, to be stamped or endorsed with a statement that the shares
are dissenting shares or to be exchanged for certificates of appropriate
denomination so stamped or endorsed or (b) if the shares are uncertificated
securities, written notice of the number of shares which the shareholder demands
that the corporation purchase. Upon subsequent transfers of the dissenting
shares on the books of the corporation, the new certificates, initial
transaction statement, and other written statements issued therefor shall bear a
like statement, together with the name of the original dissenting holder of the
shares. leg.H. 1975 ch. 682, effective January 1, 1977, 1986 ch. 766.

SECTION 1303. Agreed Price -- Time for Payment.

If the corporation and the shareholder agree that the shares
are dissenting shares and agree upon the price of the shares, the dissenting
shareholder is entitled to the agreed price with interest thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the fair
market value of any dissenting shares as between the corporation and the holders
thereof shall be filed with the secretary of the corporation.

Subject to the provisions of Section 1306, payment of the
fair market value of dissenting shares shall be made within 30 days after the
amount thereof has been agreed or within 30 days after any statutory or
contractual conditions to the reorganization are satisfied, whichever is later,
and in the case of certificated securities, subject to surrender of the
certificates therefor, unless provided otherwise by agreement. Leg.H. 1975 ch.
682, effective January 1, 1977, 1980 ch. 501, 1986 ch. 766.

SECTION 1304. Dissenter's Action to Enforce Payment.

If the corporation denies that the shares are dissenting
shares, or the corporation and the shareholder fail to agree upon the fair
market value of the shares, then the shareholder demanding purchase of such
shares as dissenting shares or any interested corporation, within six months
after the date on which notice of the approval by the outstanding shares
(Section 152) or notice pursuant to subdivision (i) of Section 1110 was mailed
to the shareholder, but not thereafter, may file a complaint in the superior
court of the proper county praying the court to determine whether the shares are
dissenting shares or the fair market value of the dissenting shares or both or
may intervene in any action pending on such a complaint.

Two or more dissenting shareholders may join as plaintiffs or
be joined as defendants in any such action and two or more such actions may be
consolidated.

On the trial of the action, the court shall determine the
issues. If the status o the shares as dissenting shares is in issue, the court
shall first determine that issue. If the fair market value of the dissenting
shares is in issue, the court shall determine, or shall appoint one or more
impartial appraisers to determine, the fair market value of the shares. Leg.H.
1975 ch. 682, effective January 1, 1977.

SECTION 1305. Appraisers' Report -- Payment Costs.

If the court appoints an appraiser or appraisers, they shall
proceed forthwith to determine the fair market value per share. Within the time
fixed by the court, the appraisers, or a majority of them, shall make and file a
report in the office of the clerk of the court. Thereupon, on the motion of any
party, the report shall be submitted to the court and considered on such
evidence as the court considers relevant. If the court finds the report
reasonable, the court may confirm it.

If a majority of the appraisers appointed fail to make and
file a report within 10 days from the date of their appointment or within such
further time as may be allowed by the court or the report is not confirmed by
the court, the court shall determine the fair market value of the dissenting
shares.

Subject to the provisions of Section 1306, judgment shall be
rendered against the corporation for payment of an amount equal to the fair
market value of each dissenting share multiplied by the number of dissenting
shares which any dissenting shareholder who is a party, or who has intervened,
is entitled to require the corporation to purchase, with interest thereon at the
legal rate from the date on which judgment was entered.

Any such judgment shall be payable forthwith with respect to
uncertificated securities and, with respect to certificated securities, only
upon the endorsement and delivery to the corporation of the certificates for the
shares described in the judgment. Any party may appeal from the judgment.

The costs of the action, including reasonable compensation to
the appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable, but, if the appraisal exceeds the price offered by
the corporation, the corporation shall pay the costs (including in the
discretion of the court attorneys' fees, fees of expert witnesses and interest
at the legal rate on judgments from the date of compliance with Sections 1300,
1301 and 1302 if the value awarded by the court for the shares is more than 125
percent of the price offered by the corporation under subdivision (a) of Section
1301). Leg.H. 1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1977 ch.
235, 1986 ch. 766.

SECTION 1306. Dissenting Shareholder's Status as
Creditor.

To the extent that the provisions of Chapter 5 prevent the
payment to any holders of dissenting shares of their fair market value, they
shall become creditors of the corporation for the amount thereof together with
interest at the legal rate on judgments until the date of payment, but
subordinate to all other creditors in any liquidation proceeding, such debt to
be payable when permissible under the provisions of Chapter 5. Leg.H. 1975 ch.
682, effective January 1, 1977.

SECTION 1307. Dividends Paid as Credit Against
Payment.

Cash dividends declared and paid by the corporation upon the
dissenting shares after the date of approval of the reorganization by the
outstanding shares (Section 152) and prior to payment for the shares by the
corporation shall be credited against the total amount to be paid by the
corporation therefor. Leg.H. 1975 ch. 682, effective January 1, 1977.

SECTION 1308. Continuing Rights and Privileges of
Dissenting Shareholders.

Except as expressly limited in this chapter, holders of
dissenting shares continue to have all the rights and privileges incident to
their shares, until the fair market value of their shares is agreed upon or
determined. A dissenting shareholder may not withdraw a demand for payment
unless the corporation consents thereto. Leg.H. 1975 ch. 682, effective January
1, 1977.

SECTION 1309. Termination of Dissenting Shareholder
Status.

Dissenting shares lose their status as dissenting shares and
the holders thereof cease to be dissenting shareholders and cease to be entitled
to require the corporation to purchase their shares upon the happening of any of
the following:

The corporation abandons the reorganization. Upon abandonment
of the reorganization, the corporation shall pay on demand to any dissenting
shareholder who has initiated proceedings in good faith under this chapter all
necessary expenses incurred in such proceedings and reasonable attorneys' fees.

The shares are transferred prior to their submission for
endorsement in accordance with Section 1302 or are surrendered for conversion
into shares of another class in accordance with the articles.

The dissenting shareholder and the corporation do not agree
upon the status of the shares as dissenting shares or upon the purchase price of
the share, and neither files a complaint or intervenes in a pending action as
provided in Section 1304, within six months alter the date on which notice of
the approval by the outstanding shares or notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder.

The dissenting shareholder, with the consent of the
corporation, withdraws the shareholder's demand for purchase of the dissenting
shares. Leg.H 1975 ch. 682, effective January 1, 1977.

SECTION 1310. Suspension of Proceedings for Payment
Pending Litigation.

If litigation is instituted to test the sufficiency or
regularity of the votes of the shareholders in authorizing a reorganization, any
proceedings under Section 1304 and 1305 shall be suspended until final
determination of such litigation. Leg.H. 1975 ch. 682, effective January 1,
1977.

SECTION 1311. Exempt Shares.

This chapter, except Section 1312, does not apply to classes
of shares whose terms and provisions specifically set forth the amount to be
paid in respect to such shares in the event of a reorganization or merger.
Leg.H. 1975 ch. 682, effective January 1, 1917, 1988 ch. 919.

SECTION 1312. Attacking Validity of Reorganization or
Merger.

No shareholder of a corporation who has a right under
this chapter to demand payment of cash for the shares held by the shareholder
shall have any right at law or in equity to attack the validity of the
reorganization or short form merger, or to have the reorganization or short-form
merger set aside or rescinded, except for an action to test whether the number
of shares required to authorize or approve the reorganization have been legally
voted in favor thereof but any holder of shares of a class whose terms and
provisions specifically set forth the amount to be paid in respect to them in
the event of a reorganization or short-form merger is entitled to payment in
accordance with those terms and provisions or, if the principal terms of the
reorganization are approved pursuant to subdivision (b) of Section 1202, is
entitled to payment in accordance with the terms and provisions of the approved
reorganization.

If one of the parties to a reorganization or short-form
merger is directly or indirectly controlled by, or under common control with,
another party to the reorganization or short-form merger, subdivision (a) shall
not apply to a shareholder of such party who has not demanded payment of cash
for such shareholder's shares pursuant to this chapter, but if the shareholder
institutes any action to attack the validity of the reorganization or short-form
merger or to have the reorganization or short-form merger set aside or
rescinded, the shareholder shall not thereafter have any right to demand payment
of cash for the shareholder's shares pursuant to this chapter. The court in any
action attacking the validity of the reorganization or sort-form merger or to
have the reorganization or short-form merger set aside or rescinded shall not
restrain or enjoin the consummation of the transaction except upon 10 days'
prior notice to the corporation and upon a determination by the court that
clearly no other remedy will adequately protect the complaining shareholder or
the class of shareholders of which such shareholder is a member.

If one of the parties to a reorganization or short-form
merger is directly or indirectly controlled by, or under common control with
another party to the reorganization or short-form merger, in any action to
attack the validity of the reorganization or short-form merger or to have the
reorganization or short-form merger set aside or rescinded, (1) a party to a
reorganization or short-form merger which controls another party to the
reorganization or short-form merger shall have the burden of proving that the
transaction is just and reasonable as to shareholders of the controlled party,
and (2) a person who controls two or more parties to a reorganization shall have
the burden of proving that this transaction is just and reasonable as to the
shareholders of any party so controlled. Leg.H. 1975 ch. 682, 1976 ch. 641,
effective January 1, 1977, 1988 ch. 919.



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ANNEX E

FORM OF VOTING AGREEMENT FOR ACTIONPOINT OFFICERS AND
DIRECTORS

THIS VOTING AGREEMENT (this "Agreement") is
entered into dated as of March 4, 2002, by and between Captiva Software
Corporation, a California corporation ("the Company"), and
("Stockholder").

W I T N E S S E T H:

WHEREAS, Company, Condor Merger Corp. a California
corporation and wholly owned subsidiary of Parent ("Merger Sub"), and
ActionPoint, Inc., a Delaware corporation (the "Parent"), propose to
enter into an Agreement and Plan of Merger and Reorganization dated as of the
date hereof (as the same may be amended from time to time, the "Merger
Agreement"; capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to them in the Merger Agreement), which provides,
upon the terms and subject to the conditions thereof, for the merger (the
"Merger") of Merger Sub with and into the Company;

WHEREAS, as of the date hereof, Stockholder owns
beneficially or of record or has the power to vote, or direct the vote of, the
number of shares of  common stock of the Company (the "Parent Common
Stock"), as set forth opposite such Stockholder's name on
Exhibit A hereto (all such Parent Common Stock and options, warrants
or other rights to acquire shares of Parent Common Stock of which ownership of
record or beneficially or the power to vote is hereafter acquired by Stockholder
prior to the termination of this Agreement being referred to herein as the
"Shares"); and

WHEREAS, as a condition to the willingness of the
Company to enter into the Merger Agreement, the Company has requested that
Stockholder agree to enter into this Agreement, and, in order to induce the
Company to enter into the Merger Agreement, Stockholder has agreed to enter into
this Agreement.

NOW, THEREFORE, in consideration of the
premises and of the mutual agreements and covenants set forth herein and in the
Merger Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

ARTICLE I

TRANSFER, VOTING AND CONVERSION OF SHARES

SECTION 1.01 Transfer of Shares. Stockholder shall not, directly
or indirectly, (a) sell, pledge, encumber, assign, transfer or otherwise
dispose of any or all of Stockholder's Shares or any interest in such Shares,
except pursuant to the Merger Agreement or unless the transferee of such Shares
shall agree to hold such Shares subject to the terms of this Agreement by
executing counterpart signature pages hereto and to the Proxy (as defined
below), or (b) deposit any Shares or any interest in such Shares into a
voting trust or enter into a voting agreement or arrangement with respect to any
Shares or grant any proxy with respect thereto (other than as contemplated
herein), or (c) enter into any contract, commitment, option or other
arrangement or undertaking (other than the Merger Agreement) with respect to the
direct or indirect acquisition or sale, assignment, pledge, encumbrance,
transfer or other disposition of any Shares.

SECTION 1.02 Vote in Favor of the Merger. During the period
commencing on the date hereof and terminating at the Effective Time,
Stockholder, solely in Stockholder's capacity as a Stockholder of Parent, agrees
to vote (or cause to be voted) all of the Shares at any meeting of the
Stockholders of Parent or any adjournment thereof, and in any action by written
consent of the Stockholders of the Company, (i) in favor of the approval of
Share Issuance, the Charter Amendment, the Merger Agreement (including the
principal terms thereof) and the Merger, and in favor of the other transactions
contemplated by the Merger Agreement, (ii) against any Parent Acquisition
Transaction or any other action that could reasonably be expected to delay or
not to facilitate approval of the Merger, (iii) against any action or agreement
that could reasonably be expected to result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Parent under
the Merger Agreement or that could reasonably be expected to result in any of
the conditions to the Parent's obligations under the Merger Agreement not being
fulfilled, and (iv) in favor of any other matter relating to the
consummation of the transactions contemplated by the Merger Agreement.

SECTION 1.03 Grant of Irrevocable Proxy. Concurrently with the
execution of this Agreement, Stockholder agrees to deliver to the Company a
proxy with respect to Stockholder's Shares in the form attached hereto as
Exhibit B (the "Proxy"), which shall be coupled with an
interest and irrevocable to the fullest extent permissible by law.

SECTION 1.04 Termination. This Agreement, the Proxy granted
hereunder and the obligations of Stockholder pursuant to this Agreement shall
terminate upon the date of the termination of the Merger Agreement pursuant to
Article VIII thereof; provided, however, that the termination of this Agreement
shall not relieve Stockholder from any liability for any previous breach of this
Agreement.

ARTICLE IIREPRESENTATIONS AND WARRANTIES
OF STOCKHOLDER

Stockholder hereby represents and warrants to the Company
as follows:

SECTION 2.01 Authorization; Binding Agreement. Stockholder has
all legal right, power, authority and capacity to execute and deliver this
Agreement and the Proxy, to perform his, her or its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby.
This Agreement and the Proxy have been duly and validly executed and delivered
by or on behalf of Stockholder and, assuming their due authorization, execution
and delivery by or on behalf of Parent, constitute a legal, valid and binding
obligation of Stockholder, enforceable against Stockholder in accordance with
their terms, subject to (i) the effect of any applicable bankruptcy,
insolvency, moratorium or similar law affecting creditors' rights generally and
(ii) rules of law governing specific performance, injunctive relief and
other equitable remedies.

SECTION 2.02 No Conflict; Required Filings and Consents.

1. The execution and delivery of this Agreement and the
grant of the Proxy to the Company by Stockholder do not, and the performance of
this Agreement and the grant of the Proxy to the Company by Stockholder will
not, (i) conflict with or violate any statute, law, rule, regulation,
order, judgment or decree applicable to Stockholder or by which Stockholder or
any of Stockholder's properties or assets is bound or affected,
(ii) violate or conflict with the Certificate of Incorporation, Bylaws or
other equivalent organizational documents of Stockholder (if any), or
(iii) result in or constitute (with or without notice or lapse of time or
both) any breach of or default under, or give to another party any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of any lien or encumbrance or restriction on any of the property or
assets of Stockholder pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Stockholder is a party or by which Stockholder or any of
Stockholder's properties or assets is bound or affected. There is no beneficiary
or holder of a voting trust certificate or other interest of any trust of which
Stockholder is a trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by Stockholder of the
transactions contemplated by this Agreement.
2. The execution and delivery of this Agreement and the
grant of the Proxy to the Company by Stockholder do not, and the performance of
this Agreement and the grant of the Proxy to the Company by Stockholder will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any third party or any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, could not prevent or
materially delay the performance by Stockholder of Stockholder's obligations
under this Agreement. Other than a Lock-Up Agreement with Parent dated as of
even date herewith, Stockholder does not have any understanding in effect with
respect to the voting or transfer of any Shares, other than any right of
repurchase granted to Parent. Stockholder is not required to make any filing
with or notify any governmental or regulatory authority in connection with this
Agreement, the Merger Agreement or the transactions contemplated hereby or
thereby pursuant to the requirements of the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act").
3. If Stockholder is a natural person and is married, and
Stockholder's Shares constitute community property or if the approval of Spouse
is otherwise needed for this Agreement to be legal, valid and binding on
Stockholder, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, Spouse, enforceable against
Spouse in accordance with its terms.

SECTION 2.03 Litigation. There is no private or governmental
action, suit, proceeding, claim, arbitration or investigation pending or, to the
knowledge of Stockholder or any of Stockholder's affiliates, threatened before
any agency, administration, court or tribunal, foreign or domestic, against
Stockholder or any of Stockholder's affiliates or any of their respective
properties or any of their respective officers or directors, in the case of a
corporate entity (in their capacities as such), or any of their respective
partners (in the case of a partnership), that, individually or in the aggregate,
could reasonably be expected to materially delay or materially impair
Stockholder's ability to consummate the transactions contemplated by this
Agreement. There is no judgment, decree or order against
Stockholder or any of Stockholder's affiliates, or, to the knowledge of
Stockholder or any of Stockholder's affiliates, any of their respective
directors or officers (in their capacities as such), in the case of a corporate
entity, or any of their respective partners (in the case of a partnership),
that, individually or in the aggregate, could reasonably be expected to prevent,
enjoin, alter or materially delay any of the transactions contemplated by this
Agreement, or that, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on Stockholder's ability to
consummate the transactions contemplated by this Agreement.

SECTION 2.04 Title to Shares. As of the date of this Agreement,
Stockholder is the record or beneficial owner of the Shares free and clear of
all liens, encumbrances, claims, proxies or voting restrictions other than
pursuant to this Agreement. The shares of Parent Common Stock, including the
options, warrants or other rights to acquire such stock, set forth on
Exhibit A hereto, are all of the securities of Parent owned,
directly or indirectly, of record or beneficially by Stockholder on the date of
this Agreement.

SECTION 2.05 Absence of Claims. Stockholder has no claims,
actions, causes of actions, suits, debts, liens, demands, contracts,
liabilities, agreements, costs, expenses, or losses of any type, whether known
or unknown, fixed or contingent, based on any fact or circumstance from the
beginning of time to the date of this Agreement, including, without limitation,
any claims arising from Stockholder's employment with Parent or Stockholders'
ownership of the Shares, whether based on contract, tort, statute, local
ordinance, regulation or any comparable law in any jurisdiction that he, she or
it could assert against Parent or its predecessors, successors, assigns,
officers, directors, Stockholders, employees or agents.

SECTION 2.06 Accuracy of Representations. The representations
and warranties contained in this Agreement are accurate in all respects as of
the date of this Agreement.

ARTICLE IIICOVENANTS OF STOCKHOLDER

SECTION 3.01 Further Assurances. From time to time and without
additional consideration, Stockholder shall (at Stockholder's sole expense)
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall (at Stockholder's sole expense) take such further actions, as the
Company may reasonably request for the purpose of carrying out and furthering
the intent of this Agreement.

SECTION 3.02 Confidentiality. Stockholder agrees to, and shall
use Stockholder's reasonable best efforts to cause its agents, representatives,
affiliates, employees, officers and directors, in the case of a corporate
entity, to:

1. treat and hold as confidential (and not disclose or
provide access to any person other than the Company and its agents,
representatives, affiliates, employees, officers and directors) and to refrain
from using any information relating to trade secrets, patent and trademark
applications, product development, price, customer and supplier lists, pricing
and marketing plans, policies and strategies, details of client and consultant
contracts, operations methods, product development techniques, business
acquisition plans, new personnel acquisition plans and all other confidential
information with respect to the Company, Parent, any affiliates of Parent or
their businesses;
2. in the event that Stockholder or any agent,
representative, affiliate, employee, officer or director of Stockholder, in the
case of a corporate entity, becomes legally compelled to disclose any such
information, provide the Company with prompt written notice of such requirement
so that the Company or Parent may seek a protective order or other remedy or
waive compliance with this Section 3.02; and
3. in the event that such protective order or other remedy
is not obtained, or the Company waives compliance with this Section 3.02
furnish only that portion of such confidential information that is legally
required to be provided and exercise its reasonable best efforts to obtain
assurances that confidential treatment will be accorded such information;
provided, however, that this Section 3.02 shall not apply to any
information that, (i) at the time of disclosure, is available publicly and was
not disclosed in breach of this Agreement by Stockholder or Stockholder's
agents, representatives, affiliates, employees, officers or directors, in the
case of a corporate entity, (ii) must be disclosed under applicable laws or
regulations or judicial or administrative proceedings (subject to clauses (b)
and (c) above), or (iii) shall be disclosed to Stockholder's legal advisors in
connection with advising Stockholder as to his, her or its legal rights and
obligations. Stockholder agrees and acknowledges that remedies at law for any
breach of Stockholder's obligations under this Section 3.02 are inadequate
and that in addition thereto the Company shall be entitled to seek equitable
relief, including injunction and specific performance, in the event of any such
breach.

SECTION 3.03 No Solicitation. If Stockholder is not an officer
or director of Parent, Stockholder will not, directly or indirectly, and will
instruct Stockholder's agents, representatives, affiliates, employees, officers
and directors, in case of a corporate entity, not to, directly or indirectly,
solicit, initiate or encourage (including, without limitation, by way of
furnishing public or nonpublic information), or take any other action to
facilitate, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to the Stockholders of Parent) that
constitutes, or may reasonably be expected to lead to, any Parent Acquisition
Transaction, or enter into or maintain or continue discussion or negotiate with
any person or entity in furtherance of such inquiries or to obtain a Parent
Acquisition Transaction, or agree to or endorse any Parent Acquisition
Transaction, or authorize or permit any of such agents, representatives,
affiliates, employees, officers and directors to take any such action.
Stockholder shall notify Company immediately after receipt by Stockholder or any
of Stockholder's agents, representatives, affiliates, employees, officers and
directors, in the case of a corporate entity, of any proposal for, or inquiry
respecting, any Parent Acquisition Transaction or any request for nonpublic
information in connection with such a proposal or inquiry, or for access to the
properties, books or records of Parent by any person or entity that informs or
has informed Parent or Stockholder that it is considering making or has made
such a proposal or inquiry. Such notice to Company shall indicate in reasonable
detail the identity of the person making the proposal or inquiry and the terms
and conditions of such proposal or inquiry. Stockholder immediately shall cease
and cause to be terminated all existing discussions or negotiations with any
parties conducted heretofore with respect to a Parent Acquisition
Transaction.

SECTION 3.04 Waiver of Appraisal Rights. Stockholder hereby
irrevocably and unconditionally waives, and agrees to cause to be waived and to
prevent the exercise of, any rights of appraisal, any dissenters' rights and any
similar rights that Stockholder or any other person may have by virtue of the
ownership of any Shares with respect to the Merger and the other transactions
contemplated by the Merger Agreement.

ARTICLE IVGENERAL PROVISIONS

SECTION 4.01  Entire Agreement; Amendments. This Agreement, the
Merger Agreement and the other agreements referred to herein and therein
constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties with
respect to the subject matter hereof. This Agreement may not be amended or
modified except in an instrument in writing signed by, or on behalf of, the
parties hereto.

SECTION 4.02 Survival of Representations and Warranties. All
representations and warranties made by Stockholder in this Agreement shall
survive any termination of the Merger Agreement and this Agreement.

SECTION 4.03 Indemnification. Stockholder shall hold harmless
and indemnify the Company and the Company's affiliates from and against, and
shall compensate and reimburse the Company and the Company's affiliates for, any
loss, damage, claim, liability, fee (including attorneys' fees), demand, cost or
expense (regardless of whether or not such loss, damage, claim, liability, fee,
demand, cost or expense relates to a third-party claim) that is directly or
indirectly suffered or incurred by Company or any of the Company's affiliates,
or to which the Company or any of the Company's affiliates otherwise becomes
subject, and that arises directly or indirectly from, or relates directly or
indirectly to (i) any inaccuracy in or breach of any representation or warranty
contained in this Agreement or (ii) any failure on the part of Stockholder to
observe, perform or abide by, or any other breach of, any restriction, covenant,
obligation or other provision contained in this Agreement.

SECTION 4.04 Assignment. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided that any
assignment, delegation or attempted transfer of any rights, interests or
obligations under this Agreement by Stockholder without the prior written
consent of the Company shall be void.

SECTION 4.05 Fees and Expenses. Except as otherwise provided
herein or in the Merger Agreement, all costs and expenses (including, without
limitation, all fees and disbursements of counsel, accountants, investment
bankers, experts and consultants to a party) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.

SECTION 4.06 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified,
(ii) when sent by confirmed facsimile if sent during normal business hours
of the recipient; if not, then on the next business day, (iii) five
(5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
respective parties at the following addresses (or at such other addresses as
shall be specified by notice given in accordance with this
Section 4.06):

1. if to the Company:
Captiva Software Corporation
   10145 Pacific Heights Blvd.
   San Diego, CA 92121
                   Facsimile No.: (858) 657-0889
                   Attention: Reynolds Bish
with a copy to:
Cooley Godward LLP
   4401 Eastgate Mall
   San Diego, CA 92121
   Facsimile No.: (858) 550-6420
   Attention: Lance W. Bridges
            Deyan P. Spiridonov
2. If to Stockholder:

The address of record maintained by ActionPoint, Inc. in its
stock records.

SECTION 4.07 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

SECTION 4.08 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner.

SECTION 4.09 Specific Performance. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement is not performed in accordance with its specific terms or is otherwise
breached. Stockholder agrees that, in the event of any breach or threatened
breach by Stockholder of any covenant or obligation contained in this Agreement,
the Company shall be entitled (in addition to any other remedy that may be
available to it, including monetary damages) to seek and obtain (a) a
decree or order of specific performance to enforce the observance and
performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. Stockholder further agrees that
neither the Company nor any other party shall be required to obtain, furnish or
post any bond or similar instrument in connection with or as a condition to
obtaining any remedy referred to in this Section 4.09, and Stockholder
irrevocably waives any right he, she or it may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.

SECTION 4.10 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of California
applicable to contracts executed in and to be performed in that state without
regard to any conflicts of laws. In any dispute arising out of or relating to
this Agreement or any of the transactions contemplated by this Agreement: (a)
each of the parties irrevocably and unconditionally consents and submits to the
exclusive jurisdiction and venue of either the state courts located in Santa
Clara County, Californiaor the United States District Court for the
Northern District of California, (b) each of the parties irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid and (c) each of the parties irrevocably waives the right to a
trial by jury.

SECTION 4.11 No Waiver. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The Company shall not be deemed to have waived any claim available to it arising
out of this Agreement, or any right, power or privilege hereunder, unless the
waiver is expressly set forth in writing duly executed and delivered on behalf
of the Company. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.

SECTION 4.12 Counterparts. This Agreement may be executed in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.

IN WITNESS WHEREOF, each of Company and Stockholder
has executed or has caused this Agreement to be executed by their respective
duly authorized officers as of the date first written above.

COMPANY
By:__________________
	Name:

Title:



STOCKHOLDER
_______________________
	Name:

Title:

---

EXHIBIT A

`Number of Shares
                           Number of Shares    of Company Common
                               of Parent      Stock Issuable Upon
                           Common Stock Owned Exercises of Options,
                             Beneficially     Warrants and Other
                           Beneficially and    Rights to Acquire
Name of Stockholder            of Record          Such Stock
-------------------------  -----------------  -------------------
Matt Albanese............            11,489              132,598
Patrick Edsell...........                 0                    0
John Finegan.............            14,898              197,057
Stephen Francis..........            93,579              218,125
Kimra Hawley.............            57,575              275,876
Thomas van Overbeek......           181,449              125,000
David Sharp..............            12,971               33,150
Bruce Silver.............             2,100               15,000
John Stetak..............             9,883               88,114
Dan Tompkins.............            56,000               17,500
James Vickers............                 0                    0`

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EXHIBIT B

IRREVOCABLE PROXY

The undersigned Stockholder of ActionPoint, Inc., a
Delaware corporation ("Parent"), hereby irrevocably (to the fullest
extent permitted by law) appoints the President and Chief Financial Officer of
the Captiva Software Corporation, a California corporation (the
"Company"), and each of them, as the sole and exclusive lawful attorneys-
in-fact and proxies of the undersigned, with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to the full
extent that the undersigned is entitled to do so) with respect to all of the
shares of capital stock of the Company that now are or hereafter may be
beneficially owned by the undersigned, and any and all other shares or
securities of Parent issued or issuable in respect thereof on or after the date
hereof (collectively, the "Shares") in accordance with the terms of this
Proxy. The Shares beneficially owned by the undersigned as of the date of this
Proxy are listed on the final page of this Proxy. Upon the undersigned's
execution of this Proxy, any and all prior proxies given by the undersigned with
respect to any Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the Expiration
Date (as defined below).

This Proxy is irrevocable (to the fullest extent permitted by
law), is coupled with an interest and is granted pursuant to that certain Voting
Agreement of even date herewith between the Company and the undersigned (the
"Voting Agreement"), and is granted in consideration of the Company
entering into the Agreement and Plan of Merger and Reorganization (the
"Merger Agreement"), dated as of March 4, 2002, among Parent, Condor
Merger Corp. a California corporation and wholly owned subsidiary of Parent
("Merger Sub"), and the Company. The Merger Agreement provides for the
merger of Merger Sub with and into the Company (the "Merger"). As used
herein, the term "Expiration Date" shall mean the earlier to occur of
(i) such date and time as the Merger Agreement shall have been validly
terminated pursuant to Article VIII thereof or (ii) such date and time as
the Merger shall become effective in accordance with the terms and provisions of
the Merger Agreement.

The attorneys-in-fact and proxies named above, and each of
them, are hereby authorized and empowered by the undersigned, at any time prior
to the Expiration Date, to act as the undersigned's true and lawful attorneys-
in-fact and proxies to vote the Shares, and to exercise all voting, consent and
similar rights of the undersigned with respect to the Shares (including, without
limitation, the power to execute and deliver in the undersigned's name any
consent, certificate or other document that may be required by law) at every
annual, special or adjourned meeting of Stockholders of Parent and in every
written consent in lieu of such meeting (i) in favor of adoption of the
Merger Agreement and the approval of the Merger, and in favor of each of the
other actions contemplated by the Merger Agreement, (ii) against any Parent
Acquisition Transaction (as defined in the Merger Agreement) or any other matter
that could reasonably be expected to delay or not to facilitate approval of the
Merger, (iii) against any action or agreement that could reasonably be
expected to result in a breach of any covenant, representation or warranty or
any other obligation or agreement of Parent under the Merger Agreement or which
could reasonably be expected to result in any of the conditions to Parent's
obligations under the Merger Agreement not being fulfilled, and (iv) in favor of
any other matter relating to the consummation of the transactions contemplated
by the Merger Agreement.

The attorneys-in-fact and proxies named above may not
exercise this Proxy on any other matter except as provided above. The
undersigned may vote the Shares on all other matters. Any obligation of the
undersigned hereunder shall be binding upon the successors and assigns of the
undersigned.



This Proxy is irrevocable (to the fullest extent permitted by
law). This Proxy shall terminate, and be of no further force and effect,
automatically upon the Expiration Date.

Dated: March 4, 2002





Signature of Stockholder:

Print Name of Stockholder:

Shares beneficially owned:

_____ shares of Parent Common Stock

_____ shares of Parent Common Stock issuable upon exercise of
outstanding options or warrants

---

ANNEX F

FORM of VOTING AGREEMENT FOR CAPTIVA OFFICERS, DIRECTORS AND
AFFILIATED STOCKHOLDERS

THIS VOTING AGREEMENT (this "Agreement") is
entered into as of March 4, 2002, by and between ActionPoint. Inc., a Delaware
corporation ("Parent"), and ("Shareholder").

W I T N E S S E T H:

WHEREAS, Parent, Condor Merger Corp. a California
corporation and wholly owned subsidiary of Parent ("Merger Sub"), and
Captiva Software Corporation, a California corporation (the "Company"),
propose to enter into an Agreement and Plan of Merger and Reorganization dated
as of the date hereof (as the same may be amended from time to time, the
"Merger Agreement"; capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to them in the Merger Agreement),
which provides, upon the terms and subject to the conditions thereof, for the
merger (the "Merger") of Merger Sub with and into the Company;

WHEREAS, as of the date hereof, Shareholder owns
beneficially or of record or has the power to vote, or direct the vote of, the
number of shares of (i) common stock of the Company (the "Company Common
Stock"), (ii) Series A preferred stock of the Company (the
"Company Series A Preferred Stock"), (iii) Series B
preferred stock of the Company (the "Company Series B Preferred
Stock"), (iv) Series C Preferred Stock of the Company (the "Company
Series C Preferred Stock"), (v) Series D Preferred Stock of the
Company (the "Company Series D Preferred Stock") and (vi) Series E
Preferred Stock of the Company (the "Series E Preferred Stock",)
and, together with the Company Series A Preferred Stock, the Company
Series B Preferred Stock, the Company Series C Preferred Stock, the
Company Series D Preferred Stock, the "Company Preferred Stock"), as
set forth opposite such Shareholder's name on Exhibit A hereto (all
such Company Common Stock and Company Preferred Stock and options, warrants or
other rights to acquire shares of Company Common Stock or Company Preferred
Stock of which ownership of record or beneficially or the power to vote is
hereafter acquired by Shareholder prior to the termination of this Agreement
being referred to herein as the "Shares"); and

WHEREAS, as a condition to the willingness of Parent
to enter into the Merger Agreement, Parent has requested that Shareholder agree
to enter into this Agreement, and, in order to induce Parent to enter into the
Merger Agreement, Shareholder has agreed to enter into this Agreement.

NOW, THEREFORE, in consideration of the
premises and of the mutual agreements and covenants set forth herein and in the
Merger Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

ARTICLE I

TRANSFER, VOTING AND CONVERSION OF SHARES

SECTION 1.01 Transfer of Shares. Shareholder
shall not, directly or indirectly, (a) sell, pledge, encumber, assign,
transfer or otherwise dispose of any or all of Shareholder's Shares or any
interest in such Shares, except pursuant to the Merger Agreement or unless the
transferee of such Shares shall agree to hold such Shares subject to the terms
of this Agreement by executing counterpart signature pages hereto and to the
Proxy (as defined below), or (b) deposit any Shares or any interest in such
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to any Shares or grant any proxy with respect thereto (other than as
contemplated herein), or (c) enter into any contract, commitment, option or
other arrangement or undertaking (other than the Merger Agreement) with respect
to the direct or indirect acquisition or sale, assignment, pledge, encumbrance,
transfer or other disposition of any Shares.

SECTION 1.02 Vote in Favor of the Merger. During the
period commencing on the date hereof and terminating at the Effective Time,
Shareholder, solely in Shareholder's capacity as a shareholder of the Company,
agrees to vote (or cause to be voted) all of the Shares at any meeting of the
shareholders of the Company or any adjournment thereof, and in any action by
written consent of the shareholders of the Company, (i) in favor of the
approval of the Charter Amendment, the Merger Agreement (including the principal
terms thereof) and the Merger, and in favor of the other transactions
contemplated by the Merger Agreement, (ii) against any Company Acquisition
Transaction or any other action that could reasonably be expected to delay or
not to facilitate approval of the Merger, (iii) against any action or agreement
that could reasonably be expected to result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or that could reasonably be expected to result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled, and (iv) in favor of any other matter relating to the
consummation of the transactions contemplated by the Merger Agreement.

SECTION 1.03 Grant of Irrevocable Proxy. Concurrently
with the execution of this Agreement, Shareholder agrees to deliver to Parent a
proxy with respect to Shareholder's Shares in the form attached hereto as
Exhibit B (the "Proxy"), which shall be coupled with an
interest and irrevocable to the fullest extent permissible by law.

SECTION 1.04 Termination. This Agreement, the Proxy
granted hereunder and the obligations of Shareholder pursuant to this Agreement
shall terminate upon the date of the termination of the Merger Agreement
pursuant to Article VIII thereof; provided, however, that the termination of
this Agreement shall not relieve Shareholder from any liability for any previous
breach of this Agreement.

ARTICLE IIREPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER

Shareholder hereby represents and warrants to Parent as
follows:

SECTION 2.01 Authorization; Binding Agreement.
Shareholder has all legal right, power, authority and capacity to execute and
deliver this Agreement and the Proxy, to perform his, her or its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. This Agreement and the Proxy have been duly and validly executed
and delivered by or on behalf of Shareholder and, assuming their due
authorization, execution and delivery by or on behalf of Parent, constitute a
legal, valid and binding obligation of Shareholder, enforceable against
Shareholder in accordance with their terms, subject to (i) the effect of
any applicable bankruptcy, insolvency, moratorium or similar law affecting
creditors' rights generally and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.

SECTION 2.02 No Conflict; Required Filings and
Consents.

(a)	The execution and delivery of this Agreement and the
grant of the Proxy to Parent by Shareholder do not, and the performance of this
Agreement and the grant of the Proxy to Parent by Shareholder will not,
(i) conflict with or violate any statute, law, rule, regulation, order,
judgment or decree applicable to Shareholder or by which Shareholder or any of
Shareholder's properties or assets is bound or affected, (ii) violate or
conflict with the Certificate of Incorporation, Bylaws or other equivalent
organizational documents of Shareholder (if any), or (iii) result in or
constitute (with or without notice or lapse of time or both) any breach of or
default under, or give to another party any right of termination, amendment,
acceleration or cancellation of, or result in the creation of any lien or
encumbrance or restriction on any of the property or assets of Shareholder
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Shareholder is a party or by which Shareholder or any of Shareholder's
properties or assets is bound or affected. There is no beneficiary or holder of
a voting trust certificate or other interest of any trust of which Shareholder
is a trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by Shareholder of the transactions contemplated by
this Agreement.

(b)	The execution and delivery of this Agreement and the
grant of the Proxy to Parent by Shareholder do not, and the performance of this
Agreement and the grant of the Proxy to Parent by Shareholder will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any third party or any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, could not prevent or
materially delay the performance by Shareholder of Shareholder's obligations
under this Agreement. Other than an Affiliate Agreement and a Lock-Up Agreement,
each with Parent dated as of even date herewith, Shareholder does not have any
understanding in effect with respect to the voting or transfer of any Shares,
other than any right of repurchase granted to the Company. Shareholder is not
required to make any filing with or notify any governmental or regulatory
authority in connection with this Agreement, the Merger Agreement or the
transactions contemplated hereby or thereby pursuant to the requirements of the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act").

(c)	If Shareholder is a natural person and is married, and
Shareholder's Shares constitute community property or if the approval of Spouse
is otherwise needed for this Agreement to be legal, valid and binding on
Shareholder, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, Spouse, enforceable against
Spouse in accordance with its terms.

SECTION 2.03 Litigation. There is no private or
governmental action, suit, proceeding, claim, arbitration or investigation
pending or, to the knowledge of Shareholder or any of Shareholder's affiliates,
threatened before any agency, administration, court or tribunal, foreign or
domestic, against Shareholder or any of Shareholder's affiliates or any of their
respective properties or any of their respective officers or directors, in the
case of a corporate entity (in their capacities as such), or any of their
respective partners (in the case of a partnership), that, individually or in the
aggregate, could reasonably be expected to materially delay or materially impair
Shareholder's ability to consummate the transactions contemplated by this
Agreement. There is no judgment, decree or order against Shareholder or any of
Shareholder's affiliates, or, to the knowledge of Shareholder or any of
Shareholder's affiliates, any of their respective directors or officers (in
their capacities as such), in the case of a corporate entity, or any of their
respective partners (in the case of a partnership), that, individually or in the
aggregate, could reasonably be expected to prevent, enjoin, alter or materially
delay any of the transactions contemplated by this Agreement, or that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on Shareholder's ability to consummate the transactions
contemplated by this Agreement.

SECTION 2.04 Title to Shares. As of the date of this
Agreement, Shareholder is the record or beneficial owner of the Shares free and
clear of all liens, encumbrances, claims, proxies or voting restrictions other
than pursuant to this Agreement. The shares of Company Common Stock and Company
Preferred Stock, including the options, warrants or other rights to acquire such
stock, set forth on Exhibit A hereto, are all of the securities of
the Company owned, directly or indirectly, of record or beneficially by
Shareholder on the date of this Agreement.

SECTION 2.05 Absence of Claims. Shareholder has no
claims, actions, causes of actions, suits, debts, liens, demands, contracts,
liabilities, agreements, costs, expenses, or losses of any type, whether known
or unknown, fixed or contingent, based on any fact or circumstance from the
beginning of time to the date of this Agreement, including, without limitation,
any claims arising from Shareholder's employment with the Company or
Shareholders' ownership of the Shares, whether based on contract, tort, statute,
local ordinance, regulation or any comparable law in any jurisdiction that he,
she or it could assert against the Company or its predecessors, successors,
assigns, officers, directors, shareholders, employees or agents.

SECTION 2.06 Accuracy of Representations. The
representations and warranties contained in this Agreement are accurate in all
respects as of the date of this Agreement.

ARTICLE IIICOVENANTS OF SHAREHOLDER

SECTION 3.01 Further Assurances. From time to
time and without additional consideration, Shareholder shall (at Shareholder's
sole expense) execute and deliver, or cause to be executed and delivered, such
additional transfers, assignments, endorsements, proxies, consents and other
instruments, and shall (at Shareholder's sole expense) take such further
actions, as Parent may reasonably request for the purpose of carrying out and
furthering the intent of this Agreement.

SECTION 3.02 Conversion of Company Preferred Stock.
Shareholder hereby acknowledges that, pursuant to the Company's Amended and
Restated Articles of Incorporation, (a) each holder of shares of Company
Preferred Stock may, at such holder's option, convert such shares of Company
Preferred Stock into fully paid and nonassessable shares of Company Common Stock
and (b) upon consent of the holders of a majority of the shares of Company
Preferred Stock on an as converted to Company Common Stock basis, all shares of
Company Preferred Stock shall automatically convert into shares of Company
Common Stock. Shareholder hereby agrees (a) to convert all shares of Company
Preferred Stock now owned or hereinafter acquired by it into shares of Company
Common Stock, such conversion to be contingent upon the occurrence of the
Closing and effective immediately prior to the Effective Time and (b) to vote at
any meeting of shareholders, or to consent in writing, as requested by Parent,
to cause the automatic conversion of the outstanding shares of Company Preferred
Stock into shares of Company Common Stock, such conversion to be effective
immediately prior to the Effective Time.

SECTION 3.03 No Solicitation. If Shareholder is not an
officer or director of the Company, Shareholder will not, directly or
indirectly, and will instruct Shareholder's agents, representatives, affiliates,
employees, officers and directors, in case of a corporate entity, not to,
directly or indirectly, solicit, initiate or encourage (including, without
limitation, by way of furnishing public or nonpublic information), or take any
other action to facilitate, any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to the shareholders of the
Company) that constitutes, or may reasonably be expected to lead to, any Company
Acquisition Transaction, or enter into or maintain or continue discussion or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Company Acquisition Transaction, or agree to or endorse any Company
Acquisition Transaction, or authorize or permit any of such agents,
representatives, affiliates, employees, officers and directors to take any such
action. Shareholder shall notify Parent immediately after receipt by Shareholder
or any of Shareholder's agents, representatives, affiliates, employees, officers
and directors, in the case of a corporate entity, of any proposal for, or
inquiry respecting, any Company Acquisition Transaction or any request for
nonpublic information in connection with such a proposal or inquiry, or for
access to the properties, books or records of the Company by any person or
entity that informs or has informed the Company or Shareholder that it is
considering making or has made such a proposal or inquiry. Such notice to Parent
shall indicate in reasonable detail the identity of the person making the
proposal or inquiry and the terms and conditions of such proposal or inquiry.
Shareholder immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to a Company Acquisition Transaction.

SECTION 3.04 Confidentiality. Shareholder agrees to,
and shall use Shareholder's reasonable best efforts to cause its agents,
representatives, affiliates, employees, officers and directors, in the case of a
corporate entity, to:

(a)	treat and hold as confidential (and not disclose or
provide access to any person other than Parent and its agents, representatives,
affiliates, employees, officers and directors) and to refrain from using any
information relating to trade secrets, patent and trademark applications,
product development, price, customer and supplier lists, pricing and marketing
plans, policies and strategies, details of client and consultant contracts,
operations methods, product development techniques, business acquisition plans,
new personnel acquisition plans and all other confidential information with
respect to the Company, Parent, any affiliates of Parent or their
businesses;

(b)	in the event that Shareholder or any agent,
representative, affiliate, employee, officer or director of Shareholder, in the
case of a corporate entity, becomes legally compelled to disclose any such
information, provide Parent with prompt written notice of such requirement so
that Parent or the Company may seek a protective order or other remedy or waive
compliance with this Section 3.04; and

(c)	in the event that such protective order or other
remedy is not obtained, or Parent waives compliance with this Section 3.04,
furnish only that portion of such confidential information that is legally
required to be provided and exercise its reasonable best efforts to obtain
assurances that confidential treatment will be accorded such information;

provided, however, that this Section 3.04 shall
not apply to any information that, (i) at the time of disclosure, is available
publicly and was not disclosed in breach of this Agreement by Shareholder or
Shareholder's agents, representatives, affiliates, employees, officers or
directors, in the case of a corporate entity, (ii) must be disclosed under
applicable laws or regulations or judicial or administrative proceedings
(subject to clauses (b) and (c) above), or (iii) shall be disclosed to
Shareholder's legal advisors in connection with advising Shareholder as to his,
her or its legal rights and obligations. Shareholder agrees and acknowledges
that remedies at law for any breach of Shareholder's obligations under this
Section 3.04 are inadequate and that in addition thereto Parent shall be
entitled to seek equitable relief, including injunction and specific
performance, in the event of any such breach.

SECTION 3.05 Waiver of Appraisal Rights. Shareholder
hereby irrevocably and unconditionally waives, and agrees to cause to be waived
and to prevent the exercise of, any rights of appraisal, any dissenters' rights
and any similar rights that Shareholder or any other person may have by virtue
of the ownership of any Shares with respect to the Merger and the other
transactions contemplated by the Merger Agreement.

ARTICLE IVGENERAL PROVISIONS

SECTION 4.01 Entire Agreement; Amendments. This
Agreement, the Merger Agreement and the other agreements referred to herein and
therein constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties with
respect to the subject matter hereof. This Agreement may not be amended or
modified except in an instrument in writing signed by, or on behalf of, the
parties hereto.

SECTION 4.02 Survival of Representations and
Warranties. All representations and warranties made by Shareholder in this
Agreement shall survive any termination of the Merger Agreement and this
Agreement.

SECTION 4.03 Indemnification. Shareholder shall hold
harmless and indemnify Parent and Parent's affiliates from and against, and
shall compensate and reimburse Parent and Parent's affiliates for, any loss,
damage, claim, liability, fee (including attorneys' fees), demand, cost or
expense (regardless of whether or not such loss, damage, claim, liability, fee,
demand, cost or expense relates to a third-party claim) that is directly or
indirectly suffered or incurred by Parent or any of Parent's affiliates, or to
which Parent or any of Parent's affiliates otherwise becomes subject, and that
arises directly or indirectly from, or relates directly or indirectly to (i) any
inaccuracy in or breach of any representation or warranty contained in this
Agreement or (ii) any failure on the part of Shareholder to observe, perform or
abide by, or any other breach of, any restriction, covenant, obligation or other
provision contained in this Agreement.

SECTION 4.04 Assignment. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns; provided
that any assignment, delegation or attempted transfer of any rights,
interests or obligations under this Agreement by Shareholder without the prior
written consent of Parent shall be void.

SECTION 4.05 Fees and Expenses. Except as otherwise
provided herein or in the Merger Agreement, all costs and expenses (including,
without limitation, all fees and disbursements of counsel, accountants,
investment bankers, experts and consultants to a party) incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.

SECTION 4.06 Notices. All notices and other
communications given or made pursuant hereto shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day,
(iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the respective parties at the following addresses (or at such other
addresses as shall be specified by notice given in accordance with this
Section 4.06):

(a)	if to Parent:

with a copy to:

Gunderson Dettmer Stough Villeneuve
   Franklin & Hachigian, LLP
   610 Lincoln Street
   Waltham, Massachusetts 02451
   Attention: Jay K. Hachigian
   Facsimile No.: (781) 622-1622

(b)	If to Shareholder:

The address of record maintained by the Company in its stock
records

SECTION 4.07 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

SECTION 4.08 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner.

SECTION 4.09 Specific Performance. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement is not performed in accordance with its specific terms or is
otherwise breached. Shareholder agrees that, in the event of any breach or
threatened breach by Shareholder of any covenant or obligation contained in this
Agreement, Parent shall be entitled (in addition to any other remedy that may be
available to it, including monetary damages) to seek and obtain (a) a
decree or order of specific performance to enforce the observance and
performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. Shareholder further agrees that
neither Parent nor any other party shall be required to obtain, furnish or post
any bond or similar instrument in connection with or as a condition to obtaining
any remedy referred to in this Section 4.09, and Shareholder irrevocably waives
any right he, she or it may have to require the obtaining, furnishing or posting
of any such bond or similar instrument.

SECTION 4.10 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California applicable to contracts executed in and to be performed in that state
without regard to any conflicts of laws. In any dispute arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement: (a) each of the parties irrevocably and unconditionally consents and
submits to the exclusive jurisdiction and venue of either the state courts
located in Santa Clara County, Californiaor the United States District
Court for the Northern District of California, (b) each of the parties
irrevocably consents to service of process by first class certified mail, return
receipt requested, postage prepaid and (c) each of the parties irrevocably
waives the right to a trial by jury.

SECTION 4.11 No Waiver. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. Parent shall not be deemed to have waived any claim available to it
arising out of this Agreement, or any right, power or privilege hereunder,
unless the waiver is expressly set forth in writing duly executed and delivered
on behalf of Parent. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.

SECTION 4.12 Counterparts. This Agreement may be
executed in two or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.

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IN WITNESS WHEREOF, each of Parent and Shareholder has
executed or has caused this Agreement to be executed by their respective duly
authorized officers as of the date first written above.

PARENT
By:___________________
	Name: 
	Title:



SHAREHOLDER
__________________________
Name:
Title:

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EXHIBIT A

SHARES OWNED



|Name of Shareholder                                                                                        | Number of Shares of Company Common Stock Owned
Beneficially and of Record | Number of Shares of Company Preferred Stock Owned
Beneficially and of Record | Number of Shares of Company Common Stock and
Company Preferred Stock Issuable upon Exercise of Options, Warrants and Other
Rights to Acquire Such Stock
|---------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|C.E. Unterberg, Towbin, LLC                                                                                | 39,629                                                                    | 750,200                                                                      |                                                                                                                                                        
|C.E. Unterberg, Towbin Capital Partners I, L.P.                                                            | 59,444                                                                    | 1,204,034                                                                    |                                                                                                                                                        
|UT Technology Fund Ltd.                                                                                    |                                                                           | 346,907                                                                      |                                                                                                                                                        
|UT Technology Partners I, L.P.                                                                             | 143,411                                                                   | 1,085,814                                                                    |                                                                                                                                                        
|UT Technology Partners II, L.P.                                                                            |                                                                           | 292,374                                                                      |                                                                                                                                                        
|UT Technology Partners LDC                                                                                 |                                                                           |                                                                              |                                                                                                                                                        
|UT Technology Partners LDS                                                                                 |                                                                           |                                                                              |                                                                                                                                                        
|UT Technology Partners LLC                                                                                 |                                                                           |                                                                              |                                                                                                                                                        
|Enterprise Partners III, L.P.                                                                              |                                                                           |                                                                              |                                                                                                                                                        
|Enterprise Partners III Associates, L.P.                                                                   |                                                                           |                                                                              |                                                                                                                                                        
|Nissho Electronics                                                                                         |                                                                           | 769,231                                                                      |                                                                                                                                                        
|Novus Ventures, L.P.                                                                                       |                                                                           |                                                                              |                                                                                                                                                        
|Bish, Reynolds C. & Patricia M. Norman, Trustees of the
Reynolds C. Bish Family Living Trust dated 3/28/90 |                                                                           |                                                                              |                                                                                                                                                        
|Reynolds C. Bish                                                                                           |                                                                           |                                                                              |                                                                                                                                                        
|Steven D. Burton                                                                                           |                                                                           |                                                                              |                                                                                                                                                        
|Rick Russo                                                                                                 |                                                                           |                                                                              |                                                                                                                                                        
|Blaine J. Owens                                                                                            |                                                                           |                                                                              |                                                                                                                                                        
|Randall A. Stern                                                                                           |                                                                           |                                                                              |                                                                                                                                                        
|Baird W. Brueseke                                                                                          |                                                                           |                                                                              |                                                                                                                                                        
|James L. Haley                                                                                             |                                                                           |                                                                              |                                                                                                                                                        
|Jim Berglund                                                                                               |                                                                           |                                                                              |                                                                                                                                                        
|Shirley Cerrudo                                                                                            |                                                                           |                                                                              |                                                                                                                                                        
|John E. Jones                                                                                              |                                                                           |                                                                              |                                                                                                                                                        
|Mel S. Lavitt                                                                                              |                                                                           |                                                                              |                                                                                                                                                        
|Mel S. Lavitt IRA                                                                                          |                                                                           |                                                                              |                                                                                                                                                        
|Jordan M. Libit                                                                                            |                                                                           |                                                                              | 150,000                                                                                                                                                
|Edward H. Pendergast                                                                                       |                                                                           |                                                                              |                                                                                                                                                        

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EXHIBIT B

IRREVOCABLE PROXY

The undersigned shareholder of Captiva Software
Corporation, a California corporation (the "Company"), hereby irrevocably
(to the fullest extent permitted by law) appoints the President and Chief
Financial Officer of ActionPoint, Inc., a Delaware corporation
("Parent"), and each of them, as the sole and exclusive lawful attorneys-
in-fact and proxies of the undersigned, with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to the full
extent that the undersigned is entitled to do so) with respect to all of the
shares of capital stock of the Company that now are or hereafter may be
beneficially owned by the undersigned, and any and all other shares or
securities of the Company issued or issuable in respect thereof on or after the
date hereof (collectively, the "Shares") in accordance with the terms of
this Proxy. The Shares beneficially owned by the undersigned as of the date of
this Proxy are listed on the final page of this Proxy. Upon the undersigned's
execution of this Proxy, any and all prior proxies given by the undersigned with
respect to any Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the Expiration
Date (as defined below).

This Proxy is irrevocable (to the fullest extent permitted by
law), is coupled with an interest and is granted pursuant to that certain Voting
Agreement of even date herewith between Parent and the undersigned (the
"Voting Agreement"), and is granted in consideration of Parent entering
into the Agreement and Plan of Merger and Reorganization (the "Merger
Agreement"), dated as of March 4, 2002, among Parent, Condor Merger Corp. a
California corporation and wholly owned subsidiary of Parent ("Merger
Sub"), and the Company. The Merger Agreement provides for the merger of
Merger Sub with and into the Company (the "Merger"). As used herein, the
term "Expiration Date" shall mean the earlier to occur of (i) such
date and time as the Merger Agreement shall have been validly terminated
pursuant to Article VIII thereof or (ii) such date and time as the Merger
shall become effective in accordance with the terms and provisions of the Merger
Agreement.

The attorneys-in-fact and proxies named above, and each of
them, are hereby authorized and empowered by the undersigned, at any time prior
to the Expiration Date, to act as the undersigned's true and lawful attorneys-
in-fact and proxies to vote the Shares, and to exercise all voting, consent and
similar rights of the undersigned with respect to the Shares (including, without
limitation, the power to execute and deliver in the undersigned's name any
consent, certificate or other document that may be required by law) at every
annual, special or adjourned meeting of shareholders of the Company and in every
written consent in lieu of such meeting (i) in favor of adoption of the
Merger Agreement and the approval of the Merger, and in favor of each of the
other actions contemplated by the Merger Agreement, (ii) against any
Company Acquisition Transaction (as defined in the Merger Agreement) or any
other matter that could reasonably be expected to delay or not to facilitate
approval of the Merger, (iii) against any action or agreement that could
reasonably be expected to result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which could reasonably be expected to result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled, and (iv) in favor of any other matter relating to the consummation of
the transactions contemplated by the Merger Agreement

The attorneys-in-fact and proxies named above may not
exercise this Proxy on any other matter except as provided above. The
undersigned may vote the Shares on all other matters. Any obligation of the
undersigned hereunder shall be binding upon the successors and assigns of the
undersigned.

This Proxy is irrevocable (to the fullest extent permitted by
law). This Proxy shall terminate, and be of no further force and effect,
automatically upon the Expiration Date.

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Dated: March 4, 2002





Signature of Shareholder:______________________

Print Name of Shareholder:______________________

Shares beneficially owned:

_____ shares of Company Common Stock

_____ shares of Company Preferred Stock

_____ shares of Company Common Stock issuable upon exercise of
outstanding options or warrants

_____ shares of Company Preferred Stock issuable upon exercise of
outstanding options or warrants

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ANNEX G

FORM OF AFFILIATE AGREEMENT

, 2002

ActionPoint, Inc.

1299 Parkmoor Avenue

San Jose, CA 95126

Re:	ActionPoint, Inc. - Affiliate Agreement

Ladies and Gentlemen:

I have been advised that as of the date of this letter
agreement I may be deemed to be an affiliate of Captiva Software Corporation, a
California corporation (the "Company"), as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145
("Rule 145") of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). Pursuant to the terms of the Agreement and Plan of
Merger and Reorganization, dated as of March 4, 2002 (the "Merger
Agreement"), among ActionPoint, Inc., a Delaware corporation
("Parent"), Condor Merger Corp., a California corporation and a wholly
owned subsidiary of Parent ("Merger Sub"), and the Company, Merger Sub
will be merged with and into the Company (the "Merger"). The Merger
Agreement contemplates that, upon consummation of the Merger, (i) holders of the
shares of capital stock of the Company ("Company Shares") will receive
shares of common stock of Parent ("Parent Shares") in exchange for their
Company Shares and (ii) the Company will become a wholly owned subsidiary of
Parent. Capitalized terms used in this letter agreement without definition
herein shall have the meanings assigned to them in the Merger Agreement.

As a result of the Merger, I may receive Parent Shares in
exchange for Company Shares owned by me immediately prior to the Merger. I have
been advised that the issuance of the Parent Shares in connection with the
Merger is expected to be effected pursuant to an effective registration
statement on Form S-4 under the Securities Act, in which case the resale of
such Parent Shares will be subject to restrictions set forth in Rule 145
unless such Parent Shares are otherwise transferred pursuant to an effective
registration statement under the Securities Act or an appropriate exemption from
registration.

1.	I represent, warrant and covenant to Parent that in the
event that I receive any Parent Shares as a result of the Merger:

A.	I am the holder and "beneficial owner" (as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of the Company Shares set forth under my signature
below, and I have good and valid title to such shares, free and clear of any
lien, pledge, security interest, adverse claim, equity, option, proxy, charge,
encumbrance or restriction of any nature that would adversely affect the
exercise or fulfillment of the rights and obligations of the parties to this
letter.

B.	I have carefully read this letter agreement and the
Merger Agreement and discussed, to the extent I felt necessary, with my counsel
or counsel for the Company the requirements of such documents and other
applicable limitations upon my ability to sell, transfer or otherwise dispose of
the Parent Shares.

C.	I shall not make any sale, transfer, pledge,
hypothecation or other disposition of any Parent Shares in violation of the
Securities Act or the Rules and Regulations. Accordingly, I will not offer,
sell, transfer, pledge, hypothecate or otherwise dispose of any Parent Shares
issued to me in the Merger unless at such time (i) such offer, sale,
transfer, pledge, hypothecation or other disposition is made in conformity with
the volume and other limitations of Rule 145, (ii) a registration statement
covering the proposed offer, sale, transfer, pledge, hypothecation or other
disposition shall be effective under the Securities Act, or (iii) in the written
opinion of counsel reasonably acceptable to Parent, such offer, sale, transfer,
pledge, hypothecation or other disposition is otherwise exempt from registration
under the Securities Act.

D.	I understand that Parent is under no obligation to
register the offer, sale, transfer, pledge, hypothecation or other disposition
of any Parent Shares by me or on my behalf under the Securities Act or, except
as provided in paragraph 2(A) below, to take any other action necessary in
order to make an exemption from such registration available.

E.	I understand, acknowledge and agree that (i) stop
transfer instructions will be given to Parent's transfer agent with respect to
the Parent Shares, and (ii) there will be placed on the certificates for
the Parent Shares issued to me, or any substitutions therefor, a legend
(together with any other legends required by applicable state securities laws or
otherwise) stating in substance:

"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH SUCH RULE AND IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT DATED AS OF MARCH 4, 2002 BETWEEN THE REGISTERED HOLDER HEREOF
AND ACTIONPOINT, INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICES OF ACTIONPOINT, INC."

F.	I understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to an registration
statement effective under the Securities Act, Parent reserves the right to put
the following legend on the certificates issued to my transferee:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND WERE
ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE ACT APPLIES. SUCH SHARES MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT."

G.	By executing this letter I do not admit that I am an
affiliate of the Company as described in the first paragraph of this letter, nor
do I waive of any rights that I may have to object to any claim that I am such
an affiliate on or after the date of this letter.

2.	By Parent's acceptance of this letter, Parent hereby
agrees with me as follows:

A.	For so long as and to the extent necessary to permit me
to sell the Parent Shares pursuant to Rule 145 and, to the extent
applicable, Rule 144 under the Securities Act, Parent shall (i) use
its reasonable efforts to (a) file, on a timely basis, all reports and data
required to be filed with the Commission by it pursuant to Section 13 of
the Exchange Act and (b) furnish to me upon request a written statement as
to whether or not Parent has complied with such reporting requirements during
the twelve months preceding any proposed sale of the Parent Shares by me
pursuant to Rule 145, and (ii) otherwise use its reasonable efforts to
permit such sales pursuant to Rule 145 and Rule 144 under the
Securities Act. Parent hereby represents to me that it has filed all reports
required to be filed with the Commission under Section 13 of the Exchange
Act during the preceding twelve months.

B.	Certificates with the legends set forth in paragraphs
1(E) and 1(F) above will be substituted by delivery of certificates without such
legends if (i) one year shall have elapsed from the date I acquired the
Parent Shares in the Merger and the provisions of Rule 145(d)(2) are then
available to me, (ii) two years shall have elapsed from the date I acquired
the Parent Shares in the Merger and the provisions of Rule 145(d)(3) are
then applicable to me, or (iii) Parent has received either a written
opinion of counsel, which opinion of counsel shall be reasonably satisfactory to
Parent, or a "no action" letter obtained by me from the staff of the Commission,
to the effect that the restrictions imposed by Rule 145 no longer apply to
any Parent Shares acquired by me in the Merger.

3.	Parent and I hereby further agree that:

A.	Irreparable damage would occur in the event that any
provision of this letter was not performed in accordance with its specific terms
or was otherwise breached. I agree that, in the event of any breach or
threatened breach by me of any covenant or obligation contained in this letter,
each of Parent and the Company shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (i) a decree or order of specific performance to enforce the
observance and performance of such covenant or obligation, and (ii) an
injunction restraining such breach or threatened breach.

B.	This letter shall be construed in accordance with, and
governed in all respects by, the laws of the State of Delaware, without giving
effect to principles of conflicts of law.

C.	This letter may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

D.	If a court of competent jurisdiction determines that
any provision of this letter is not enforceable or enforceable only if limited
in time and/or scope, this letter shall continue in full force and effect with
such provision stricken or so limited.

E.	Counsel to and accountants for the parties hereto shall
be entitled to rely upon this letter as needed.

F.	This letter shall be enforceable by, and shall inure to
the benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.

G.	This letter shall not be modified or amended, or any
right hereunder waived or any obligation excused, except by a written agreement
signed by both parties hereto.

H.	If any legal action or other legal proceeding relating
to the enforcement of any provision of this letter is brought against me, the
prevailing party shall be entitled to recover reasonable attorneys' fees, costs
and disbursements (in addition to any other relief to which the prevailing party
may be entitled).

I.	Each of the representations, warranties, covenants and
obligations contained in this letter shall survive the consummation of the
Merger.

Very truly yours,

____________________________________________

Print Name:

Company Shares beneficially owned:

_________ shares of Company Common Stock

_________ shares of Company Series A Preferred Stock

_________ shares of Company Series B Preferred Stock

_________ shares of Company Series C Preferred Stock

_________ shares of Company Series D Preferred Stock

_________ shares of Company Series E Preferred Stock

_________ shares of the Company Common Stock

issuable upon exercise of outstanding

options or warrants

_________ shares of the Company Preferred Stock



options or warrants



Accepted and Agreed to this

day of , 2002:

ACTIONPOINT, INC.

By: __________________
	Name:
	Title:

---

ANNEX H

FORM OF LOCK-UP AGREEMENT FOR CAPTIVA AFFILIATES

March 4, 2002

ActionPoint, Inc.

1299 Parkmoor Avenue

San Jose, CA 95126

Re:	Lock-Up Agreement for Captiva Software
Corporation Affiliates

Ladies and Gentlemen:

The undersigned understands that ActionPoint, Inc., a
Delaware corporation ("Parent"), pursuant to an Agreement and Plan of
Merger and Reorganization dated March 4, 2002 (the "Merger
Agreement") between Parent, Condor Merger Corp., a California corporation
and a wholly-owned subsidiary of Parent, and Captiva Software Corporation, a
California corporation (the "Company"), proposes to register shares of
its common stock (the "Parent Common Stock") pursuant to a Registration
Statement on Form S-4 to be filed with the Securities and Exchange
Commission. Capitalized terms used in this letter agreement without definition
shall have the meanings assigned to them in the Merger Agreement.

In consideration of the agreement by Parent to issue to the
undersigned at the Effective Time certain shares of Parent Common Stock (the
"Shares") and assume certain options to purchase common stock of the
Company held by the undersigned such that such options become exercisable for
Parent Common Stock (the "Options") pursuant to the Merger Agreement and
of other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned agrees that (1) with respect to
one-half of the Shares and the shares issuable upon exercise of the Options
(collectively, the "Restricted Shares"), for 90 calendar days immediately
following the Effective Time, and (2) with respect to the remaining one-
half of the Restricted Shares, for 180 calendar days immediately following the
Effective Time, the undersigned will not, except with the prior written approval
of Parent, (A) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any of the Restricted Shares or any securities
convertible into or exercisable or exchangeable for any of the Restricted
Shares, or (B) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Restricted Shares, whether any such transaction described in clause
(A) or (B) above is to be settled by delivery of Parent Common Stock
or such other securities, in cash or otherwise.

The foregoing shall not apply to (1) a bona fide gift or
bona fide gifts, provided that the donee or donees thereof agree in
writing to be bound by the terms of this agreement; (2) a distribution to
limited partners, members or shareholders of the undersigned, provided
that the distributees thereof agree in writing to be bound by the terms of this
agreement; or (3) a transfer to any trust for the benefit of the
undersigned or the undersigned's immediate family, provided that the
trustee of the trust agrees in writing, on behalf of the trust, to be bound by
the terms of this agreement. For purposes of this agreement, "immediate family"
shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin.

Upon delivery of the Shares pursuant to the terms of the
Merger Agreement or the Options, the undersigned will have and, except as
permitted by clause (1), (2) or (3) of the preceding paragraph, for
the duration of this agreement, will retain good and marketable title to the
Restricted Shares, free and clear of all liens, encumbrances and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with Parent's transfer agent and registrar against the
transfer of the Restricted Shares except in compliance with the foregoing
restrictions.

The undersigned understands that Parent is relying upon this agreement in
proceeding toward consummation of the Merger. The undersigned further
understands that this agreement is irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors, and assigns.

Very truly yours,



__________________________

Print name of shareholder

__________________________

Signature of shareholder or authorized signatory



Print title of authorized
signatory

FORM OF LOCK-UP AGREEMENT FOR ACTIONPOINT AFFILIATES

March 4, 2002

ActionPoint, Inc.

1299 Parkmoor Avenue

San Jose, CA 95126

Re:	Lock-Up Agreement for ActionPoint, Inc.
Affiliates

Ladies and Gentlemen:

The undersigned understands that ActionPoint, Inc., a
Delaware corporation ("Parent"), has entered into an Agreement and Plan
of Merger and Reorganization dated March 4, 2002 (the "Merger
Agreement") with Condor Merger Corp., a California corporation and a wholly-
owned subsidiary of Parent (the "Merger Sub"), and Captiva Software
Corporation, a California corporation (the "Company"), pursuant to which
Merger Sub will be merged with and into the Company, with the Company being the
surviving corporation and becoming a wholly-owned subsidiary of Parent.
Capitalized terms used in this letter agreement without definition shall have
the meanings assigned to them in the Merger Agreement.

As a condition and inducement to the Company's willingness to
enter into the Merger Agreement and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned
agrees that (1) with respect to one-half of the shares of common stock of
Parent held by the undersigned as of the date hereof and one-half of the shares
of common stock of Parent issuable upon exercise of options held by the
undersigned, if any, as of the date hereof (collectively, the "Restricted
Shares"), for 90 calendar days immediately following the Effective Time, and
(2) with respect to the remaining one-half of the Restricted Shares, for
180 calendar days immediately following the Effective Time, the undersigned will
not, except with the prior written approval of the Company, (A) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
of the Restricted Shares or any securities convertible into or exercisable or
exchangeable for any of the Restricted Shares, or (B) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Restricted Shares, whether any such
transaction described in clause (A) or (B) above is to be settled by
delivery of the common stock of Parent or such other securities, in cash or
otherwise.

The foregoing shall not apply to (1) a bona fide gift or
bona fide gifts, provided that the donee or donees thereof agree in
writing to be bound by the terms of this agreement; (2) a distribution to
limited partners, members or shareholders of the undersigned, provided
that the distributees thereof agree in writing to be bound by the terms of this
agreement; or (3) a transfer to any trust for the benefit of the
undersigned or the undersigned's immediate family, provided that the
trustee of the trust agrees in writing, on behalf of the trust, to be bound by
the terms of this agreement. For purposes of this agreement, "immediate family"
shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin.

The undersigned has as of the date hereof and, except as
permitted by clause (1), (2) or (3) of the preceding paragraph, for
the duration of this agreement, will retain good and marketable title to the
Restricted Shares, free and clear of all liens, encumbrances and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with Parent's transfer agent and registrar against the
transfer of the Restricted Shares except in compliance with the foregoing
restrictions.

The undersigned understands that the Company is relying upon
this agreement in proceeding toward consummation of the Merger. The undersigned
further understands that this agreement is irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors, and
assigns.

Very truly yours,



_______________________________

Print name of stockholder

_______________________________

Signature of stockholder or authorized signatory

_____________________________

Print title of authorized
signatory



---

ANNEX I

AMENDMENT NO. 1

TO

NOTE AND PREFERRED STOCK PURCHASE AGREEMENT

This AMENDMENT NO. 1 TO NOTE AND PREFERRRED STOCK
PURCHASE AGREEMENTamends and supplements that certain Note and Preferred
Stock Purchase Agreement (the "Agreement") dated August 1, 2000,
by and among Captiva Software Corporation, a California corporation (the
"Company"), the investors listed on Exhibit A-1 thereto (the
"Prior Investors") and the investors listed on Exhibit A-2 thereto
(the "2000 Investors" and collectively with the Prior Investors,
the "Investors") and is made as of March 4, 2002 by and among the
Company and the Investors. Capitalized terms used in this Amendment but not
otherwise defined herein shall have the meaning given such terms in the
Agreement.

RECITALS

WHEREAS, the Company has entered into that certain
Agreement and Plan of Merger and Reorganization dated March 4, 2002 (the
"Merger Agreement") with ActionPoint, Inc., a Delaware corporation
("ActionPoint"), and Condor Merger Corp., a California corporation
and wholly owned subsidiary of ActionPoint, pursuant to which the Company will
merge with and into Condor Merger Corp. and become a wholly owned subsidiary of
ActionPoint (the "Merger");

WHEREAS, under the Merger Agreement it is a condition
of the Merger that the outstanding promissory notes of the Company be amended
and restated as set forth herein;

WHEREAS, the Prior Investors have previously purchased
notes (the "Prior Notes") pursuant to that certain Note and Common
Stock Purchase Agreement dated as of December 30, 1998, as amended (the
"Prior Agreement"), by and among the Company and the Prior
Investors, and each Prior Note was amended and restated pursuant to the
Agreement as of August 1, 2000 (the "Amended and Restated
Notes");

WHEREAS, each Prior Investor has determined that it is
in the best interests of the Prior Investors that the Merger be consummated and
now desires to amend and restate, effective as of the Closing (as defined in the
Merger Agreement), its Amended and Restated Note and each of the other Amended
and Restated Notes outstanding as of the date hereof in substantially the form
attached hereto as Exhibit B-1, in the principal amount equal to the
amount set forth opposite each Prior Investor's name on Exhibit A-1
hereto under the heading "Principal Amount of Note" plus any interest accrued
but unpaid with respect to such Investor's Amended and Restated Note up to but
not including the date of the Closing (the "New 1998 Notes");

WHEREAS, the 2000 Investors have previously purchased
notes (the "2000 Notes"and, together with the Amended and
Restated Notes, the"Old Notes") pursuant to the Agreement;

WHEREAS, each 2000 Investor has determined that it is
in the best interests of the 2000 Investors that the Merger be consummated and
now desires to amend and restate, effective as of the Closing, its 2000 Note and
each of the other 2000 Notes outstanding as of the date hereof in substantially
the form attached hereto as Exhibit B-2, in the principal amount
equal to the amount set forth opposite such 2000 Investor's name on Exhibit
A-2 hereto under the heading "Principal Amount of Note" plus any interest
accrued but unpaid with respect to the such Investor's 2000 Note up to but not
including the date of the Closing1 (the "New 2000 Notes" and,
together with the New 1998 Notes, the"New Notes");

______________

(1) It is expressly understood and agreed that, to the extent any accrued interest under the 2000 Notes is payable in
shares of the Company's Series E Preferred Stock, the amount of such accrued interest shall be deemed to be
payable in cash for purposes of calculating the principal amount of the New 2000 Notes.

---

WHEREAS, the Agreement, pursuant to Section 9.6
thereto, may be amended or modified only by a written instrument duly executed
by the Company and the holders of the Old Notes representing a simple majority
of the aggregate principal amount of all the Old Notes then outstanding, and
each of the Amended and Restated Notes may be modified, amended or terminated
only by a written instrument duly executed by the Company and the holders of the
Amended and Restated Notes representing at least fifty percent (50%) of the
aggregate principal amount of all the Amended and Restated Notes then
outstanding, and each of the 2000 Notes may be modified, amended or terminated
only by a written instrument duly executed by the Company and the holders of the
2000 Notes representing at least fifty percent (50%) of the aggregate principal
amount of all the 2000 Notes then outstanding; and

WHEREAS, the Investors are holders of at least a
simple majority of the aggregate principal amount of all the Old Notes
outstanding as of the date hereof, and are holders of at least fifty percent
(50%) of the aggregate principal amount of all the Amended and Restated Notes
outstanding as of the date hereof, and are holders of at least fifty percent
(50%) of the aggregate principal amount of all the 2000 Notes outstanding as of
the date hereof, and the Investors desire to (1) amend the Agreement and (2)
amend and restate the Amended and Restated Notes and the 2000 Notes.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

1.	EFFECTIVENESS OF AMENDMENT.
This Amendment shall become effective with respect to all Investors
immediately prior to, and contingent upon the occurrence of, the
Closing.

2.	AMENDMENT AND RESTATEMENT OF NOTES.

2.1	Amendment and Restatement of Amended and Restated
Notes. Subject to the terms and conditions of this Amendment, each Prior
Investor agrees and the Company agrees to amend and restate in its entirety the
Amended and Restated Notes held by the Prior Investors in the form attached
hereto as Exhibit B-1 and in the principal amounts equal to the amount
set forth opposite each such Prior Investor's name on Exhibit A-1hereto
plus any interest accrued but unpaid with respect to such Investor's Amended and
Restated Note up to but not including the date of the Closing. The New 1998
Notes shall amend, restate and supercede in its entirety the terms and
conditions set forth in the Amended and Restated Notes, and the Amended and
Restated Notes shall be of no further force and effect as of the Closing.

2.2	Amendment and Restatement of 2000 Notes. Subject
to the terms and conditions of this Amendment, each 2000 Investor agrees and the
Company agrees to amend and restate in its entirety the 2000 Notes held by the
2000 Investors in the form attached hereto as Exhibit B-2 and in the
principal amounts equal to the amount set forth opposite each such 2000
Investor's name on Exhibit A-2 hereto plus any interest accrued but
unpaid with respect to such Investor's 2000 Note up to but not including the
date of the Closing.2 The New 2000 Notes shall amend, restate and supercede in
its entirety the terms and conditions set forth in the 2000 Notes, and the 2000
Notes shall be of no further force and effect as of the Closing.

2.3	Delivery of New 1998 Notes and New 2000 Notes.

1. Within 10 days after the Closing, each Prior Investor
shall tender its original executed Amended and Restated Note (or in lieu
thereof, a lost promissory note affidavit in form and substance acceptable to
the Company). Following the surrender of such Amended and Restated Note, a New

______________(2) It is expressly understood and agreed that, to the extent any accrued interest under the 2000 Notes is payable in
shares of the Company's Series E Preferred Stock, the amount of such accrued interest shall be deemed to be
payable in cash for purposes of calculating the principal amount of the New 2000 Notes.

1998 Note shall be delivered to such Prior Investor. By execution and delivery
of this Amendment, each Prior Investor agrees to the terms and conditions hereof
and in the New 1998 Notes.
2. Within 10 days after the Closing, each 2000 Investor
shall tender its original executed 2000 Note (or in lieu thereof, a lost
promissory note affidavit in form and substance acceptable to the Company).
Following the surrender of such 2000 Note, a New 2000 Note shall be delivered to
such 2000 Investor. By execution and delivery of this Amendment, each 2000
Investor agrees to the terms and conditions hereof and in the New 2002
Notes.

2.4	Treatment of Old Notes. No New 1998 Note, nor any
interest thereon, or New 2000 Note, nor any interest thereon, shall be paid or
delivered by the Company to any Investor until such Investor has surrendered its
Amended and Restated Note or 2000 Note, as the case may be. Notwithstanding the
foregoing, each Amended and Restated Note and each 2000 Note outstanding as of
the Closing shall be deemed to be amended and restated, as provided herein, and
the holder of such Amended and Restated Note or 2000 Note shall be deemed to
hold a New 1998 Note or New 2000 Note, as the case may be, shall be subject to
the terms thereof.

3.	TERMINATION OF SECURITY AGREEMENT. As of the
Closing, the Security Agreement dated as of August 1, 2000, by and between the
Company and the Investors (the "Security Agreement"), shall
terminate and be of no further force and effect and all other security
interests, liens and pledges in favor of the Investors securing amounts owing
under the Agreement and the Prior Agreement shall be automatically terminated
and released. Each Investor, its successors and assigns hereby agrees to
promptly execute and deliver to the Company, as reasonably requested by the
Company, any and all documentation required to be filed, including, without
limitation, any UCC termination statements, to evidence the termination of any
and all security interests, liens, encumbrances and pledges created in favor of
the Investors pursuant to the Security Agreement.

4.	COMPANY REPRESENTATIONS.
The Company hereby represents and warrants to each Investor that as of theClosing:

4.1	Organization; Good Standing; Qualification. The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of California. The Company has all requisite
corporate power and authority (i) to own and operate its properties and assets
and to carry on its business as now conducted, (ii) to execute and deliver this
Amendment and the New Notes, and (iii) to carry out the provisions of the
Agreement, as amended and supplemented by this Amendment (the "Amended
Agreement"), and the New Notes.

4.2	Authorization. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Amendment, the New Notes, the
performanceof all obligations of the Company hereunder and thereunder at
the Effective Date, and the authorization, reservation, issuance, sale, and
delivery of the shares of Common Stock issuable upon conversion of the New Notes
(the "Conversion Shares") has been taken or will be taken prior to
the Effective Time. This Amendment constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting the enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) except in
respect to any requirements that may be imposed under California usury
law.

4.3	Valid Issuance of Conversion Shares. When issued
in compliance with the provisions of the Amended Agreement, the Company's
Amended and Restated Articles of Incorporation (the "Restated
Articles"), and the New Notes, the Conversion Shares will be duly and
validly issued, fully paid, and nonassessable and will be free of restrictions
on transfer other than restrictions on transfer set forth in the Amended
Agreement and under applicable state and federal securities laws.

4.4	Governmental Consents. No consent, approval,
qualification, order or authorization of, or filing with, any local, state, or
federal governmental authority is required on the part of the Company in
connection with the Company's valid execution, delivery, or performance of this
Amendment except (i) such filings as have been made prior to the Closing,
and (ii) any notices of sale required to be filed with the Securities and
Exchange Commission under Regulation D of the Securities Act of 1933, as amended
(the "Securities Act"), or such filings as may be required under
applicable state securities laws, which will be timely filed within the
applicable periods therefor.

4.5	Rights to Acquire Company Capital Stock. Except
for (i) the rights created under this Amendment, (ii) the conversion privileges
of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock and Series E Preferred Stock, (iii) the
Company's reservation of shares of Common Stock for issuance to employees,
consultants and advisors to the Company pursuant to options granted and to be
granted in the future, (iv) currently outstanding warrants to purchase up to
45,500 shares of the Company's Series B Preferred Stock (all of which warrants
will expire on March 6, 2002), (v) currently outstanding warrants to purchase up
to 500,000 shares of the Company's Common Stock, and (vi) the rights provided in
Section 3.4 of the Amended and Restated Investors' Rights Agreement dated as of
August 1, 2000, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), or agreements for
the purchase or acquisition from the Company of any shares of its capital
stock.

4.6	Compliance with Other Instruments. The Company is
not in material violation or default of any provision of its Restated Articles
or Bylaws or in any material respect of any mortgage, indenture, agreement,
instrument, or contract to which it is a party or by which it is bound or, to
its knowledge, of any federal or state judgment, order, writ, decree, statute,
rule, or regulation applicable to the Company. The execution, delivery, and
performance by the Company of the New 1998 Notes, the New 2000 Notes or this
Amendment and the consummation of the transactions contemplated hereby and
thereby, will not result in any such violation or be in conflict with or
constitute, with or without the passage of time or the giving of notice, either
a material default under any such provision or an event that results in the
creation of any lien, charge, or encumbrance upon any assets of the Company or
the suspension, revocation, impairment, forfeiture, or nonrenewal of any permit,
license, authorization, or approval applicable to the Company, its business or
operations, or any of its assets or properties, which suspension, revocation,
impairment, forfeiture, or nonrenewal would be materially adverse to the
Company.

4.7	Disclosure. The Company has provided each Investor
with all the information reasonably available to it that such Investor has
requested for the purpose of deciding whether to amend and restate its Old Note.
Neither this Amendment nor any other written statements or certificates made or
delivered in connection herewith contains any untrue statement of a material
fact or, taken as a whole, omits to state a material fact necessary to make the
statements herein or therein not misleading.

4.8	Offering. Assuming the truth and accuracy of each
Investor's representations, warranties and covenants set forth in Section 5 of
this Amendment, the offer and issuance of the New 1998 Notes and the New 2000
Notes, as contemplated by this Amendment, are exempt from the registration
requirements of the Securities Act and applicable state securities laws, and
neither the Company nor any authorized agent acting on its behalf will take any
action hereafter that would cause the loss of such exemption.

5.	INVESTOR REPRESENTATIONS,
WARRANTIES AND COVENANTS.

5.1	Purchase Entirely for Own Account. Each Investor
understands that the Company is making this Amendment with each Investor in
reliance upon such Investor's representations to the Company. By executing this
Amendment, each Investor hereby confirms that the New Notes to be received by
such Investor will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Amendment, each Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any of the New Notes. Each Investor represents that it has full
power and authority to enter into this Amendment.

5.2	Disclosure of Information. Each Investor believes
that it has received all the information it considers necessary or appropriate
for deciding whether to amend and restate the Old Notes. Each Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the Company and its business and operations and the
terms and conditions of the New Notes.

5.3	Investment Experience. Each Investor acknowledges
it is an investor in securities of companies in the development stage and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the New Notes.

5.4	Accredited Investor. Each Investor acknowledges it
is an "accredited investor" within the meaning of Regulation D promulgated under
the Securities Act.

5.5	Restricted Securities. Each Investor understands
that the New Notes are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act, only in certain limited circumstances. In this connection,
each Investor represents that it is familiar with Rule 144 promulgated under the
Securities Act, and understands the resale limitations imposed thereby and by
the Securities Act.

5.6	Further Limitations on Disposition. Without in any
way limiting the representations set forth above, each Investor further agrees
not to make any disposition of all or any portion of the New Notes unless and
until the transferee has agreed in writing for the benefit of the Company to be
bound by the Amended Agreement, and:

1. There is then in effect a Registration Statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement; or
2. (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act.
3. Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by an Investor which is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his spouse or to the
siblings, lineal descendants including adopted children or ancestors of such
partner or his spouse, or a trust for the benefit of any of the foregoing if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he were an original Investor hereunder.

5.7	Legends. It is understood that the certificates
evidencing the New Notes and the Conversion Shares may bear one or all of the
following legends, in addition to any other legends required by state or federal
law:

1. "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES EVIDENCED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD OR TRANSFERRED FOR VALUE DIRECTLY OR
INDIRECTLY, IN THE ABSENCE OF SUCH REGISTRATION UNDER SUCH ACT AND QUALIFICATION
UNDER APPLICABLE STATE LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT AND QUALIFICATION UNDER APPLICABLE STATE LAWS, THE AVAILABILITY OF
WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF THE
CORPORATION."
2. Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations and Sections 417 and 418 of the California Corporations
Code.

6.	CALIFORNIA COMMISSIONER OF CORPORATIONS. THE
SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AMENDMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE
OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL. THE RIGHTS OF ALL PARTIES
TO THIS AMENDMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.

7.	GENERAL PROVISIONS.

7.1	Construction. The Amended Agreement shall be
governed, construed and enforced in accordance with the internal laws of the
State of California, irrespective of choice-of-law principles. All terms not
defined herein shall have the meanings used in the California Commercial
Code.

7.2	Conflicts. Except as and to the extent expressly
modified by this Amendment, the Agreement shall remain in full force and effect
in all respects. In the event of a conflict or inconsistency between this
Amendment and the Agreement, the provisions of this Amendment shall
govern.

7.3	Successors and Assigns. Except as otherwise
permitted herein, this Amendment shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective, successors and
assignees.

7.4	Severability. If any term, covenant or condition
of this Amendment is held to be invalid, void, or otherwise unenforceable by any
court of competent jurisdiction, the remainder of this Amendment shall not be
affected thereby and each term, covenant and condition of this Amendment shall
be valid and enforceable to the fullest extent permitted by law.

7.5	Modification. This Amendment may be amended or
modified only by a written instrument duly executed by the Company and the
holders of New Notes representing a simple majority of the aggregate principal
amount of all of the New Notes then outstanding.

7.6	Waiver. The observance of any term of this
Amendment may be waived (either generally or in a particular instance and either
retroactively or prospectively) with the written consent of the Company and the
holders of New Notes representing a simple majority of the aggregate principal
amount of all of the New Notes then outstanding. Any waiver effected in
accordance with this Section shall be binding upon each holder of an Old Note or
New Note whether or not such holder consented to such waiver.

7.7	Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

7.8	Representation. By executing this Agreement, each
Investor acknowledges and agrees that Cooley Godward llp represents the Company
solely and that such Investor has had an opportunity to consult with its own
attorney in connection with this Agreement.

7.9	Titles and Subtitles. The titles and subtitles
used in this Amendment are used for convenience only and arenot to be
considered in construing or interpreting this Amendment.

7.10	Attorneys' Fees. If any action at law or in equity
is necessary to enforce or interpret the terms of the Amended Agreement, the New
1998 Notes or the New 2000 Notes, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and disbursements in addition to any other
relief to which such party may be entitled.

7.11	Exculpation among Investors. Each Investor
acknowledges that it is not relying upon any person, firm, or corporation, other
than the Company and its officers and directors, in making its decision to agree
to this Amendment. Each Investor agrees that neither any other Investor nor the
respective controlling persons, officers, directors, partners, agents, or
employees of any other Investor shall be liable for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Agreement, this Amendment, the New 1998 Notes, the New 2000 Notes or the
Conversion Shares.

7.12	Consent to Jurisdiction and Forum Selection. The
parties hereto agree that all actions or proceedings arising in connection with
the Amended Agreement, the New 1998 Notes or the New 2000 Notes shall be tried
and litigated exclusively in the State and Federal courts located in the State
of California. The aforementioned choice of venue is intended by the parties to
be mandatory and not permissive in nature, thereby precluding the possibility of
litigation between the parties with respect to or arising out of the Amended
Agreement, the New 1998 Notes or the New 2000 Notes in any jurisdiction other
than that specified in this paragraph. Each party hereby waives any right it may
have to assert the doctrine of forum non conveniens or similar doctrine or to
object to venue with respect to any proceeding brought in accordance with this
paragraph, and stipulates that the State and Federal courts located in the State
of California shall have in personam jurisdiction and venue over each of them
for the purpose of litigating any dispute, controversy, or proceeding arising
out of or related to the Amended Agreement, the New 1998 Notes or the New 2000
Notes. Each party hereby authorizes and accepts service of process sufficient
for personal jurisdiction in any action against it as contemplated by this
paragraph by registered or certified mail, return receipt requested, postage
prepaid, to its address for the giving of notices as set forth in this
Amendment. Any final judgment rendered against a party in any action or
proceeding shall be conclusive as to the subject of such final judgment and may
be enforced in other jurisdictions in any manner provided by law.

[THIS SPACE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the undersigned have executed this
Amendment to be effective as of the Closing.

|COMPANY:                                                                                                         | INVESTORS:                               
|---------------------------------------------------------------------------------------------------------------- | -----------------------------------------
|CAPTIVA SOFTWARE
CORPORATION, a California corporation


Reynolds C. Bish,
President and Chief Executive Officer | (Print Name of Investor)
By:
Name:
Title:

EXHIBIT A-1

SCHEDULE OF PRIOR INVESTORS

`Investors                                               Principal Amount of Note (*)
---------------                                         ----------------------------
Enterprise Partners III, L.P.                           $708,147.95
7979 Ivanhoe Avenue, Ste. 550
La Jolla, CA 92037
Tel:  (619) 454-8833
Fax: (619) 454-2489
Attn:  Jim Berglund

Enterprise Partners III Associates, L.P.                $61,578.08
7979 Ivanhoe Avenue, Ste. 550
La Jolla, CA 92037
Tel:  (619) 454-8833
Fax: (619) 454-2489
Attn:  Jim Berglund

Novus Ventures                                          $256,575.34
20111 Stevens Creek Blvd., Suite 130
Cupertino, CA 95014
Tel:  (408) 252-3900
Fax: (408) 252-1713
Attn: Shirley Cerrudo

Totem Investment Partners, LLC                          $256,575.34
2235 Encinitas Boulevard
Suite 104
Encinitas, CA 92024
Tel:  (760) 943-8313
Fax: (760) 943-1867
Attn:  Ted Roth

Quadrangle Offshore (Cayman), L.L.C.                    $250,000.00
6 East 45th, Suite 805
New York, NY 10017
Tel:  (212) 883-9040
Fax: (212) 883-7642
Attn:  Dan Dubin/Larry Heller

Irvine Capital Partners                                 $200,000.00
10 East 50th Street, 24th floor
New York, NY 10022
Tel:  (212) 350-7247
Fax: (212) 350-7277
Attn:  David M. Bunzel





I-9





David D. Wood                                           $100,000.00
13090 Highway #9, Suite 3
Boulder Creek, CA 95006
Tel:  (831) 338-1551
Fax: (831) 338-8895

J.F. Shea & Co., Inc.                                   $500,000.00
655 Brea Canyon Road
Walnut, CA 91789
Tel:  (909) 594-9500
Fax: (909) 869-0840
Attn:  Edward Shea


UT Technology Fund Ltd.                                 $50,273.65
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil

UT Technology Partners I, LP                            $157,355.57
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil

UT Technology Partners II, LP                           $42,370.78
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil

C.E. Unterberg, Towbin Capital                          $300,000.00
Partners I, L.P.
10 East 50th Street, 22nd Floor
New York, NY 10022h
Tel:  (212) 572-8175
Fax: (212) 980-7674
Attn:  Robert M. Matluck

Solar Group, S.A.                                       $250,000.00
14 Camden North Paget
Bermuda Daniel Evers-03
Tel:  (441) 292-2326
Fax:  (441) 292-5100
Attn:  James J. Todd


I-10



Rock Associates                                         $100,000.00
41 Winged Foot Drive
Larchmont, NY 10538
Tel:  (212) 758-8211
Fax: (212) 421-5944
Attn:  Stuart Shapiro

Steve Frankel                                           $5,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8052
Fax: (212) 980-7074

Lizabeth Moses                                          $10,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8080
Fax: (212) 980-7074

Estelle Konviser                                        $10,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8178
Fax: (212) 980-7074

Andrew Arno                                             $25,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Andrew Arno as custodian for                            $12,500.00
Jesse Benjamin Arno under the New York
Uniform Gift to Minors Act
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Andrew Arno as custodian for                            $12,500.00
Matthew Arno under the New York
Uniform Gift to Minors Act
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Elizabeth Arno                                          $10,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074


I-11



Jeffrey C. Moskowitz                                    $15,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8080
Fax: (212) 644-6524

Linden Partners, LLC                                    $15,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8024
Fax: (212) 888-8611

Carol Curran                                            $10,000.00
12305 Thunder Bay Court
Indianapolis, IN 46236
Tel:  (317) 826-1060
Fax: (317) 826-1061

David and Angela Nazarian Family Trust                  $100,000.00
9300 Wilshire Boulevard, Suite 600
Beverly Hills, CA 90212
Tel:  (310) 273-5301
Fax: (310) 273-5345
Attn:  David Nazarian/Joel Balbien

Thomas Unterberg                                        $200,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003

C.E. Unterberg, Towbin LLC                              $200,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003
Attn:  Thomas Unterberg

Charles A. DeBare                                       $15,000.00
47th East 88th Street
Apartment 8C
New York, NY 10128
Tel:  (212) 534-7163
Fax:  (212) 348-7109

Mary A. DeBare                                          $15,000.00
47th East 88th Street
Apartment 8C
New York, NY 10128
Tel:  (212) 534-7163
Fax:  (212) 348-7109


I-12



J. Bruce Llewellyn                                      $100,000.00
30 Rockefeller Plaza
19th Floor
New York, NY, 10112
Tel:  (212) 698-7867
Fax:  (212) 698-7825

Wendy Lavitt                                            $25,000.00
10 East 50th St., 22nd Flr.
New York, NY 10022
Tel:  (212) 572-8050
Fax:  (212) 888-8613

James E. Borner & Ann B. Borner                         $25,000.00
400 West End Avenue #17A
New York, NY 10024
Tel:  (914) 699-3030
Fax:  (914) 699-3035

Scott A. Sampson Trust #1                               $25,000.00
222 E. Eric Street
Milwaukee, WI 53202
Tel:  (414) 272-4440
Fax:  (414) 282-0701
Attn: Scott Sampson

Mel S. Lavitt IRA                                       $25,000.00
10 East 50th St., 22nd Flr.
New York, NY 10022
Tel:  (212) 572-8050
Fax:  (212) 888-8613
Attn:  Mel Lavitt


TOTAL:                                                  $4,087,876.71`

(*)  The principal amount of each note set forth in this Exhibit A-1 shall be adjusted as of
the date of the Closing to include any accrued but unpaid interest pursuant to Section 2.1 hereof.

I-13

---

EXHIBIT A-2

2000 INVESTORS

`Investors                                               Principal Amount of Note(**) 
---------                                               ------------------------
Enterprise Partners III, L.P.                           $276,000.00
7979 Ivanhoe Avenue, Ste. 550
La Jolla, CA 92037
Tel:  (619) 454-8833
Fax: (619) 454-2489
Attn:  Jim Berglund

Enterprise Partners III Associates, L.P.                $24,000.00
7979 Ivanhoe Avenue, Ste. 550
La Jolla, CA 92037
Tel:  (619) 454-8833
Fax: (619) 454-2489
Attn:  Jim Berglund

Novus Ventures                                          $100,000.00
20111 Stevens Creek Blvd., Suite 130
Cupertino, CA 95014
Tel:  (408) 252-3900
Fax: (408) 252-1713
Attn: Shirley Cerrudo

Totem Investment Partners, LLC                          $100,000.00
2235 Encinitas Boulevard
Suite 104
Encinitas, CA 92024
Tel:  (760) 943-8313
Fax: (760) 943-1867
Attn:  Ted Roth

J.F. Shea & Co., Inc.                                   $500,000.00
655 Brea Canyon Road
Walnut, CA 91789
Tel:  (909) 594-9500
Fax: (909) 869-0840
Attn:  Edward Shea

UT Technology Fund Ltd.                                 $100,547.30
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil


I-14




UT Technology Partners I, LP                            $314,711.15
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil

UT Technology Partners II, LP                           $84,741.55
10 East 50th Street, 24th Floor
New York, NY 10022
Tel:  (212) 984-6250
Fax: (212) 984-6255
Attn:  James A. Weil

C.E. Unterberg, Towbin Capital                          $300,000.00
Partners I, L.P.
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8175
Fax: (212) 980-7674
Attn:  Robert M. Matluck

C.E. Unterberg, Towbin LLC                              $200,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8175
Fax: (212) 980-7674
Attn:  Thomas Unterberg

Solar Group, S.A.                                       $150,000.00
14 Camden North Paget
Bermuda Daniel Evers-03
Tel:  (441) 292-2326
Fax:  (441) 292-5100
Attn:  James J. Todd

Estelle Konviser                                        $10,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8178
Fax: (212) 980-7074

Andrew Arno                                             $25,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Andrew Arno as custodian for                            $12,500.00
Matthew Arno under the New York
Uniform Gift to Minors Act
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074


I-15



Andrew Arno as custodian for                            $12,500.00
Jesse Benjamin Arno under the New York
Uniform Gift to Minors Act
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Elizabeth Arno                                          $10,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel: (212) 572-8055
Fax: (212) 980-7074

Jeffrey C. Moskowitz                                    $15,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8080
Fax: (212) 644-6524

Michael Marrus                                          $15,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8024
Fax: (212) 888-8611

Thomas Unterberg                                        $200,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003

Marjorie and Clarence Unterberg Foundation              $100,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003
Attn:  Thomas Unterberg

Bella and Israel Unterberg Foundation                   $50,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003
Attn:  Thomas Unterberg

Ellen Celli Family Trust                                $50,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003
Attn:  Thomas Unterberg


I-15



Emily Satloff Family Trust                              $50,000.00
10 East 50th Street, 22nd Floor
New York, NY 10022
Tel:  (212) 572-8005
Fax: (212) 980-7003
Attn:  Thomas Unterberg

Ellen U. Celli                                          $50,000.00
993 Park Avenue, # 5 South
New York, NY 10028
Tel:  (212) 737-8630

Charles A. DeBare                                       $15,000.00
47th East 88th Street
Apartment 8C
New York, NY 10128
Tel:  (212) 534-7163
Fax:  (212) 348-7109

Mary A. DeBare                                          $15,000.00
47th East 88th Street
Apartment 8C
New York, NY 10128
Tel:  (212) 534-7163
Fax:  (212) 348-7109

Wendy Lavitt                                            $25,000.00
10 East 50th St., 22nd Flr.
New York, NY 10022
Tel:  (212) 572-8050
Fax:  (212) 888-8613

Park City Investments                                   $25,000.00
10 East 50th St., 22nd Flr.
New York, NY 10022
Tel:  (212) 572-8050
Fax:  (212) 888-8613

James E. and Ann B. Borner                              $25,000.00
400 West End Avenue #17A
New York, NY 10024
Tel:  (914) 699-3030
Fax:  (914) 699-3035

Scott A. Sampson Trust #1                               $25,000.00
222 E. Eric Street
Milwaukee, WI 53202
Tel:  (414) 272-4440
Fax:  (414) 282-0701
Attn: Scott Sampson

James J. Norman                                         $50,000.00
264 Boyd Road
Pleasant Hill, CA  94523
Tel:  (925) 930-6469


I-17



Jeffrey B. Jones                                        $50,000.00
3974 Waterhouse Road
Oakland, CA  94602
Tel: (415) 263-2615
Fax: (510) 531-7948

Theo Muller                                             $50,000.00
20 Peach Road
Darien, CT  06820
Tel: (201) 625-8400
Fax: (203) 655-0381

Robert C. Duvall                                        $50,000.00
613 North Point Drive
Holmes Beach, FL  34217
Tel: (941) 778-2103
Fax: (724) 658-7807

Dale Crane                                              $50,000.00
903 Driver Way
Incline Village, NV  89451
Tel: (775) 833-3105
Fax:  (775) 833-1889

David House                                             $250,000.00
13340 Old Oak Way
Saratoga, CA  95070
Tel:  (708) 867-5414
Fax:  (408) 867-5699

Mr. Ingolf Dueckminor                                   $100,000.00
Lohweg 10
Eching, Germany  D85386
Tel:  (49) 89-319-6026
Fax:  (49) 89-3271-4887

Mr. Christoph Harder                                    $100,000.00
Seelickstrasse 60
Zurich, Switzerland   CH 8038
Tel:  (411) 455-8539
Fax:  (411) 481-5552

Mr. Gerry Chastelet                                     $50,000.00
15550 Lightwave Drive
Clearwater, FL  33760
Tel: (727) 519-2844
Fax:  (727) 822-2711


I-18



Steven H. Grant Family Trust                            $50,000.00
15550 Lightwave Drive
Clearwater, FL  33760
Tel: (727) 519-2852
Fax:  (727) 467-0702
Attn:  Steven H. Grant

George Matz                                             $50,000.00
15550 Lightwave Drive
Clearwater, FL  33760
Tel: (727) 519-2819
Fax:  (727) 467-0702

Gordon Stuart Mitchard and Pamela Ann Mitchard          $50,000.00
15821 San Benito Way
Monte Serenco, CA  95030
Tel:  (408) 943-4326

Ian Jenks                                               $100,000.00
The Grange
58 High Street
Flore, Northamptonshire
UK  NN74LW
Tel:  (44) 13-27-342389
Fax:  (44) 13-27-340224

Abram Jakubowicz                                        $50,000.00
Loostrasse 23 D11 8803
Ruschlikon, Switzerland
Tel:  (411) 455-8522
Fax:  (411) 455-8586

Chris Lewis                                             $60,000.00
3978 Arlington Drive
Palm Harbor, FL  34685
Tel:  (727) 803-3418

Rick Russo                                              $10,000.00
10145 Pacific Heights Blvd., 6th Floor
San Diego, CA  92121
Fax:  (858) 320-1010


TOTAL:                                                  $4,000,000.00`

**
  The principal amount of each note set forth in this Exhibit A-2 shall be adjusted as of the date of
the Closing to include any accrued but unpaid interest pursuant to Section 2.2 hereof.

I-18

---

Exhibit B-1

THE SECURITIES EVIDENCED BY THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THE SECURITIES
EVIDENCED BY THIS NOTE MAY NOT BE OFFERED, SOLD OR TRANSFERRED FOR VALUE
DIRECTLY OR INDIRECTLY, IN THE ABSENCE OF SUCH REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAWS, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF THE
COMPANY.

THE SECURITIES REPRESENTED BY THIS NOTE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER OF A CERTAIN NOTE AND PREFERRED STOCK PURCHASE
AGREEMENT, DATED ON OR ABOUT AUGUST 1, 2000, AS AMENDED FROM TIME TO TIME.  THE
COMPANY WILL,UPON WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE.

SECOND AMENDED AND RESTATED

SUBORDINATED CONVERTIBLE PROMISSORY NOTE



San Diego, California

, 2002

This Second Amended and Restated Subordinated Convertible
Promissory Note (this "Note"), dated as             
2002, amends, re-evidences, restates, and supercedes in full, but does
not in any way satisfy nor discharge the outstanding indebtedness, if any, owed
under that certain Amended and Restated Senior Subordinated Secured Promissory
Note dated August             2000 in the original principal amount of [Amount in
Words] Dollars [($amount)] made by the undersigned (the
"Company") in favor of , or its
registered assigns (the "Holder").

For value received, the Company hereby promises to pay to the
Holder, or order, the principal amount             
Dollars ($            ), plus interest accrued
thereon.

This Note is one of a series of amended and restated
promissory notes issued by the Company pursuant to that certain Note and
Preferred Stock Purchase Agreement dated August 1, 2000, as amended by Amendment
No. 1 thereto dated March 4, 2002 (the "Note Purchase
Agreement") to the holders of such amended and restated notes in
the aggregate principal amount of up to $            , which notes together
are designated the "New 1998 Notes."

This Note shall bear six percent (6%) simple interest
per annum (calculated on a 365-day year, actual days elapsed) or the maximum
rate permissible by law (which under the laws of the State of California shall
be deemed to be the laws relating to permissible rates of interest on commercial
loans), whichever is less.  Interest shall be due and payable, in cash or cash
equivalents, quarterly in arrears not later than the first day of each calendar
quarter for the preceding quarter.

Unless earlier converted as provided below, the Company shall
pay the unpaid principal amount plus accrued but unpaid interest on the unpaid
principal amount in full on             2007.

At any time prior to the termination of that certain
Agreement and Plan of Merger and Reorganization by and among ActionPoint, Inc.,
Condor Acquisition Corp. and the Company dated March 4, 2002 (the
"Merger Agreement"), upon three (3) days prior written
notice to the Company, the Holder may convert, effective as of the Closing (as
defined in the Merger Agreement), the entire outstanding principal balance of
this Note and all accrued but unpaid interest hereunder into shares of the
Company's common stock (the "Conversion") at a
conversion price per share calculated as set forth below (the
"Conversion Price"); provided, however, that if
the Effective Time (as defined in the Merger Agreement) does not occur, the
Conversion shall not be deemed to occur.

Immediately upon the Conversion, all amounts due hereunder
shall be deemed fully satisfied and paid in full, and the Company will be
forever released from its obligations and liabilities under this Note.

This Note may be transferred only upon surrender of the
original Note for registration of transfer, duly endorsed, or accompanied by a
duly executed written instrument of transfer in form satisfactory to the
Company.  Thereupon, a new promissory note for the same principal amount and
interest will be issued to, and registered in the name of, the transferee.
Interest and principal are payable only to the registered holder of this
Note.

This Note may be prepaid at any time and from time to time,
in whole or in part, without penalty, subject to the written concurrence of the
holders of the Senior Indebtedness (as defined below).  All payments with
respect to this Note shall be credited first to the payment of accrued and
unpaid interest payable hereunder and then to the repayment of principal.

The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of the Senior Indebtedness (as defined
below).

(a)	Conversion Price. The Conversion Price shall be
an amount equal to $1.00 multiplied by the quotient, rounded to the fifth
decimal, obtained by dividing (A) the aggregate outstanding principal amount of
the New Notes (as defined in the Note Purchase Agreement) plus any accrued but
unpaid interest thereunder by (B) the product of (x) 4.0 multiplied by (y) the
Company Fully Diluted Capitalization.

(b)	Company Fully Diluted Capitalization.  As used
in this Note, the term "Company Fully Diluted
Capitalization" shall mean the sum of (A) the number of shares of
the Company's common stock issued and outstanding immediately prior to the
Closing and (B) the number of shares of the Company's common stock issuable upon
exercise, conversion or exchange of all rights to acquire shares of the
Company's common stock issued and outstanding as of immediately prior to the
Closing, other than shares of the Company's common stock issuable upon exercise
of the New Notes and excluding the number of shares of the Company's common
stock issuable upon exercise of stock options issued and outstanding under the
Company's 2002 Equity Incentive Plan.

(c)	Senior Indebtedness.As used in this
Note, the term "Senior Indebtedness" shall mean the
principal of and unpaid accrued interest on (i) all indebtedness, currently
existing or hereafter arising, of the Company to banks, insurance companies or
other financial institutions regularly engaged in the business of lending money,
which is for money borrowed by the Company (whether or not secured), (ii) all
indebtedness under the 2000 Notes (as defined in the Note Purchase Agreement)
and (iii) any such indebtedness or any debentures, notes or other evidence of
indebtedness issued in exchange for such Senior Indebtedness.

(d)	Effect of Subordination.

1. No payment on account of principal of or interest on this
Note shall be made, and no such payment shall be required or accepted by Holder,
if, at the time of such payment or immediately after giving effect thereto,
there shall exist under any Senior Indebtedness or any agreement pursuant to
which any Senior Indebtedness is issued, any default or any condition, event or
act, which with notice or lapse of time, or both, would constitute a default.
Should the Holder of this Note, while the Company is so in default and after
being notified by the holder of the Senior Indebtedness of the default, receive
any such payment, or should Holder receive any distribution in bankruptcy,
dissolution, or similar insolvency proceedings in regard to the Company, Holder
will hold such payment or distribution in trust for the holder of the Senior
Indebtedness and will pay over such amounts to such holder to apply to the
Senior Indebtedness until the same is paid in full.
2. Subject to the rights of the Senior Indebtedness in
paragraph (b)(i) hereof, nothing contained in this Note shall impair, as between
the Company and the Holder, the obligation of the Company, subject to the terms
and conditions hereof, to pay to the Holder the principal hereof and interest
hereon as and when the same become due and payable, or shall prevent the Holder
of this Note, upon default hereunder, from exercising all rights, powers and
remedies otherwise provided herein or by applicable law.

(e)	Undertaking.Byits acceptance
of this Note, the Holder agrees to execute and deliver such documents as may be
reasonably requested from time to time by the Company or the lender of any
Senior Indebtedness in order to implement the foregoing provisions.

In the event funds are not available to pay off the entire
outstanding principal and accrued interest thereon, under all of the New 1998
Notes, each holder of a New 1998 Note shall be entitled to receive an amount
equal to the aggregate amount available for repayment multiplied by a fraction
the numerator of which is the principal amount outstanding under such holder's
New 1998 Note and the denominator of which is the aggregate principal amount
outstanding under all of the New 1998 Notes.

If any of the events specified in paragraphs (i) through (v)
below shall occur (herein individually referred to as an "Event of
Default"), the holders of the New 1998 Notes representing at least
fifty percent (50%) of the aggregate principal amount of all of the New 1998
Notes then outstanding (the "Majority Holders") may, so
long as such condition exists, declare the entire principal and unpaid accrued
interest hereon immediately due and payable by notice in writing to the
Company.

1. Default in the payment of the principal and unpaid
accrued interest of this Note when due and payable if such default is not cured
by the Company within twenty (20) days after the Majority Holders have given the
Company written notice of such default;
2. Breach by the Company of any (a) representation or
warranty when made or (b) covenant, agreement, or other provision, which breach
is not cured within thirty (30) days after the Majority Holders have given
written notice to the Company, contained in this Note or the Note Purchase
Agreement;
3. The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under the
Federal Bankruptcy Act, or any other applicable federal or state law, or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee, or other similar official of the
Company, or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the taking or corporate action by
the Company in furtherance of any such action.
4. If, within sixty (60) days after the commencement of an
action against the Company (and service of process in connection therewith on
the Company) seeking any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such action shall not have been resolved in favor of the Company or
all orders or proceedings thereunder affecting the operations thereunder
affecting the operations or the business of the Company stayed, or if the stay
of any such order or proceeding shall thereafter be set aside, or if, within
sixty (60) days after the appointment without the consent or acquiescence of the
Company of any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company, such appointment shall not
have been vacated; or
5. Any declared default of the Company under any Senior
Indebtedness that gives the holder thereof the right to accelerate such Senior
Indebtedness, and such Senior Indebtedness is in fact accelerated by the holder
thereof if such default is not cured by the Company within thirty (30) days
after written notice has been given by the holder thereof to the Company of such
default.

The obligations of the Company under this Note may not be
assumed by a third party. This Note shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns.

This Note may be modified, amended or terminated only by a
written instrument signed by the Company and the Majority Holders.

The Company hereby waives notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor and all other
notices or demands relative to this instrument.  No delay or omission on the
part of a Holder hereof in exercising any right hereunder shall operate as a
waiver of such right or of any other rightunder this Note.

Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered personally or by commercial delivery service, or mailed by registered
or certified mail (return receipt requested) or sent via facsimile (with
acknowledgement of complete transmission) to the parties at the following
addresses or at such other address as shall be given in writing by a party to
the other parties:

If to Company:

If to Holder:

This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, without giving effect to
principles of conflicts of law.

In no event whatsoever shall the amount paid, or agreed to be
paid, to Holder for the use, forbearance or detention of money to be loaned
hereunder or otherwise, for the performance or payment of any covenant or
obligation contained herein, exceed the maximum amount permissible under
applicable California law.  If from any circumstance whatsoever fulfillment of
any provision hereof exceeds the limit of validity prescribed by law, then
ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if from any such circumstance Holder shall ever receive
any amounts characterized as interest under this Note or otherwise an amount
that would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal, such excess shall be refunded to the
Company.

The parties hereto agree that all actions or proceedings
arising in connection with this Agreement shall be tried and litigated
exclusively in the State and Federal courts located in the State of California.
The aforementioned choice of venue is intended by the parties to be mandatory
and not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this paragraph.  Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the State and Federal courts
located in the State of California shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement.  Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement.  Any final judgment
rendered against a party in any action or proceeding shall be conclusive as to
the subject of such final judgment and may be enforced in other jurisdictions in
any manner provided by law.





[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]





CAPTIVA SOFTWARE CORPORATION,

a California corporation

By:____________________________

Reynolds C. Bish,

President and Chief Executive Officer

Accepted and Agreed:

HOLDER

By:  _________________________

Name:  ______________________

Title:  ______________________

---



Exhibit B-2

THE SECURITIES EVIDENCED BY THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THE SECURITIES
EVIDENCED BY THIS NOTE MAY NOT BE OFFERED, SOLD OR TRANSFERRED FOR VALUE
DIRECTLY OR INDIRECTLY, IN THE ABSENCE OF SUCH REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAWS, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF THE
COMPANY.

THE SECURITIES REPRESENTED BY THIS NOTE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER OF A CERTAIN NOTE AND PREFERRED STOCK PURCHASE
AGREEMENT, DATED ON OR ABOUT AUGUST 1, 2000, AS AMENDED FROM TIME TO TIME.  THE
COMPANY WILL,UPON WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE.

AMENDED AND RESTATED

SUBORDINATED CONVERTIBLE PROMISSORY NOTE



San Diego, California

, 2002

This Amended and Restated Subordinated Convertible Promissory
Note (this "Note"), dated as of             2002,
amends, re-evidences, restates, and supercedes in full, but does not in any way
satisfy nor discharge the outstanding indebtedness, if any, owed under that
certain Senior Subordinated Secured Convertible Promissory Note dated
August             2000 in the original principal amount of [Amount in Words] Dollars
[($amount)] made by the undersigned (the "Company") in
favor of , or its registered assigns (the
"Holder").

For value received, the Company hereby promises to pay to the
Holder, or order, the principal amount of             
dollars ($            ), plus interest accrued
thereon.

This Note is one of a series of promissory notes issued by
the Company pursuant to that certain Note and Preferred Stock Purchase Agreement
dated August 1, 2000, as amended by Amendment No. 1 thereto dated March 4, 2002
(the "Note Purchase Agreement") to the holders of such
notes in the aggregate principal amount of up to $             
, which notes together are designated
the "New 2000 Notes."

This Note shall bear six percent (6%) simple interest
per annum (calculated on a 365-day year, actual days elapsed) or the maximum
rate permissible by law (which under the laws of the State of California shall
be deemed to be the laws relating to permissible rates of interest on commercial
loans), whichever is less.  Interest shall be due and payable, in cash or cash
equivalents, quarterly in arrears not later than the first day of each calendar
quarter for the preceding quarter.

Unless earlier converted as provided below, the Company shall
pay the unpaid principal amount plus accrued but unpaid interest on the unpaid
principal amount in full on             2007.

At any time prior to the termination of that certain
Agreement and Plan of Merger and Reorganization by and among ActionPoint, Inc.,
Condor Acquisition Corp. and the Company dated March 4, 2002 (the
"Merger Agreement"), upon three (3) days prior written
notice to the Company, the Holder may convert, effective as of the Closing (as
defined in the Merger Agreement), the entire outstanding principal balance of
this Note and all accrued but unpaid interest hereunder into shares of the
Company's common stock (the "Conversion") at a
conversion price per share calculated as set forth below (the
"Conversion Price"); provided, however, that if
the Effective Time (as defined in the Merger Agreement) does not occur, the
Conversion shall not be deemed to occur.

Immediately upon the Conversion, all amounts due hereunder
shall be deemed fully satisfied and paid in full, and the Company will be
forever released from its obligations and liabilities under this Note.

This Note may be transferred only upon surrender of the
original Note for registration of transfer, duly endorsed, or accompanied by a
duly executed written instrument of transfer in form satisfactory to the
Company.  Thereupon, a new promissory note for the same principal amount and
interest will be issued to, and registered in the name of, the transferee.
Interest and principal are payable only to the registered holder of this
Note.

This Note may be prepaid at any time and from time to time,
in whole or in part, without penalty, subject to the written concurrence of the
holders of the Senior Indebtedness (as defined below).  All payments with
respect to this Note shall be credited first to the payment of accrued and
unpaid interest payable hereunder and then to the repayment of principal.

The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of the Senior Indebtedness (as defined
below).

(a)	Conversion Price.  The Conversion Price shall
be an amount equal to $1.00 multiplied by the quotient, rounded to the fifth
decimal, obtained by dividing (A) the aggregate outstanding principal amount of
the New Notes (as defined in the Note Purchase Agreement) plus any accrued but
unpaid interest thereunder by (B) the product of (x) 4.0 multiplied by (y) the
Company Fully Diluted Capitalization.

(b)	Company Fully Diluted Capitalization.  As used
in this Note, the term "Company Fully Diluted
Capitalization" shall mean the sum of (A) the number of shares of
the Company's common stock issued and outstanding immediately prior to the
Closing and (B) the number of shares of the Company's common stock issuable upon
exercise, conversion or exchange of all rights to acquire shares of the
Company's common stock issued and outstanding as of immediately prior to the
Closing, other than shares of the Company's common stock issuable upon exercise
of the New Notes and excluding the number of shares of the Company's common
stock issuable upon exercise of stock options issued and outstanding under the
Company's 2002 Equity Incentive Plan.

(c)	Senior Indebtedness.As used in this
Note, the term "Senior Indebtedness" shall mean the
principal of and unpaid accrued interest on (i) all indebtedness, currently
existing or hereafter arising, of the Company to banks, insurance companies or
other financial institutions regularly engaged in the business of lending money,
which is for money borrowed by the Company (whether or not secured), and (ii)
any such indebtedness or any debentures, notes or other evidence of indebtedness
issued in exchange for such Senior Indebtedness.

(d)	Effect of Subordination.

1. No payment on account of principal of or interest on
this Note shall be made, and no such payment shall be required or accepted by
Holder, if, at the time of such payment or immediately after giving effect
thereto, there shall exist under any Senior Indebtedness or any agreement
pursuant to which any Senior Indebtedness is issued, any default or any
condition, event or act, which with notice or lapse of time, or both, would
constitute a default.  Should the Holder of this Note, while the Company is so
in default and after being notified by the holder of the Senior Indebtedness of
the default, receive any such payment, or should Holder receive any distribution
in bankruptcy, dissolution, or similar insolvency proceedings in regard to the
Company, Holder will hold such payment or distribution in trust for the holder
of the Senior Indebtedness and will pay over such amounts to such holder to
apply to the Senior Indebtedness until the same is paid in full.
2. Subject to the rights of the Senior Indebtedness in
paragraph (b)(i) hereof, nothing contained in this Note shall impair, as between
the Company and the Holder, the obligation of the Company, subject to the terms
and conditions hereof, to pay to the Holder the principal hereof and interest
hereon as and when the same become due and payable, or shall prevent the Holder
of this Note, upon default hereunder, from exercising all rights, powers and
remedies otherwise provided herein or by applicable law.

(e)	Undertaking.By its acceptance of
this Note, the Holder agrees to execute and deliver such documents as may be
reasonably requested from time to time by the Company or the lender of any
Senior Indebtedness in order to implement the foregoing provisions.

In the event funds are not available to pay off the entire
outstanding principal and accrued interest thereon, under all of the New 2000
Notes, each holder of a New 2000 Note shall be entitled to receive an amount
equal to the aggregate amount available for repayment multiplied by a fraction
the numerator of which is the principal amount outstanding under such holder's
New 2000 Note and the denominator of which is the aggregate principal amount
outstanding under all of the New 2000 Notes.

If any of the events specified in paragraphs (i) through (v)
below shall occur (herein individually referred to as an "Event of
Default"), the holders of the New 2000 Notes representing at least
fifty percent (50%) of the aggregate principal amount of all of the New 2000
Notes then outstanding (the "Majority Holders") may, so
long as such condition exists, declare the entire principal and unpaid accrued
interest hereon immediately due and payable by notice in writing to the
Company.

1. Default in the payment of the principal and unpaid
accrued interest of this Note when due and payable if such default is not cured
by the Company within twenty (20) days after the Majority Holders have given the
Company written notice of such default;
2. Breach by the Company of any (a) representation or
warranty when made or (b) covenant, agreement, or other provision, which breach
is not cured within thirty (30) days after the Majority Holders have given
written notice to the Company, contained in this Note or the Note Purchase
Agreement;
3. The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under the
Federal Bankruptcy Act, or any other applicable federal or state law, or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee, or other similar official of the
Company, or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the taking or corporate action by
the Company in furtherance of any such action;
4. If, within sixty (60) days after the commencement of an
action against the Company (and service of process in connection therewith on
the Company) seeking any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such action shall not have been resolved in favor of the Company or
all orders or proceedings thereunder affecting the operations thereunder
affecting the operations or the business of the Company stayed, or if the stay
of any such order or proceeding shall thereafter be set aside, or if, within
sixty (60) days after the appointment without the consent or acquiescence of the
Company of any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company, such appointment shall not
have been vacated; or
5. Any declared default of the Company under any Senior
Indebtedness that gives the holder thereof the right to accelerate such Senior
Indebtedness, and such Senior Indebtedness is in fact accelerated by the holder
thereof if such default is not cured by the Company within thirty (30) days
after written notice has been given by the holder thereof to the Company of such
default.

The obligations of the Company under this Note may not be
assumed by a third party. This Note shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns.

This Note may be modified, amended or terminated only by a
written instrument signed by the Company and the Majority Holders.

The Company hereby waives notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor and all other
notices or demands relative to this instrument.  No delay or omission on the
part of a Holder hereof in exercising any right hereunder shall operate as a
waiver of such right or of any other rightunder this Note.

Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered personally or by commercial delivery service, or mailed by registered
or certified mail (return receipt requested) or sent via facsimile (with
acknowledgement of complete transmission) to the parties at the following
addresses or at such other address as shall be given in writing by a party to
the other parties:

If to Company:

If to Holder:

This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, without giving effect to
principles of conflicts of law.

In no event whatsoever shall the amount paid, or agreed to be
paid, to Holder for the use, forbearance or detention of money to be loaned
hereunder or otherwise, for the performance or payment of any covenant or
obligation contained herein, exceed the maximum amount permissible under
applicable California law.  If from any circumstance whatsoever fulfillment of
any provision hereof exceeds the limit of validity prescribed by law, then
ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if from any such circumstance Holder shall ever receive
any amounts characterized as interest under this Note or otherwise an amount
that would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal, such excess shall be refunded to the
Company.

The parties hereto agree that all actions or proceedings
arising in connection with this Agreement shall be tried and litigated
exclusively in the State and Federal courts located in the State of California.
The aforementioned choice of venue is intended by the parties to be mandatory
and not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this paragraph.  Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the State and Federal courts
located in the State of California shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement.  Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement.  Any final judgment
rendered against a party in any action or proceeding shall be conclusive as to
the subject of such final judgment and may be enforced in other jurisdictions in
any manner provided by law.



[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]



CAPTIVA SOFTWARE CORPORATION,

a California corporation,

By: _________________

Reynolds C. Bish,

President and Chief Executive Officer

Accepted and Agreed:

HOLDER

By:_______________________

Name:  ________________________

Title:  _______________________

---

ANNEX J

FORM OF NOTE CONVERSION AGREEMENT PURSUANT TO AMENDMENT NO. 1
TO NOTE AND PREFERRED STOCK PURCHASE AGREEMENT

March 4, 2002





Captiva Software Corporation
10145 Pacific Heights Blvd.
San Diego, CA 92121

Attention: Rick Russo, Chief Financial Officer

Re:	Note Conversion Agreement

Ladies and Gentlemen:

Reference is hereby made to that certain Note and Preferred
Stock Purchase Agreement dated August 1, 2000, as amended by Amendment
No. 1 thereto dated March 4, 2002 (the "Purchase Agreement") by and between
the investors listed on Exhibits A-1 and A-2 of the Purchase Agreement and
Captiva Software Corporation (the "Company"). Unless otherwise defined herein or
the context otherwise requires, capitalized terms used herein have the meanings
provided in the Purchase Agreement. Pursuant to the Purchase Agreement, the
Company executed a promissory note (the "Note") in my favor, dated August 1,
2000 and amended and restated as of the Closing (as defined in that certain
Agreement and Plan of Merger and Reorganization by and among the Company,
ActionPoint, Inc., a Delaware corporation
("ActionPoint"), and Condor Merger Corp., a
California corporation and wholly owned subsidiary of ActionPoint, dated March
4, 2002 (the "Merger Agreement")). The aggregate unpaid principal amount and
interest due under the terms of the Note as of the Closing, shall be referred to
herein as the "Aggregate Borrowed Amount."

1.	Notice of Conversion

I hereby notify the Company pursuant to the terms of the
Note that I elect to convert the entire Aggregate Borrowed Amount at the
Conversion Rate set forth in the Note into shares of common stock of the Company
(the "Shares"). Such conversion shall be contingent upon the occurrence of, and
effective immediately prior to, the Closing (as defined in the Merger
Agreement). I hereby acknowledge that such conversion is entirely contingent
upon the occurrence of the Closing (as defined in the Merger Agreement).

2.	Representations and Obligations

By signing below, the Company hereby represents and
warrants that the Shares, when issued to me in accordance herewith, will be
fully paid and nonassessable and free from all taxes, liens and charges. The
Company agrees to provide me with copies of any and all agreements and documents
sent to other holders of the Company's common stock at the same time any such
agreements or documents are provided to such other holders of the Company's
common stock, and shall promptly provide me with any agreements or documents
previously provided to such holders of the Company's common stock in connection
with the transactions contemplated by the Merger Agreement.

The certificates ("Certificates") for the Shares shall
promptly be issued in my name and delivered to me, at the following address:

_________________________________

_________________________________

_________________________________

3.	Release of Claims

Contingent and effective upon the issuance by the Company
of the Shares and the occurrence of the Closing (as defined in the Merger
Agreement), and only then, I hereby transfer, assign and convey to the Company,
its successors and assigns, all of my right, title and interest in and to any
and all claims, actions, causes of action, liens (including, without limitation,
any carrier liens, possessor liens or warehousemans' liens), debts, liabilities
and costs, fees and expenses of whatsoever kind and nature that I and my
successors and assigns have against the Company in connection with or arising
out of the Purchase Agreement, whether known or unknown, whether asserted or
unasserted, whether fixed or contingent, owned, held or claimed from the
beginning of time through and including the Closing, as defined in the Merger
Agreement (collectively, the "Claim"); provided,however, that
notwithstanding the foregoing the term "Claim" shall specifically exclude any
unknown claim alleging fraud (but only to the extent it alleges fraud) and any
claim as an equity holder of the Company. I represent that I have not
transferred any portion of my Claim nor is such Claim subject to any other
transfer.

In witness whereof, I have executed this Note Conversion
Agreement as of the date first above written.



By:

Name:

Title:



Acknowledged and Agreed:

CAPTIVA SOFTWARE CORPORATION



By:

Name:	Rick Russo
   Title:	Chief Financial Officer

---

ANNEX K

SECOND AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF CAPTIVA SOFTWARE CORPORATION

a California Corporation

The undersigned Reynolds C. Bish and Rick E. Russo hereby
certify that:

ONE: They are the duly elected and acting President
and Secretary, respectively, of said corporation.

TWO: The Amended and Restated Articles of
Incorporation of said corporation shall be amended and restated to read in full
as follows:

ARTICLE I.

The name of this corporation is Captiva Software
Corporation.

ARTICLE II.

The purpose of this corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated by
the California Corporations Code.

ARTICLE III.

A.	Classes of Stock. This corporation is authorized to
issue two classes of stock to be designated, respectively, "Common
Stock" and "Preferred Stock." The total number of shares
which the corporation is authorized to issue is Four Hundred Forty Million
(440,000,000) shares. Four Hundred One Million Five Hundred Eleven Thousand Four
Hundred Thirty-Six (401,511,436) shall be Common Stock and Thirty-Eight Million
Four Hundred Eighty-Eight Thousand Five Hundred Sixty-Four (38,488,564) shares
shall be Preferred Stock. The Preferred Stock shall be issued from time to time
in one or more series. Two Million Eight Hundred Seventy-Three Thousand Five
Hundred Sixty-Four (2,873,564) shares are designated "Series A Preferred
Stock," One Million One Hundred Fifteen Thousand (1,115,000) shares are
designated "Series B Preferred Stock," Four Million Five Hundred
Thousand (4,500,000) shares are designated "Series C Preferred
Stock," One Million (1,000,000) shares are designated "Series D
Preferred Stock," and Twenty-Nine Million (29,000,000) shares are
designated "Series E Preferred Stock."

B.	Rights, Preferences and Restrictions of Preferred
Stock. The rights, preferences, restrictions and other matters relating to
the Preferred Stock are as follows:

1.	Dividend Provisions.

(a)	The holders of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D and Series E
Preferred Stock (collectively the "Series Preferred") shall be
entitled to receive dividends, out of any assets legally available therefor,
prior and in preference to any declaration or payment of any dividend (payable
other than in Common Stock or other securities and rights convertible into or
entitling the holder thereof to receive, directly or indirectly, additional
shares of Common Stock of this corporation) on the Common Stock of this
corporation, at the rate of $0.07 per share of Series A Preferred Stock per
annum, $0.08 per share of Series B Preferred Stock per annum, $0.09 per share of
Series C Preferred Stock per annum, $0.13 per share of Series D Preferred Stock
per annum and $0.07 per share of Series E Preferred Stock per annum
("Preferred Dividend Preference") payable when, as and if declared
by the Board of Directors. Such dividends shall not be cumulative. No cash
dividend shall be declared or paid with respect to any of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock or Series E Preferred Stock unless at the same time a like proportionate
cash dividend for the same dividend period, ratably in proportion to the
respective annual dividend rates set forth above, is declared and paid with
respect to each of the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock, the Series D Preferred Stock and the Series E
Preferred Stock.

(b)	After paying the full Preferred Dividend
Preference in any calendar year, whenever this corporation declares a further
dividend in such calendar year, the holders of Common Stock and the holders of
the Series Preferred shall be entitled to receive dividends ratably based on the
number of shares of Common Stock held by each (assuming conversion of all such
Series Preferred).

2.	Liquidation Preference.

(a)	In the event of any liquidation, dissolution or
winding up of this corporation, either voluntary or involuntary, the holders of
the Series Preferred shall be entitled to receive, prior to and in preference to
any distribution of any of the assets of this corporation to the holders of
Common Stock by reason of their ownership thereof, an amount per share equal to
the sum of: (i) $0.87 for each outstanding share of Series A Preferred Stock
(subject to appropriate adjustments for stock splits, stock dividends,
combinations or other recapitalizations and hereafter referred to as the
"Original Series A Issue Price"); (ii) $1.00 for each outstanding
share of Series B Preferred Stock (subject to appropriate adjustments for stock
splits, stock dividends, combinations or other recapitalizations and hereafter
referred to as the "Original Series B Issue Price"); (iii) $1.00
for each outstanding share of Series C Preferred Stock (subject to appropriate
adjustments for stock splits, stock dividends, combinations or other
recapitalizations and hereafter referred to as the "Original Series C
Issue Price"); (iv) $1.30 for each outstanding share of Series D
Preferred Stock (subject to appropriate adjustments for stock splits, stock
dividends, combinations or other recapitalizations and hereafter referred to as
the "Original Series D Issue Price"); (v) $0.01 for each
outstanding share of Series E Preferred Stock (subject to appropriate
adjustments or stock splits, stock dividends, combinations or other
recapitalizations); and (vi) an amount equal to declared but unpaid dividends on
such shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series E Preferred Stock, as
applicable. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series Preferred shall be insufficient to
permit the payment to such holders of the full aforesaid preferential amounts,
then the entire assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of the Series
Preferred in proportion to the aggregate liquidation preferences of the
respective series, and ratably among the holders of that series in proportion to
the amount of such stock owned by each such holder.

(b)	After the distribution described in subsection
(a) above has been paid, the remaining assets of the corporation legally
available for distribution to shareholders, if any, shall be distributed among
the holders of the Series Preferred and Common Stock pro rata based on the
number of shares of Common Stock held by each (assuming conversion of all such
Series Preferred) until such time as the holders of the Series Preferred have
received pursuant to Section 2(a) above and this Section 2(b) an aggregate
amount per share of Series Preferred equal to three (3) times the applicable
Original Issue Price (or in the case of the Series E Preferred, $0.01 as set
forth in Section 2(a)) (as adjusted for any stock, dividends, combinations,
splits, recapitalizations and the like with respect to such shares); thereafter
the remaining assets of the corporation legally available for distribution, if
any, shall be distributed ratably to the holders of the Common Stock.

(c) 	A consolidation or merger of this corporation
with or into any other corporation or corporations, or a sale, conveyance or
disposition of all or substantially all of the assets of this corporation or the
effectuation by the corporation of a transaction or series of related
transactions in which more than 50% of the voting power of the corporation is
disposed of (excluding the issuance of Series A Preferred Stock pursuant to the
Series A Preferred Stock Purchase Agreement, the issuance of Series B Preferred
Stock pursuant to the Series B Preferred Stock Purchase Agreement, the issuance
of Series C Preferred Stock pursuant to a Series C Preferred Stock Purchase
Agreement, the issuance of the Series D Preferred Stock pursuant to a Series D
Preferred Stock Purchase Agreement and the issuance of the Series E Preferred
Stock pursuant to a Series E Preferred Stock Purchase Agreement), shall be
deemed to be a liquidation, dissolution or winding up within the meaning of this
section; provided, however, that the acquisition of FormWare Corporation
pursuant to that certain Agreement and Plan of Reorganization, dated July 24,
1998, among this corporation, Wheb Acquisition Corporation and FormWare
Corporation, shall not be deemed to be a liquidation, dissolution or winding up
within the meaning of this section.

3.	Redemption.

(a)	On or at any time after the later of (i) June 30,
2003 or (ii) the repayment of all amounts outstanding under those certain
Amended and Restated Senior Subordinated Secured Promissory Notes and Senior
Subordinated Secured Convertible Promissory Notes of this corporation
(collectively the "Senior Notes") issued pursuant to that certain
Note and Common Stock Purchase Agreement, dated on or about July 2000 (the
"2000 Note Purchase Agreement"), among this corporation and the
investors listed therein, upon the receipt by this corporation of the written
request of the holders of a majority of the then outstanding Series Preferred
treated as a single class (a "Redemption Request"), this
corporation shall, to the extent it may lawfully do so, redeem (i) all of the
shares of Series A Preferred Stock then outstanding by paying in cash therefor a
sum per share equal to the Original Series A Issue Price plus an amount equal to
declared but unpaid dividends on such shares (such total amount is hereinafter
referred to as the "Series A Redemption Price"); (ii) all of the
shares of Series B Preferred Stock then outstanding by paying in cash therefor a
sum per share equal to the Original Series B Issue Price plus an amount equal to
declared but unpaid dividends on such shares (such total amount is hereinafter
referred to as the "Series B Redemption Price"); (iii) all of the shares of
Series C Preferred Stock then outstanding by paying in cash therefor a sum per
share equal to the Original Series C Issue Price plus an amount equal to
declared but unpaid dividends on such shares (such total amount is hereinafter
referred to as the "Series C Redemption Price"); (iv) all of the shares of
Series D Preferred Stock then outstanding by paying in cash therefor a sum per
share equal to the Original Series D Issue Price plus an amount equal to
declared but unpaid dividends on such shares (such total amount is hereinafter
referred to as the "Series D Redemption Price"); and (v) all of the shares of
Series E Preferred Stock then outstanding by paying in cash therefor a sum per
share equal to the $0.01 (subject to appropriate adjustments or stock splits,
stock dividends, combinations or other recapitalizations) plus an amount equal
to declared but unpaid dividends on such shares (such total amount is
hereinafter referred to as the "Series E Redemption Price"). Upon the receipt of
a Redemption Request, this corporation shall either (A) redeem all of the shares
of the Series Preferred within ninety (90) days of the corporation's receipt of
such Redemption Request or (B) redeem all of the shares of the Series Preferred,
in three (3) equal semi-annual installments beginning on the anniversary of the
Purchase Date (as defined in subsection 4(c)(i)(A) below) of the Series C
Preferred Stock in the period immediately following the receipt of the
Redemption Request.

(b)	With respect to any redemption to be conducted
in installments pursuant to subsection 3(a), the corporation shall effect such
redemption pro rata according to the number of shares of Series Preferred held
by each holder of the corporation's Preferred Stock.

(c)	At least 20 but no more than 60 days prior to
the date fixed for any redemption of Series Preferred (the "Redemption Date"),
written notice shall be mailed, first class postage prepaid to each holder of
record (at the close of business on the business day next preceding the day on
which notice is given) of the Series Preferred to be redeemed at the address
last shown on the records of this corporation for such holder or given by the
holder to this corporation for the purpose of notice or if no such address
appears or is given at the place where the principal executive office of this
corporation is located, notifying such holder of the redemption to be effected,
specifying the number of shares to be redeemed from such holder, the Redemption
Date, the Series A Redemption Price, Series B Redemption Price, Series C
Redemption Price, Series D Redemption Price or Series E Redemption Price as
applicable, the place at which payment may be obtained and the date on which
such holder's Conversion Rights (as hereinafter defined) as to such shares
terminate and calling upon such holder to surrender to this corporation, in the
manner and at the place designated, his certificate or certificates representing
the shares to be redeemed (the "Redemption Notice"). Except as provided in
subsection 3(d) and except as prohibited by applicable California corporate law,
on or after the Redemption Date, each holder of Preferred Stock to be redeemed
shall surrender to this corporation the certificate or certificates representing
such shares, in the manner and at the place designated in the Redemption Notice,
and thereupon the Series A Redemption Price, Series B Redemption Price, Series C
Redemption Price, Series D Redemption Price or Series E Redemption Price as
applicable, of such shares shall be payable to the order of the person whose
name appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be cancelled. In the event that less than all the
shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.

(d)	From and after the Redemption Date, unless
there shall have been a default in payment of the Series A Redemption Price,
Series B Redemption Price, Series C Redemption Price or Series D Redemption
Price as applicable, all rights of the holders of such shares as holders of
Preferred Stock (except the right to receive the Series A Redemption Price,
Series B Redemption Price, Series C Redemption Price, Series D Redemption Price
or Series E Redemption Price as applicable, without interest upon surrender of
their certificate or certificates) shall cease with respect to such shares, and
such shares shall not thereafter be transferred on the books of this corporation
or be deemed to be outstanding for any purpose whatsoever. If the funds of the
corporation legally available for redemption of shares of Preferred Stock on any
Redemption Date are insufficient to redeem the total number of shares of Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock to be redeemed on such date, those
funds which are legally available will be used to redeem the maximum possible
number of such shares ratably among the holders of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock in proportion to the respective Series A Redemption
Price, Series B Redemption Price, Series C Redemption Price, Series D Redemption
Price and Series E Redemption Price and ratably among the holders of each series
in proportion to the amount of such stock owned by each such holder. The shares
of Preferred Stock not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein. At any time thereafter when additional
funds of the corporation are legally available for the redemption of shares of
Preferred Stock, such funds will immediately be used to redeem the balance of
the shares which the corporation has become obligated to redeem on any
Redemption Date but which it has not redeemed.

4.	Conversion. The holders of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):

(a)	Right to Convert.

(i)	Subject to subsection 4(c), each share of Series
Preferred shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share and prior to the close of business on
any Redemption Date as may have been fixed in any Redemption Notice with respect
to such share, at the office of this corporation or any transfer agent for the
particular series of Preferred Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (A) the
Original Series A Issue Price for each share of Series A Preferred Stock; (B)
the Original Series B Issue Price for each share of Series B Preferred Stock;
(C) the Original Series C Issue Price for each share of Series C Preferred
Stock; (D) the Original Series D Issue Price for each share of Series D
Preferred Stock; and (E) $0.30 for each share of Series E Preferred Stock
(subject to appropriate adjustments for stock splits, stock dividends,
combinations or other recapitalizations and hereafter referred to as the
"Original Series E Issue Price"), plus all declared but unpaid
dividends thereon for each share of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock or Series E Preferred
Stock by the applicable Conversion Price at the time in effect for such share.
The initial Conversion Price per share for shares of Series A Preferred Stock
shall be the Original Series A Issue Price, the initial Conversion Price per
share for shares of Series B Preferred Stock shall be the Original Series B
Issue Price, the initial Conversion Price per share for shares of Series C
Preferred Stock shall be the Original Series C Issue Price, the initial
Conversion Price per share for shares of Series D Preferred Stock shall be the
Original Series D Issue Price; and the initial Conversion Price per share for
shares of Series E Preferred Stock shall be the Original Series E Issue Price;
provided, however, that the Conversion Price for the Series Preferred shall be
subject to adjustment as set forth in subsection 4(c).

(ii)	In the event of a call for redemption of any
shares of the Series Preferred pursuant to Section 3 hereof, the Conversion
Rights shall terminate as to the shares designated for redemption at the close
of business on the Redemption Date, unless default is made in payment of the
Series A Redemption Price, Series B Redemption Price, Series C Redemption Price,
Series D Redemption Price or Series E Redemption Price as applicable, in which
case the Conversion Rights shall terminate on the date such payment of the
Series A Redemption Price, Series B Redemption Price, Series C Redemption Price,
Series D Redemption Price or Series E Redemption Price as applicable, is
made.

(iii)	Each share of Series Preferred shall
automatically be converted into shares of Common Stock at the Conversion Price
at the time in effect for such shares immediately upon the earlier of (A) the
consummation of the corporation's sale of its Common Stock pursuant to a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (B) the date upon which the corporation
obtains the consent of the holders of a majority of the then outstanding shares
of Series Preferred treated as a single class on an as converted basis.

(b)	Mechanics of Conversion. Before any holder of
Series Preferred shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of this corporation or of any transfer agent for the
particular series of Preferred Stock and shall give written notice by mail,
postage prepaid, to this corporation at its principal corporate office, of the
election to convert the same and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be issued.
This corporation shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Series Preferred or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series Preferred to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offer of securities registered pursuant to the
Securities Act, the conversion may, at the option of any holder tendering shares
of Series Preferred for conversion, be conditioned upon the closing with the
underwriter of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock issuable upon such conversion
of the Series Preferred shall not be deemed to have converted such Series
Preferred until immediately prior to the closing of such sale of securities.

(c)	Conversion Price Adjustments of Preferred
Stock. The Conversion Price of the Series Preferred shall be subject to
adjustment from time to time as follows:

(i)	A.Upon each issuance by the corporation
of any Additional Stock (as defined in subsection 4(c)(ii) below), after the
date upon which any shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock or Series E Preferred
Stock were first issued (the "Purchase Date" with respect to such
series), without consideration or for a consideration per share less than the
Conversion Price for the Series A Preferred Stock, the Conversion Price for the
Series B Preferred Stock, the Conversion Price for the Series C Preferred Stock,
the Conversion Price for the Series D Preferred Stock or the Conversion Price
for the Series E Preferred Stock in effect immediately prior to the issuance of
such Additional Stock, the Conversion Price for the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or
Series E Preferred Stock as the case may be, in effect immediately prior to each
such issuance shall forthwith (except as otherwise provided in this clause (i))
be adjusted to a price determined by multiplying the applicable Conversion Price
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issuance (including, without
limitation, the number of shares of Common Stock issuable upon the conversion of
the Series Preferred) plus the number of shares of Common Stock which the
aggregate consideration received by the corporation for such issuance would
purchase at such Conversion Price; and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issuance
(including, without limitation, the number of shares of Common Stock issuable
upon the conversion of the Series Preferred) plus the number of shares of such
Additional Stock.

B.	No adjustment of the Conversion Price for the
Series Preferred shall be made in an amount less than one cent per share,
provided that any adjustments which are not required to be made by reason of
this sentence shall be carried forward and shall be either taken into account in
any subsequent adjustment made prior to three (3) years from the date of the
event giving rise to the adjustment being carried forward, or shall be made at
the end of three (3) years from the date of the event giving rise to the
adjustment being carried forward. Except to the limited extent provided for in
subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant
to this subsection 4(c)(i) shall have the effect of increasing the Conversion
Price above the Conversion Price in effect immediately prior to such
adjustment.

C.	In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
before deducting any reasonable discounts, commissions or other expenses
allowed, paid or incurred by this corporation for any underwriting or otherwise
in connection with the issuance and sale thereof.

D.	In the case of the issuance of the Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as determined by the
Board of Directors irrespective of any accounting treatment.

E.	In the case of the issuance (whether before, on
or after the applicable Purchase Date) of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this subsection 4(c)(i) and subsection 4(c)(ii):

1.	The aggregate maximum number of shares of Common
Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including, without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subsections
4(c)(i)(C) and (c)(i)(D)), if any, received by the corporation upon the issuance
of such options or rights plus the exercise price provided in such options or
rights (without taking into account potential antidilution adjustments) for the
Common Stock covered thereby.

2.	The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange (assuming the satisfaction
of any conditions to convertibility or exchangeability, including, without
limitation, the passage of time, but without taking into account potential
antidilution adjustments) for any such convertible or exchangeable securities or
upon the exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration equal to
the consideration, if any, received by the corporation for any such securities
and related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the additional consideration, if any, to be
received by the corporation (without taking into account potential antidilution
adjustments) upon the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each case to be
determined in the manner provided in subsections 4(c)(i)(C) and (c)(i)(D)).

3.	In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to this
corporation upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable securities, including, without
limitation, a change resulting from the antidilution provisions thereof, the
applicable Conversion Price of the Preferred Stock to the extent in any way
affected by or computed using such options, rights or securities, shall be
recomputed to reflect such change, but no further adjustment shall be made for
the actual issuance of Common Stock or any payment of such consideration upon
the exercise of any such options or rights or the conversion or exchange of such
securities.

4.	Upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the applicable Conversion Price of each series of the Series
Preferred, to the extent in any way affected by or computed using such options,
rights or securities or options or rights related to such securities, shall be
recomputed to reflect the issuance of only the number of shares of Common Stock
(and convertible or exchangeable securities which remain in effect) actually
issued upon. the exercise of such options or rights, upon the conversion or
exchange of such securities or upon the exercise of the options or rights
related to such securities.

5.	The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to subsections
4(c)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in either subsection
4(c)(i)(E)(3) or (4).

(ii)	"Additional Stock" shall mean any
shares of Common Stock issued (or deemed to have been issued pursuant to
subsection 4(c)(i)(E)) by this corporation after the applicable Purchase Date
other than:

A.	shares of Common Stock issued pursuant to a
transaction described in subsection 4(c)(iii) hereof; or

B.	shares of Common Stock issued upon conversion of
the Series Preferred; or

C.	shares of Common Stock issuable or issued to
employees, consultants or directors of this corporation, or to vendors,
suppliers, customers or other persons or organizations with which the
corporation has a commercial relationship; or

D.	shares of Common Stock issued or issuable (I) in
a public offering before or in connection with which all outstanding shares of
the Series Preferred will be converted to Common Stock or (II) upon exercise of
warrants or rights granted to underwriters in connection with such a public
offering; or

E.	shares of the corporation's Common Stock issued
to holders of FormWare Corporation's common stock pursuant to that certain
Agreement and Plan of Reorganization, dated July 24, 1998, among this
corporation, Wheb Acquisition Corporation and FormWare Corporation (the
"Merger Agreement"), and any shares of the corporation's Common
Stock issued to holders of options and warrants to purchase shares of FormWare's
common stock assumed by the corporation pursuant to the Merger Agreement; or

F.	shares of Common Stock issued pursuant to that
certain Note and Common Stock Purchase Agreement dated as of December 30, 1998,
as amended, (the "1998 Note Purchase Agreement") among the Company and the other
parties thereto or shares of Common Stock issued pursuant to those certain notes
which have been issued pursuant to the 1998 Note Purchase Agreement; or

G.	shares of Common Stock issued or issuable
pursuant to that certain Amendment No. 1 to the Note and Preferred Stock
Purchase Agreement dated as of March 4, 2000 (the "2000 Amendment") or shares
of Common Stock issued or issuable pursuant to those certain notes which have
been issued pursuant to the 2000 Amendment; or

H.	shares of Common Stock issued pursuant to that
certain Note Conversion Agreement dated as of March 4, 2002 by and between the
Company and the investors listed on Exhibit A-1 of the 2000 Amendment.

(iii)	In the event that the corporation should at
any time or from time to time after the applicable Purchase Date fix a record
date for the effectuation of a split or subdivision of the outstanding shares of
Common Stock or the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the applicable Conversion Price for each series of the Series Preferred then in
effect shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be increased in
proportion to such increase of the aggregate of shares of Common Stock
outstanding and those issuable with respect to such Common Stock
Equivalents.

(iv)	If the number of shares of Common Stock
outstanding at any time after the applicable Purchase Date is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the applicable Conversion Price for each series
of the Series Preferred then in effect shall be appropriately increased so that
the number of shares of Common Stock issuable on conversion of each share of
such series shall be decreased in proportion to such decrease in outstanding
shares.

(d)	Other Distributions. In the event that this
corporation shall declare a distribution payable in securities of other persons,
evidences of indebtedness issued by this corporation or other persons, or assets
(excluding cash dividends) or options or rights not referred to in subsection
4(c)(iii), then, in each such case for the purpose of this subsection 4(d), the
holders of the Series Preferred shall be entitled to a proportionate share of
any such distribution as though they were the holders of the number of shares of
Common Stock of the corporation into which their shares of Series Preferred are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the corporation entitled to receive such distribution.

(e)	Recapitalizations. If at any time or from time
to time there shall be a recapitalization of the Common Stock (other than a
subdivision, combination or merger or sale of assets transaction provided for
elsewhere in this Section 4), provision shall be made so that the holders of the
Series Preferred shall thereafter be entitled to receive upon conversion of the
Series Preferred, the number of shares of stock or other securities or property
of the corporation or otherwise, to which a holder of Common Stock deliverable
upon conversion would have been entitled on such recapitalization. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 4 with respect to the rights of the holders of the Series
Preferred Stock after the recapitalization to the end that the provisions of
this Section 4 (including adjustment of the Conversion Price then in effect for
each series and the number of shares purchasable upon conversion of the Series
Preferred) shall be applicable after that event as nearly equivalent as may be
practicable.

(f)	No Impairment. This corporation shall not, by
amendment of its Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this corporation, but shall at all times in good faith assist in
the carrying out of all the provisions of this Section 4 and in the taking of
all such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series Preferred against impairment.

(g)	No Fractional Shares and Certificate as to
Adjustments.

(i)	No fractional shares shall be issued upon
conversion of the Series Preferred and the number of shares of Common Stock to
be issued shall be rounded to the nearest whole share. Whether or not fractional
shares are issuable upon such conversion shall be determined on the basis of the
total number of shares of Series Preferred the holder is at the time converting
into Common Stock and the number of shares of Common Stock issuable upon such
aggregate conversion.

(ii)	Upon the occurrence of each adjustment or
readjustment of the Conversion Price of the Series Preferred pursuant to this
Section 4, this corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series Preferred a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. This corporation shall, upon the written
request at any time of any holder of Series Preferred, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment
and readjustment, (B) the applicable Conversion Price at the time in effect, and
(C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
the applicable series of Series Preferred.

(h)	Notices of Record Date. In the event of any
taking by this corporation of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled to receive
any dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or other-wise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, this
corporation shall mail to each holder of Series Preferred at least 20 days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.

(i)	Reservation of Stock Issuable Upon Conversion.
This corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of the Series Preferred, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of Series Preferred; and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Series
Preferred, in addition to such other remedies as shall be available to the
holder of such shares of Series Preferred, this corporation shall take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.

(j)	Notices. Any notice required by the provisions
of this Section 4 to be given to the holders of shares of Series Preferred shall
be deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of this
corporation.

5.	Voting Rights.

(a)	General Voting Rights. The holder of each share of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock or Series E Preferred Stock shall have the right to one
vote for each share of Common Stock into which such Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or
Series E Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion basis being rounded to the nearest whole
share), and with respect to such vote, such holder shall have full voting rights
and powers equal to the voting rights and powers of the holders of Common Stock,
and shall be entitled, notwithstanding any provision hereof, to notice of any
shareholders' meeting in accordance with the By-laws of this corporation, and
shall be entitled to vote, together as a single class with holders of Common
Stock, with respect to any question upon which holders of Common Stock have the
right to vote, except for the election of directors as provided in subsection
5(b) below.

(b)	Election of Directors. Notwithstanding
subsection 5(a) above, the holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock voting
together as a separate class on an as converted basis, shall be entitled to
elect two (2) directors of the corporation, the holders of the Series E
Preferred Stock voting together as a separate class on an as converted basis,
shall be entitled to elect two (2) directors and the holders of Common Stock,
voting as a separate class, shall be entitled to elect three (3) directors. At
any meeting held for the purpose of electing or nominating directors, the
presence in person or by proxy of the holders of a majority of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock then outstanding, treated together as a single class on an as
converted basis, shall constitute a quorum of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
for the election or nomination of directors to be elected or nominated solely by
the holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock. At any meeting held for the
purpose of electing or nominating directors, the presence in person or by proxy
of the holders of a majority of the Series E Preferred Stock then outstanding,
treated together as a single class on an as converted basis, shall constitute a
quorum of the Series E Preferred Stock for the election or nomination of
directors to be elected or nominated solely by the holders of Series E Preferred
Stock. At any meeting held for the purpose of electing directors, the presence
in person or by proxy of the holders of a majority of the Common Stock then
outstanding shall constitute a quorum of the Common Stock for the election of
directors to be elected by the holders of Common Stock. A vacancy in any
directorship elected by the holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock as a
class shall be filled only by vote of the holders of such series of Preferred
Stock, a vacancy in any directorship elected by the holders of Series E
Preferred Stock voting together as a class shall be filled only by the vote of
the holders of such series of Preferred Stock and a vacancy in any directorship
elected by the holders of Common Stock voting together as a class shall be
filled only by the vote of the holders of Common Stock.

6.	Protective Provisions. Subject to the rights of
any series of Preferred Stock that may from time to time come into existence, so
long as shares of the Series A Preferred Stock and/or Series B Preferred Stock
and/or Series C Preferred Stock and/or Series D Preferred Stock are outstanding,
this corporation shall not without first obtaining the approval (by vote or
written consent, as provided by law) of the holders of at least a majority of
the then outstanding shares of the Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, voting together as
a single class on an as converted basis:

(a)	convey, or otherwise dispose of or encumber all
or substantially all of its property or business or merge into or consolidate
with any other corporation (other than a wholly owned subsidiary corporation) or
effect any transaction or series of related transactions in which more than 50%
of the voting power of the corporation is disposed of or effect any voluntary
liquidation, dissolution or winding up of the corporation (any such event
hereinafter referred to as a "Corporate Transaction"); or

(b)	alter or change the rights, preferences or
privileges of the Series Preferred; or

(c)	increase the authorized number of shares of the
Series Preferred or Common Stock; or

(d)	increase the number of directors to more than
seven (7); or

(e)	authorize, issue or sell any additional shares
of Preferred Stock; or

(f)	create any new class or series of stock or any
other securities convertible into equity securities of the corporation having a
preference over, or being on a parity with, the Series Preferred with respect to
voting, dividends or upon liquidation; or

(g)	enter into a transaction which will result in
this corporation incurring indebtedness not in the ordinary course of business
in excess of One Hundred Thousand Dollars ($100,000); or

(h)	enter into a transaction by which this
corporation acquires all or substantially all of the assets or stock of an
entity which transaction exceeds Five Hundred Thousand Dollars ($500,000);
or

(i)	enter into any agreements to make loans or
extend or guarantee credit in excess of Ten Thousand Dollars ($10,000) with any
employee, officer or director of this corporation or member of such employee's,
officer's or director's immediate family; or

(j)	adopt any material changes to the corporation's
Stock Option/Stock Issuance Plan, as amended, or adopt any other employee
incentive plan.

7.	Series E Protective Provisions. Subject to the
rights of any series of Preferred Stock that may from time to time come into
existence, so long as shares of the Series E Preferred are outstanding, this
corporation shall not without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of at least a majority in interest
of the then outstanding shares of the Series Preferred, voting together as a
single class on an as converted basis:

(a)	convey, or otherwise dispose of or encumber all
or substantially all of its property or business or merge into or consolidate
with any other corporation (other than a wholly owned subsidiary corporation) or
effect any Corporate Transaction; or

(b)	alter or change the rights, preferences or
privileges of the shares of the Series Preferred or the Senior Notes; or

(c)	increase the authorized number of shares of the
Series Preferred or Common Stock; or

(d)	increase the number of directors to more than
seven (7); or

(e)	authorize, issue or sell any additional shares
of Preferred Stock; or

(f)	create any new class or series of stock or any
other securities convertible into equity securities of the corporation having a
preference over, or being on a parity with, the Series Preferred with respect to
voting, dividends or upon liquidation; or

(g)	incur any new indebtedness of the corporation
that is senior to, or on parity with, the Senior Notes (except that the
corporation may make routine borrowings in the ordinary course of business and
consistent with past practices under its current line of credit with Imperial
Bank); or

(h)	enter into a transaction which will result in
this corporation incurring indebtedness not in the ordinary course of business
in excess of One Hundred Thousand Dollars ($100,000); or

(i)	enter into a transaction by which this
corporation acquires all or substantially all of the assets or stock of an
entity which transaction exceeds Five Hundred Thousand Dollars ($500,000);
or

(j)	enter into any agreements to make loans or
extend or guarantee credit in excess of Ten Thousand Dollars ($10,000) with any
employee, officer or director of this corporation or member of such employee's,
officer's or director's immediate family; or

(k)	adopt any material changes to the corporation's
Stock Option/Stock Issuance Plan, as amended, or adopt any other employee
incentive plan.

8.	Status of Converted or Redeemed Stock. In the
event any shares of the Series Preferred shall be redeemed or converted pursuant
to Section 3 or Section 4 hereof, the shares so converted or redeemed shall be
cancelled and shall not be issuable by the corporation. The Articles of
Incorporation of this corporation shall be appropriately amended to effect the
corresponding reduction in the corporation's authorized capital stock.

9.	Repurchase of Shares. In connection with
repurchases by this Corporation of its Common Stock pursuant to its agreements
with certain of the holders thereof, Sections 502 and 503 of the California
General Corporation Law shall not apply in whole or in part with respect to such
repurchases.

C.	Common Stock.

1.	Dividend Rights. Subject to the prior rights of
holders of all classes of stock at the time outstanding having prior rights as
to dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.

2.	Liquidation Rights. Upon the liquidation,
dissolution or winding up of the corporation, the assets of the corporation
shall be distributed as provided in Section 2 of Division (B) of this Article
III.

3.	Redemption. The Common Stock is not
redeemable.

4.	Voting Rights. The holder of each share of
Common Stock shall have the right to one vote, and shall be entitled to notice
of any shareholders' meeting in accordance with the By-laws of this corporation,
and shall be entitled to vote upon such matters and in such manner as may be
provided by law and subsection 5(b) of Division (B) of this Article III.

ARTICLE IV.

A.	The liability of the directors of this corporation
for monetary damages shall be eliminated to the fullest extent permissible under
California law.

B.	This corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California
Corporations Code) through bylaw provisions, agreements with the agents, vote of
shareholders or disinterested directors, or otherwise in excess of the
indemnification otherwise permitted by Section 317 of the California
Corporations Code, subject only to applicable limits set forth in Section 204 of
the California Corporations Code with respect to actions for breach of duty to
the corporation and its shareholders.

THREE: The foregoing amendment has been approved by
the Board of Directors of said corporation.

FOUR: The foregoing amendment and restatement of the
Articles of Incorporation was approved by the holders of the requisite number of
shares of said corporation in accordance with Sections 902 and 903 of the
California General Corporation Law; the total number of outstanding shares of
each class entitled to vote with respect to the foregoing amendment was
25,403,737 shares of Common Stock, 2,515,587 shares of Series A Preferred Stock,
875,424 shares of Series B Preferred Stock, 2,188,553 shares of Series C
Preferred Stock and 769,231 shares of Series D Preferred Stock. The number of
shares of each class voting in favor of the amendment equaled or exceeded the
vote required. The percentage vote required was (i) more than 50% of the Common
Stock, Series A Preferred Stock, Series B Preferred Stock, Series C and Series D
Preferred Stock voting together as a single class, (ii) more than 50% of the
Common Stock voting as a separate class, and (iii) more than 50% of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock voting together as a single class.

IN WITNESS WHEREOF, the undersigned Reynolds C. Bish and Rick E.
Russo, the President and Secretary, respectively, of CAPTIVA SOFTWARE
CORPORATION, declare under penalty of perjury under the laws of the State of
California that the matters set out in the foregoing Second Amended and Restated
Articles of Incorporation are true of their own knowledge.

Executed at San Diego, California on             2002.



Reynolds C. Bish, President and
   Chief Executive Officer



Rick E. Russo, Secretary



---

ANNEX L

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

ACTIONPOINT, INC.

Pursuant to Section 242

of the General Corporation Law of

the State of Delaware

ActionPoint, Inc. (hereinafter called the "Corporation"),
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, does hereby certify as follows:

FIRST: The name of the Corporation is ActionPoint,
Inc.

SECOND: At a meeting of the Board of Directors of the
Corporation a resolution was duly adopted, pursuant to Section 242 of the
General Corporation Law of the State of Delaware, setting forth an amendment to
the Amended and Restated Certificate of Incorporation of the Corporation,
declaring said amendment to be advisable, and directing that the amendment
proposed be considered at the next annual meeting of the stockholders. The
stockholders of the Corporation duly approved said proposed amendment in
accordance with Sections 222 and 242 of the General Corporation Law of the
State of Delaware. The resolution setting forth the amendment is as follows:

"RESOLVED, that Article I of the Restated Certificate of
Incorporation of the Corporation be amended to read in full as follows:

ARTICLE I

The name of this corporation is Captiva Software Corporation
(the "Corporation")."

IN WITNESS WHEREOF, ActionPoint, Inc., has caused this
Certificate of Amendment of the Certificate of Incorporation to be signed by its
President and Chief Executive Officer this day of             2002.

ACTIONPOINT, INC.



Stephen Francis

President and Chief Executive Officer







---

ANNEX M

CAPTIVA SOFTWARE CORPORATION



2002 EQUITY INCENTIVE PLAN

Adopted January 28, 2002
Approved By Shareholders             2002
Termination Date:  January 28, 2012



1.	PURPOSES.

(a)	Eligible Stock Award
Recipients.

(b)	Available Stock Awards.  The purpose of the
Plan is to provide a means by which eligible recipients of Stock Awards may be
given an opportunity to benefit from increases in value of the Common Stock
through the granting of the following Stock Awards:  (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to
acquire restricted stock.

(c)	General Purpose.  The Company, by means of the
Plan, seeks to retain the services of the group of persons eligible to receive
Stock Awards, to secure and retain the services of new members of this group and
to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.

2.	DEFINITIONS.

(a)"Affiliate"

(b)	"Board" means the Board of
Directors of the Company.

(c)	"Code" means the Internal
Revenue Code of 1986, as amended.

(d)	"Committee" means a committee
of one or more members of the Board appointed by the Board in accordance with
subsection 3(c).

(e)	"Common Stock" means the
common stock of the Company.

(f)	"Company" means Captiva
Software Corporation, a California corporation.

(g)	"Consultant" means any person,
including an advisor, (i) engaged by the Company or an Affiliate to render
consulting or advisory services and who is compensated for such services or (ii)
who is a member of the Board of Directors of an Affiliate.  However, the term
"Consultant" shall not include either Directors who are not
compensated by the Company for their services as Directors or Directors who are
merely paid a director's fee by the Company for their services as Directors.

(h)	"Continuous Service" means
that the Participant's service with the Company or an Affiliate, whether as an
Employee, Director or Consultant, is not interrupted or terminated.  The
Participant's Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to
the Company or an Affiliate as an Employee, Consultant or Director or a change
in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant's Continuous Service.
For example, a change in status from an Employee of the Company to a Consultant
of an Affiliate or a Director will not constitute an interruption of Continuous
Service.  The Board or the chief executive officer of the Company, in that
party's sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.

(i)	"Covered Employee" means the
chief executive officer and the four (4) other highest compensated officers of
the Company for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code.

(j)	"Director" means a member of
the Board of Directors of the Company.

(k)	"Disability" means (i) before
the Listing Date, the inability of a person, in the opinion of a qualified
physician acceptable to the Company, to perform the major duties of that
person's position with the Company or an Affiliate of the Company because of the
sickness or injury of the person and (ii) after the Listing Date, the permanent
and total disability of a person within the meaning of Section 22(e)(3) of the
Code.

(l)	"Employee" means any person
employed by the Company or an Affiliate.  Mere service as a Director or payment
of a director's fee by the Company or an Affiliate shall not be sufficient to
constitute "employment" by the Company or an Affiliate.

(m)	"Exchange Act" means the
Securities Exchange Act of 1934, as amended.

(n)	"Fair Market Value" means, as
of any date, the value of the Common Stock determined as follows:

(i)	If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the Common Stock) on the last market trading
day prior to the day of determination, as reported in The Wall Street
Journalor such other source as the Board deems reliable.

(ii)	In the absence of such markets for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board.

(iii)	Prior to the Listing Date, the value of the
Common Stock shall be determined in a manner consistent with Section 260.140.50
of Title 10 of the California Code of Regulations.

(o)	"Incentive Stock Option" means
an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.

(p)	"Listing Date" means the first
date upon which any security of the Company is listed (or approved for listing)
upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an
interdealer quotation system if such securities exchange or interdealer
quotation system has been certified in accordance with the provisions of Section
25100(o) of the California Corporate Securities Law of 1968.

(q)	"Non-Employee Director" means
a Director who either (i) is not a current Employee or Officer of the Company or
its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered
as a consultant or in any capacity other than as a Director (except for an
amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-
K")), does not possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation S-K and is not
engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.

(r)	"Nonstatutory Stock Option"
means an Option not intended to qualify as an Incentive Stock Option.

(s)	"Officer" means (i) before the
Listing Date, any person designated by the Company as an officer and (ii) on and
after the Listing Date, a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(t)	"Option" means an Incentive
Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.

(u)	"Option Agreement" means a
written agreement between the Company and an Optionholder evidencing the terms
and conditions of an individual Option grant.  Each Option Agreement shall be
subject to the terms and conditions of the Plan.

(v)	"Optionholder" means a person
to whom an Option is granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Option.

(w)	"Outside Director" means a
Director who either (i) is not a current employee of the Company or an
"affiliated corporation" (within the meaning of Treasury Regulations
promulgated under Section 162(m) of the Code), is not a former employee of the
Company or an "affiliated corporation" receiving compensation for
prior services (other than benefits under a tax-qualified pension plan), was not
an officer of the Company or an "affiliated corporation" at any time
and is not currently receiving direct or indirect remuneration from the Company
or an "affiliated corporation" for services in any capacity other than
as a Director or (ii) is otherwise considered an "outside director"
for purposes of Section 162(m) of the Code.

(x)	"Participant" means a person
to whom a Stock Award is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Stock Award.

(y)	"Plan" means this Captiva
Software Corporation 2002 Equity Incentive Plan.

(z)	"Rule 16b-3" means Rule 16b-3
promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect
from time to time.

(aa)	"Securities Act" means the
Securities Act of 1933, as amended.

(bb)	"Stock Award" means any right
granted under the Plan, including an Option, a stock bonus and a right to
acquire restricted stock.

(cc)	"Stock Award Agreement" means
a written agreement between the Company and a holder of a Stock Award evidencing
the terms and conditions of an individual Stock Award grant.  Each Stock Award
Agreement shall be subject to the terms and conditions of the Plan.

(dd)	"Ten Percent Shareholder"
means a person who owns (or is deemed to own pursuant to Section 424(d) of the
Code) stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any of its Affiliates.

3.	ADMINISTRATION.

(a)	Administration by Board.

(b)	Powers of Board.  The Board shall have the
power, subject to, and within the limitations of, the express provisions of the
Plan:

(i)	To determine from time to time which of the
persons eligible under the Plan shall be granted Stock Awards; when and how each
Stock Award shall be granted; what type or combination of types of Stock Award
shall be granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

(ii)	To construe and interpret the Plan and Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock
Award Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.

(iii)	To amend the Plan or a Stock Award as
provided in Section 12.

(iv)	Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the
Plan.

(c)	Delegation to Committee.

(i)	General.  The Board may delegate administration of
the Plan to a Committee or Committees of one (1) or more members of the Board,
and the term "Committee" shall apply to any person or persons to whom
such authority has been delegated.  If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board.  The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan.

(ii)	Committee Composition when Common Stock is
Publicly Traded.  At such time as the Common Stock is publicly traded, in
the discretion of the Board, a Committee may consist solely of two or more
Outside Directors, in accordance with Section 162(m) of the Code, and/or solely
of two or more Non-Employee Directors, in accordance with Rule 16b-3.  Within
the scope of such authority, the Board or the Committee may (1) delegate to a
committee of one or more members of the Board who are not Outside Directors the
authority to grant Stock Awards to eligible persons who are either (a) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award or (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code
and/or (2) delegate to a committee of one or more members of the Board who are
not Non-Employee Directors the authority to grant Stock Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.

(d)	Effect of Board's Decision.  All
determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

4.	SHARES
SUBJECT TO THE PLAN.

(a)	Share Reserve.

(b)	Reversion of Shares to the Share Reserve.  If
any Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the shares of Common Stock not
acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.

(c)	Source of Shares.  The shares of Common Stock
subject to the Plan may be unissued shares or reacquired shares, bought on the
market or otherwise.

(d)	Share Reserve Limitation.  Prior to the Listing
Date and to the extent then required by Section 260.140.45 of Title 10 of the
California Code of Regulations, the total number of shares of Common Stock
issuable upon exercise of all outstanding Options and the total number of shares
of Common Stock provided for under any stock bonus or similar plan of the
Company shall not exceed the applicable percentage as calculated in accordance
with the conditions and exclusions of Section 260.140.45 of Title 10 of the
California Code of Regulations, based on the shares of Common Stock of the
Company that are outstanding at the time the calculation is made.1

5.	ELIGIBILITY.

(a)	Eligibility for Specific Stock
Awards.

(b)	Ten Percent Shareholders.

(i)	A Ten Percent Shareholder shall not be granted an
Incentive Stock Option unless the exercise price of such Option is at least one
hundred ten percent (110%) of the Fair Market Value of the Common Stock at the
date of grant and the Option is not exercisable after the expiration of five (5)
years from the date of grant.

(ii)	Prior to the Listing Date, a Ten Percent
Shareholder shall not be granted a Nonstatutory Stock Option unless the exercise
price of such Option is at least (i) one hundred ten percent (110%) of the Fair
Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as
is permitted by Section 260.140.41 of Title 10 of the California Code of
Regulations at the time of the grant of the Option.

(iii)	Prior to the Listing Date, a Ten Percent
Shareholder shall not be granted a restricted stock award unless the purchase
price of the restricted stock is at least (i) one hundred percent (100%) of the
Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as
is permitted by Section 260.140.42 of Title 10 of the California Code of
Regulations at the time of the grant of the restricted stock award.



1  Section 260.140.45 generally provides that the total number of shares
issuable upon exercise of all outstanding options (exclusive of certain rights) and the total
number of shares called for under any stock bonus or similar plan shall not exceed a number
of shares which is equal to 30% of the then outstanding shares of the issuer (convertible preferred
or convertible senior common shares counted on an as if converted basis), exclusive of shares
subject to promotional waivers under Section 260.141, unless a percentage higher than 30% is
approved by at least two-thirds of the outstanding shares entitled to vote.

---

(c)	Section 162(m) Limitation.  Subject to the
provisions of Section 11 relating to adjustments upon changes in the shares of
Common Stock, no Employee shall be eligible to be granted Options covering more
than one hundred million (100,000,000) shares of Common Stock during any
calendar year.  This subsection 5(c) shall not apply prior to the Listing Date
and, following the Listing Date, this subsection 5(c) shall not apply until (i)
the earliest of:  (1) the first material modification of the Plan (including any
increase in the number of shares of Common Stock reserved for issuance under the
Plan in accordance with Section 4); (2) the issuance of all of the shares of
Common Stock reserved for issuance under the Plan; (3) the expiration of the
Plan; or (4) the first meeting of shareholders at which Directors are to be
elected that occurs after the close of the third calendar year following the
calendar year in which occurred the first registration of an equity security
under Section 12 of the Exchange Act; or (ii) such other date required by
Section 162(m) of the Code and the rules and regulations promulgated
thereunder.

(d)	Consultants.

(i)	Prior to the Listing Date, a Consultant shall not
be eligible for the grant of a Stock Award if, at the time of grant, either the
offer or the sale of the Company's securities to such Consultant is not exempt
under Rule 701 of the Securities Act ("Rule 701") because of the
nature of the services that the Consultant is providing to the Company, or
because the Consultant is not a natural person, or as otherwise provided by Rule
701, unless the Company determines that such grant need not comply with the
requirements of Rule 701 and will satisfy another exemption under the Securities
Act as well as comply with the securities laws of all other relevant
jurisdictions.

(ii)	From and after the Listing Date, a Consultant
shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act ("Form S-8")
is not available to register either the offer or the sale of the Company's
securities to such Consultant because of the nature of the services that the
Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by the rules governing the use of Form
S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-
3 Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.

(iii)	Rule 701 and Form S-8 generally are available
to consultants and advisors only if (i) they are natural persons; (ii) they
provide bona fide services to the issuer, its parents, its majority-owned
subsidiaries or majority-owned subsidiaries of the issuer's parent; and (iii)
the services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the issuer's securities.

6.	OPTION
PROVISIONS.

Each Option shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate.
All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option.  The provisions of
separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

(a)	Term.  Subject to the provisions of subsection
5(b) regarding Ten Percent Shareholders, no Option granted prior to the Listing
Date shall be exercisable after the expiration of ten (10) years from the date
it was granted, and no Incentive Stock Option granted on or after the Listing
Date shall be exercisable after the expiration of ten (10) years from the date
it was granted.

(b)	Exercise Price of an Incentive Stock Option.
Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders,
the exercise price of each Incentive Stock Option shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Option on the date the Option is granted.  Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

(c)	Exercise Price of a Nonstatutory Stock Option

(i)	For any Nonstatutory Stock Option granted prior to
the Listing Date,

(1)	that is intended to qualify under Section
25102(o) of the California Corporate Securities Law of 1968, the exercise price
of each such Option shall be not less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is
granted, subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders.

(2)	that is intended to qualify under Section
25102(f) of the California Corporate Securities Law of 1968, the exercise price
of each such Option shall be not less than thirty percent (30%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted.

(ii)	For any Nonstatutory Stock Option granted on
or after the Listing Date, the exercise price of each such Option shall be not
less than thirty percent (30%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted.

Notwithstanding the foregoing, a Nonstatutory Stock Option
may be granted with an exercise price lower those set forth above if such Option
is granted pursuant to an assumption or substitution for another option in a
manner satisfying the provisions of Section 424(a) of the Code.

(d)	Consideration.  The purchase price of Common
Stock acquired pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time the Option
is exercised or (ii) at the discretion of the Board at the time of the grant of
the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by
delivery to the Company of other Common Stock, (2) according to a deferred
payment or other similar arrangement with the Optionholder or (3) in any other
form of legal consideration that may be acceptable to the Board.  Unless
otherwise specifically provided in the Option, the purchase price of Common
Stock acquired pursuant to an Option that is paid by delivery to the Company of
other Common Stock acquired, directly or indirectly from the Company, shall be
paid only by shares of the Common Stock of the Company that have been held for
more than six (6) months (or such longer or shorter period of time required to
avoid a charge to earnings for financial accounting purposes).  At any time that
the Company is incorporated in Delaware, payment of the Common Stock's "par
value," as defined in the Delaware General Corporation Law, shall not be
made by deferred payment.

In the case of any deferred payment arrangement, interest
shall be compounded at least annually and shall be charged at the market rate of
interest necessary to avoid a charge to earnings for financial accounting
purposes.

(e)	Transferability of an Incentive Stock Option.
An Incentive Stock Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of
the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the
Option.

(f)	Transferability of a Nonstatutory Stock Option.
A Nonstatutory Stock Option granted prior to the Listing Date shall not be
transferable except by will or by the laws of descent and distribution and, to
the extent provided in the Option Agreement, to such further extent as permitted
by Section 260.140.41(d) of Title 10 of the California Code of Regulations at
the time of the grant of the Option, and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.  A Nonstatutory Stock
Option granted on or after the Listing Date shall be transferable to the extent
provided in the Option Agreement.  If the Nonstatutory Stock Option does not
provide for transferability, then the Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

(g)	Vesting Generally.  The total number of shares
of Common Stock subject to an Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be equal.
The Option may be subject to such other terms and conditions on the time or
times when it may be exercised (which may be based on performance or other
criteria) as the Board may deem appropriate.  The vesting provisions of
individual Options may vary.  The provisions of this subsection 6(g) are subject
to any Option provisions governing the minimum number of shares of Common Stock
as to which an Option may be exercised.

(h)	Minimum Vesting Prior to the Listing Date.
Notwithstanding the foregoing subsection 6(g), to the extent that the following
restrictions on vesting are required by Section 260.140.41(f) of Title 10 of the
California Code of Regulations at the time of the grant of the Option, then:

(i)	Options granted prior to the Listing Date to an
Employee who is not an Officer, Director or Consultant shall provide for vesting
of the total number of shares of Common Stock at a rate of at least twenty
percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment;  and

(ii)	Options granted prior to the Listing Date to
Officers, Directors or Consultants may be made fully exercisable, subject to
reasonable conditions such as continued employment, at any time or during any
period established by the Company.

(i)	Termination of Continuous Service.  In the
event an Optionholder's Continuous Service terminates (other than upon the
Optionholder's death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholder's Continuous Service (or such longer or shorter period specified in
the Option Agreement, which period shall not be less than thirty (30) days for
Options granted prior to the Listing Date unless such termination is for cause),
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement.  If, after termination, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate.

(j)	Extension of Termination Date.  An
Optionholder's Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionholder's Continuous Service (other
than upon the Optionholder's death or Disability) would be prohibited at any
time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in subsection 6(a) or (ii) the expiration of a period of three (3) months
after the termination of the Optionholder's Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

(k)	Disability of Optionholder.  In the event that
an Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such Option as of the
date of termination), but only within such period of time ending on the earlier
of (i) the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement, which period shall not be less
than six (6) months for Options granted prior to the Listing Date) or (ii) the
expiration of the term of the Option as set forth in the Option Agreement.  If,
after termination, the Optionholder does not exercise his or her Option within
the time specified herein, the Option shall terminate.

(l)	Death of Optionholder.  In the event (i) an
Optionholder's Continuous Service terminates as a result of the Optionholder's
death or (ii) the Optionholder dies within the period (if any) specified in the
Option Agreement after the termination of the Optionholder's Continuous Service
for a reason other than death, then the Option may be exercised (to the extent
the Optionholder was entitled to exercise such Option as of the date of death)
by the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but
only within the period ending on the earlier of (1) the date twelve (12) months
following the date of death (or such longer or shorter period specified in the
Option Agreement, which period shall not be less than six (6) months for Options
granted prior to the Listing Date) or (2) the expiration of the term of such
Option as set forth in the Option Agreement.  If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.

(m)	Early Exercise.  The Option may, but need not,
include a provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option.  Subject to the "Repurchase Limitation" in
subsection 10(h), any unvested shares of Common Stock so purchased may be
subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate.

(n)	Right of Repurchase.  Subject to the
"Repurchase Limitation" in subsection 10(h), the Option may, but need
not, include a provision whereby the Company may elect, prior to the Listing
Date, to repurchase all or any part of the vested shares of Common Stock
acquired by the Optionholder pursuant to the exercise of the Option.

(o)	Right of First Refusal.  The Option may, but
need not, include a provision whereby the Company may elect, prior to the
Listing Date, to exercise a right of first refusal following receipt of notice
from the Optionholder of the intent to transfer all or any part of the shares of
Common Stock received upon the exercise of the Option.  Except as expressly
provided in this subsection 6(o), such right of first refusal shall otherwise
comply with any applicable provisions of the Bylaws of the Company.

7.	PROVISION OF STOCK AWARDS OTHER THAN OPTIONS.

(a)	Stock Bonus Awards.

(i)	Consideration.  A stock bonus may be awarded in
consideration for past services actually rendered to the Company or an Affiliate
for its benefit.

(ii)	Vesting.  Subject to the "Repurchase
Limitation" in subsection 10(h), shares of Common Stock awarded under the
stock bonus agreement may, but need not, be subject to a share repurchase option
in favor of the Company in accordance with a vesting schedule to be determined
by the Board.

(iii)	Termination of Participant's Continuous
Service.  Subject to the "Repurchase Limitation" in subsection
10(h), in the event a Participant's Continuous Service terminates, the Company
may reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the stock
bonus agreement.

(iv)	Transferability.  For a stock bonus award made
before the Listing Date, rights to acquire shares of Common Stock under the
stock bonus agreement shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant.  For a stock bonus award made on or after
the Listing Date, rights to acquire shares of Common Stock under the stock bonus
agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the stock bonus agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.

(b)	Restricted Stock Awards.  Each restricted stock
purchase agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  The terms and conditions of the
restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be
identical, but each restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

(i)	Purchase Price.  Subject to the provisions of
subsection 5(b) regarding Ten Percent Shareholders, the purchase price under
each restricted stock purchase agreement shall be such amount as the Board shall
determine and designate in such restricted stock purchase agreement.  For
restricted stock awards made prior to the Listing Date, the purchase price shall
not be less than eighty-five percent (85%) of the Common Stock's Fair Market
Value on the date such award is made or at the time the purchase is consummated.
For restricted stock awards made on or after the Listing Date, the purchase
price shall not be less than eighty-five percent (85%) of the Common Stock's
Fair Market Value on the date such award is made or at the time the purchase is
consummated.

(ii)	Consideration.  The purchase price of Common
Stock acquired pursuant to the restricted stock purchase agreement shall be paid
either:  (i) in cash at the time of purchase; (ii) at the discretion of the
Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be
acceptable to the Board in its discretion; provided, however, that at any time
that the Company is incorporated in Delaware, then payment of the Common Stock's
"par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment.

(iii)	Vesting.  Subject to the "Repurchase
Limitation" in subsection 10(h), shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to a share
repurchase option in favor of the Company in accordance with a vesting schedule
to be determined by the Board.

(iv)	Termination of Participant's Continuous
Service.  Subject to the "Repurchase Limitation" in subsection
10(h), in the event a Participant's Continuous Service terminates, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock
held by the Participant which have not vested as of the date of termination
under the terms of the restricted stock purchase agreement.

(v)	Transferability.  For a restricted stock award
made before the Listing Date, rights to acquire shares of Common Stock under the
restricted stock purchase agreement shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by the Participant.  For a restricted stock
award made on or after the Listing Date, rights to acquire shares of Common
Stock under the restricted stock purchase agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the
restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase
agreement remains subject to the terms of the restricted stock purchase
agreement.

8.	COVENANTS OF THE COMPANY.

(a)	Availability of Shares.

(b)	Securities Law Compliance.  The Company shall
seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards and to
issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or any Common Stock
issued or issuable pursuant to any such Stock Award.  If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is obtained.

9.	USE OF
PROCEEDS FROM STOCK.

Proceeds from the sale of Common Stock
pursuant to Stock Awards shall constitute general funds of the Company.

10.	MISCELLANEOUS.

(a)	Acceleration of Exercisability
and Vesting.

(b)	Shareholder Rights.  No Participant shall be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Stock Award unless and
until such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms.

(c)	No Employment or other Service Rights.  Nothing
in the Plan or any instrument executed or Stock Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or
an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause, (ii)
the service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

(d)	Incentive Stock Option $100,000 Limitation.  To
the extent that the aggregate Fair Market Value (determined at the time of
grant) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar year
(under all plans of the Company and its Affiliates) exceeds one hundred thousand
dollars ($100,000), the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.

(e)	Investment Assurances.  The Company may require
a Participant, as a condition of exercising or acquiring Common Stock under any
Stock Award, (i) to give written assurances satisfactory to the Company as to
the Participant's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award;
and (ii) to give written assurances satisfactory to the Company stating that the
Participant is acquiring Common Stock subject to the Stock Award for the
Participant's own account and not with any present intention of selling or
otherwise distributing the Common Stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (1) the
issuance of the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act or (2) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common
Stock.

(f)	Withholding Obligations.  To the extent
provided by the terms of a Stock Award Agreement, the Participant may satisfy
any federal, state or local tax withholding obligation relating to the exercise
or acquisition of Common Stock under a Stock Award by any of the following means
(in addition to the Company's right to withhold from any compensation paid to
the Participant by the Company) or by a combination of such means:  (i)
tendering a cash payment; (ii) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the
Stock Award, provided, however, that no shares of Common Stock are withheld with
a value exceeding the minimum amount of tax required to be withheld by law; or
(iii) delivering to the Company owned and unencumbered shares of Common
Stock.

(g)	Information Obligation.  Prior to the Listing
Date, to the extent required by Section 260.140.46 of Title 10 of the California
Code of Regulations, the Company shall deliver financial statements to
Participants at least annually.  This subsection 10(g) shall not apply to key
Employees whose duties in connection with the Company assure them access to
equivalent information.

(h)	Repurchase Limitation.  The terms of any
repurchase option shall be specified in the Stock Award and may be either at
Fair Market Value at the time of repurchase or at not less than the original
purchase price.  To the extent required by Section 260.140.41 and Section
260.140.42 of Title 10 of the California Code of Regulations at the time a Stock
Award is made, any repurchase option contained in a Stock Award granted prior to
the Listing Date to a person who is not an Officer, Director or Consultant shall
be upon the terms described below:

(i)	Fair Market Value.  If the repurchase option
gives the Company the right to repurchase the shares of Common Stock upon
termination of employment at not less than the Fair Market Value of the shares
of Common Stock to be purchased on the date of termination of Continuous
Service, then (i) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares of Common Stock
within ninety (90) days of termination of Continuous Service (or in the case of
shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Participant (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code regarding "qualified small business stock") and (ii) the
right terminates when the shares of Common Stock become publicly traded.

(ii)	Original Purchase Price.  If the repurchase
option gives the Company the right to repurchase the shares of Common Stock upon
termination of Continuous Service at the original purchase price, then (i) the
right to repurchase at the original purchase price shall lapse at the rate of at
least twenty percent (20%) of the shares of Common Stock per year over five (5)
years from the date the Stock Award is granted (without respect to the date the
Stock Award was exercised or became exercisable) and (ii) the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock
issued upon exercise of Options after such date of termination, within ninety
(90) days after the date of the exercise) or such longer period as may be agreed
to by the Company and the Participant (for example, for purposes of satisfying
the requirements of Section 1202(c)(3) of the Code regarding "qualified
small business stock").

11.	ADJUSTMENTS UPON CHANGES IN STOCK.

(a)	Capitalization Adjustments.

(b)	Dissolution or Liquidation.  In the event of a
dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to such event.

(c)	Asset Sale, Merger, Consolidation or Reverse
Merger.  In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise
(individually, a "Corporate Transaction"), then any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding
under the Plan or shall substitute similar stock awards (including an award to
acquire the same consideration paid to the shareholders in the Corporate
Transaction) for those outstanding under the Plan.  In the event any surviving
corporation or acquiring corporation refuses to assume such Stock Awards or to
substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full,
and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to the Corporate Transaction.  With respect to any other Stock Awards
outstanding under the Plan, such Stock Awards shall terminate if not exercised
(if applicable) prior to the Corporate Transaction.

12.	AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a)	Amendment of Plan.

(b)	Shareholder Approval.  The Board may, in its
sole discretion, submit any other amendment to the Plan for shareholder
approval, including, but not limited to, amendments to the Plan intended to
satisfy the requirements of Section 162(m) of the Code and the regulations
thereunder regarding the exclusion of performance-based compensation from the
limit on corporate deductibility of compensation paid to certain executive
officers.

(c)	Contemplated Amendments.  It is expressly
contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the
Plan and/or Incentive Stock Options granted under it into compliance
therewith.

(d)	No Impairment of Rights.  Rights under any
Stock Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.

(e)	Amendment of Stock Awards.  The Board at any
time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be
impaired by any such amendment unless (i) the Company requests the consent of
the Participant and (ii) the Participant consents in writing.

13.	TERMINATION OR SUSPENSION OF THE PLAN.

(a)	Plan Term.

(b)	No Impairment of Rights.  Suspension or
termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of the
Participant.

14.	EFFECTIVE DATE OF PLAN.

The Plan shall become effective as
determined by the Board, but no Stock Award shall be exercised (or, in the case
of a stock bonus, shall be granted) unless and until the Plan has been approved
by the shareholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.

15.	CHOICE
OF LAW.

The law of the State of California shall
govern all questions concerning the construction, validity and interpretation of
this Plan, without regard to such state's conflict of laws rules.



Amendments to
Captiva Software Corporation Amended and Restated
Stock Option/Stock Issuance Plan



Article I, Subsection 4.A of the Plan shall be amended in its
entirety as follows:

A.	The persons eligible to receive share issuances under
the Stock Issuance Program and/or option grants pursuant to the Option Grant
Program are limited to Employees; non-employee members of the Board of the
Corporation (or of any Parent or Subsidiary); and consultants and other
independent contractors who provide valuable services to the Corporation (or of
any Parent or Subsidiary); provided, however, and notwithstanding any other
provision of this Plan to the contrary, for any option intended to qualify under
Section 25102(f) of the California Corporate Securities Law of 1968, the Plan
Administrator shall only have the right to make grants of options solely to
individuals who (i) meet the requirements of both Sections 25102(f)(2) and
25102(f)(3) of the California Corporate Securities Law of 1968, and (ii) satisfy
the requirements for a comparable applicable exemption under the Securities Act
of 1933 (the "Securities Act"); and further provided that,
during any period of six (6) consecutive months, no more than thirty-five (35)
persons (excluding executive officers and directors of the Corporation,
accredited investors within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act and other persons described in Section
260.102.13 of Title 10 of the California Code of Regulations) may be eligible to
receive share issuances under the Stock Issuance Program and/or option grants
pursuant to the Option Grant Program with a husband and wife together being
considered a single person for this purpose only.

Article II, Subsection 1.A(I) of the Plan shall be amended in
its entirety as follows:

(I)	The option price per share shall be fixed by the Plan
Administrator in accordance with the following:.

--  For options intended to qualify under Section 25102(o) of
the California Corporate Securities Law of 1968, the option price per share
shall not be less than eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock on the date of the option grant or, in the case of any
option granted to a 10% Shareholder, the option price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value of a share of
Common Stock on the date of the option grant.

--  For options intended to qualify under Section 25102(f) of
the California Corporate Securities Law of 1968, the option price per share
shall not be less than thirty percent (30%) of the Fair Market Value of a share
of Common Stock on the date of the option grant.

Notwithstanding the foregoing, an option may be granted with
an exercise price lower than that set forth above if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.



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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

ActionPoint's certificate of incorporation in effect as of the date
hereof, and ActionPoint's certificate of incorporation to be in effect upon the
closing of the merger (collectively, the "Certificate") provides that,
except to the extent prohibited by the Delaware General Corporation Law, as
amended, or the DGCL, ActionPoint's directors shall not be personally liable to
ActionPoint or its stockholders for monetary damages for any breach of fiduciary
duty as directors of ActionPoint.  Under the DGCL, the directors have a
fiduciary duty to ActionPoint that is not eliminated by this provision of the
Certificate and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain available.  In
addition, each director will continue to be subject to liability under the DGCL
for breach of the director's duty of loyalty to ActionPoint, for acts or
omissions which are found by a court of competent jurisdiction to be not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited by
the DGCL.  This provision also does not affect the directors' responsibilities
under any other laws, such as the federal securities laws or state or federal
environmental laws. ActionPoint has obtained liability insurance for its
officers and directors.

Section 145 of the DGCL empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers, provided that
this provision shall not eliminate or limit the liability of a director:

- for any breach of the director's duty of loyalty to the corporation or its
stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- arising under Section 174 of the DGCL; or
- for any transaction from which the director derived an improper personal
benefit.

The DGCL provides further that the indemnification permitted thereunder shall
not be deemed exclusive of any other rights to which the directors and officers
may be entitled under the corporation's bylaws, any agreement, a vote of
stockholders or otherwise.  The Certificate eliminates the personal liability of
directors to the fullest extent permitted by Section 102(b)(7) of the DGCL
and provides that ActionPoint shall fully indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of ActionPoint, or is or was serving at the request of ActionPoint as a
director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding.

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  Exhibits

See Exhibit Index.

(b)  Financial Statement Schedules

Not applicable.

II-1

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ITEM 22.  UNDERTAKINGS

(1)	The undersigned registrant hereby undertakes:

(a)	To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i)	To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii)	To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement;

(iii)	To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

(b)	That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(c)	To remove from the registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.

(2)	The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the undersigned registrant undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.

(3)	The undersigned registrant undertakes that every prospectus
(i) that is filed pursuant to paragraph (2) immediately preceding, or
(ii) that purports to meet the requirements of Section 10(a)(3) of the
Securities Act of 1933 and is used in connection with an offering of securities
subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(4)	Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(5)	The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
ActionPoint being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-2

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(6)	The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.

(7)	The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

II-3

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
registrant has duly caused this amendment No. 1 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Jose, State of California, on the 4th day of June 2002.

| | ACTIONPOINT, INC.


By:/s/ Stephen S. Francis 
 Stephen S. Francis
President and Chief Executive Officer
| | --------------------------------------------------------------------------------------------------------

Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.

`Signature                               Title(s)                    Date
------------------------    ---------------------------------   -------------
/s/ Stephen S. Francis      President, Chief Executive          June 4, 2002
--------------------------  Officer and Director
    Stephen S. Francis      (Principal Executive Officer)


/s/ John Finegan            Vice President of Finance, Chief    June 4, 2002
--------------------------  Financial Officer and Director
    John Finegan            (Principal Financial and
                            Accounting Officer)
         *                  Chairman of the Board               June 4, 2002
--------------------------
    Kimra D. Hawley

         *                  Director                            June 4, 2002
--------------------------
    Thomas T. van Overbeek

         *                  Director                            June 4, 2002
--------------------------
    Bruce Silver

         *                  Director                            June 4, 2002
--------------------------
    Patrick Edsell

         *                  Director                            June 4, 2002
--------------------------
    Daniel D. Tompkins




* /s/ Stephen S. Francis
--------------------------
  Per Power of Attorney`

II-4

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EXHIBIT INDEX



|Number   | Description                                                                                                                                                               
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1*     | Agreement and Plan of Merger and Reorganization dated March 4, 2002 by and among the registrant, Condor Merger Corp. and Captiva Software Corporation.                    
|2.2+*+   | Amendment to Agreement and Plan of Merger and Reorganization dated April 16, 2002 by and among the registrant, Condor Merger Corp. and Captiva Software Corporation.      
|3.1**    | Amended and Restated Certificate of Incorporation of the registrant.                                                                                                      
|3.2***   | Bylaws of the registrant.                                                                                                                                                 
|4.1      | Reference is made to Exhibits 3.1 and 3.2.                                                                                                                                
|4.2**    | Form of Investor Rights Agreement dated August 27, 1993 by and among the registrant and the investors identified therein.                                                 
|4.3+     | Rights Agreement dated September 9, 1997.                                                                                                                                 
|4.4++    | Amendment to Rights Agreement dated October 5, 2001 by and among the registrant, Fleet National Bank and EquiServe Trust Company, N.A.                                    
|4.5*     | Second Amendment to Rights Agreement dated March 4, 2002 between the registrant and EquiServe Trust Company, N.A.                                                         
|5.1+*+   | Opinion of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP.                                                                                                 
|8.1      | Opinion of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP regarding tax matters.                                                                           
|8.2      | Opinion of Cooley Godward LLP regarding tax matters.                                                                                                                      
|10.1**   | Form of indemnification agreement entered into between the registrant and its directors and executive officers.                                                           
|10.2**   | Form of the registrant's Amended and Restated 1993 Stock Option/Stock Issuance Plan.                                                                                      
|10.3+++  | Form of the registrant's 1999 Stock Plan.                                                                                                                                 
|10.4+++  | Form of the registrant's Amended and Restated 1998 Employee Stock Purchase Plan.                                                                                          
|10.5+++  | The registrant's lease for property at 1299 Parkmoor Ave., San Jose, CA.                                                                                                  
|10.6++   | Form of Severance Agreement between the registrant and certain of its executive officers.                                                                                 
|10.7++   | Form of Severance Agreement between the registrant and certain of its executive officers in connection with the merger of the registrant and Captiva Software Corporation.
|10.8*    | Form of Voting Agreement between each of the registrant's executive officers and directors and Captiva Software Corporation.                                              
|10.9*    | Form of Voting Agreement between each of the Captiva Software Corporation's executive officers and directors and the registrant.                                          
|10.10++  | Form of lock-up agreement from each of the registrant's executive officers and directors.                                                                                 
|10.11+*+ | Form of lock-up agreement from each of the executive officers, directors and certain affiliates and stockholders of Captiva Software Corporation.                         
|10.12+*+ | Employment offer letter from ActionPoint, Inc. to Rick Russo dated March 4, 2002.                                                                                         
|10.13+*+ | Employment offer letter from ActionPoint, Inc. to Reynolds Bish dated March 4, 2002.                                                                                      
|10.14+*+ | Amendment No. 1 to registrant's Amended and Restated 1993 Stock Option/Stock Issuance Plan.                                                                               
|10.15+*+ | Form of proposed Amended and Restated 1998 Employee Stock Purchase Plan.                                                                                                  
|13.1*+*  | Annual report of the registrant to security holders for the year ended December 31, 2001.                                                                                 
|13.2*+*  | Quarterly report of the registrant on Form 10-Q.                                                                                                                          
|21.1+*+  | Subsidiaries of the registrant.                                                                                                                                           
|23.1     | Consent of PricewaterhouseCoopers LLP, Independent Accountants for the registrant.                                                                                        
|23.2     | Consent of PricewaterhouseCoopers LLP, Independent Accountants for Captiva Software Corporation.                                                                          
|24.1     | Manually signed power of attorney.                                                                                                                                        
|99.1     | ActionPoint Proxy Solicitation.                                                                                                                                           
|99.2+*+  | Form of Captiva written consent of stockholders.                                                                                                                          
|99.3+*+  | Consent of Person Named as About to Become a Director (Reynolds C. Bish).                                                                                                 
|99.4+*+  | Consent of Person Named as About to Become a Director (James H. Berglund).                                                                                                
|99.5+*+  | Consent of Person Named as About to Become a Director (Mel S. Lavitt).                                                                                                    
|99.6+*+  | Consent of Pacific Crest Securities Inc., financial advisors to the registrant.                                                                                           
|99.7+*+  | Consent of Houlihan Lokey Howard and Zukin, financial advisors to Captiva Software Corporation.                                                                           

_______

*	Incorporated by reference to an exhibit to the registrant's current
report on Form 8-K filed on March 20, 2002.

**	Incorporated by reference to an exhibit to the registrant's
registration statement on Form S-1, as amended (Registration No. 33-
66142).

***	Incorporated by reference to an exhibit to the registrant's current
report on Form 8-K filed on September 24, 1997.

+	Incorporated by reference to an exhibit to the registrant's registration
statement on Form 8-A filed on September 10, 1997.

++	Incorporated by reference to an exhibit to the registrant's annual
report on Form 10-K filed on March 29, 2002.

+++	Incorporated by reference to an exhibit to the registrant's annual
report on Form 10-K filed on April 2, 2001.

+*+	Filed with the registrant's initial filing of its registration statement on Form S-4
on April 26, 2002 (Registration No. 333-87106)

*+*	To be filed by amendment.

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Quicklinks

QUESTIONS AND ANSWERS ABOUT THE MERGERSUMMARYSELECTED HISTORICAL AND SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATAActionPoint's Summary Historical Consolidated Financial DataCaptiva's Selected Historical Condensed Consolidated Financial InformationSummary Unaudited Pro Forma Combined Financial Information of ActionPoint and CaptivaComparative Historical and Pro Forma Per Share DataRISK FACTORSRisks Related to the MergerRisks Related to the Business of the Combined CompanyCAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTSMARKET PRICE AND DIVIDEND INFORMATIONActionPoint Common StockComparison of ActionPoint Stockholder ReturnCaptiva Capital StockTHE ACTIONPOINT ANNUAL MEETINGGeneralPurpose of Annual MeetingActionPoint Board of Directors' RecommendationsRecord Date and VotingVoting and Revocation of ProxiesAppraisal and Dissenters' RightsTHE CAPTIVA ACTION BY WRITTEN CONSENTMatters to be Acted Upon by Written ConsentBoard of Directors RecommendationRecord DateStockholders Entitled to VoteVote RequiredRevocability of Action By Written ConsentDissenters' RightsSolicitation of Written Consents and ExpensesTHE MERGERBackground of the MergerJoint Reasons for the MergerActionPoint's Reasons for the MergerRecommendation of the Board of Directors of ActionPointOpinion of ActionPoint Financial AdvisorInterests of ActionPoint Financial AdvisorCaptiva's Reasons for the MergerRecommendation of the Board of Directors of CaptivaInterests of C.E. Unterberg, TowbinInterests of Executive Officers and Directors of ActionPoint and Captiva in the MergerAccounting Treatment of the MergerForm of MergerMerger Consideration; Exchange RatioEffective Time of the MergerMaterial United States Federal Income Tax ConsiderationsAppraisal and Dissenters' RightsQuotation on The Nasdaq National MarketShares Eligible For Future SaleTHE MERGER AGREEMENTGeneralMerger Consideration; Determination of the Exchange RatioTreatment of Captiva Stock OptionsTreatment of Captiva WarrantsExchange of SharesAppraisal and Dissenters' RightsRepresentations and WarrantiesConduct Prior to the Effective TimeLimitations on Considering Other Takeover ProposalsOther CovenantsConditions to Completion of the MergerTerminationTermination Fee and Expense ReimbursementAmendment and WaiverRelated Matters after the MergerOTHER AGREEMENTSVoting AgreementsAffiliate AgreementsLock-Up AgreementsEmployment Offer LettersSeverance AgreementsAmendment to Rights AgreementTHE NOTE CONVERSIONGeneralBackground of the Note ConversionReasons for the Note ConversionFairness Opinion of Houlihan Lokey Howard and ZukinPrincipal Terms of the Note AmendmentThe Amended Senior NotesThe Amended Convertible NotesPrincipal Terms of the Note Conversion AgreementADOPTION OF CAPTIVA'S NEW OPTION PLAN, AMENDMENT OF CAPTIVA'S EXISTING OPTION PLAN AND REPRICING OF CAPTIVA OPTIONSAMENDMENT TO CAPTIVA'S ARTICLES OF INCORPORATIONAMENDMENT TO ACTIONPOINT'S CERTIFICATE OF INCORPORATIONINFORMATION CONCERNING ACTIONPOINTActionPoint's BusinessBoard Meetings and CommitteesDirector RemunerationExecutive Compensation and Related Information for ActionPoint's Executive OfficersCompensation Committee Interlocks and Insider ParticipationChange in Control Arrangements and Employment ContractsExisting Severance AgreementsReport of ActionPoint's Compensation CommitteeReport of Actionpoint's Audit CommitteeActionPoint's Related-Party TransactionsCompliance with Section 16(a) of the Securities Exchange Act of 1934INFORMATION CONCERNING CAPTIVACaptiva's BusinessCaptiva Management's Discussion and Analysis of Financial Conditions and Results of OperationsDirector RemunerationExecutive Compensation and Related Information for Captiva's Executive OfficersChange in Control Arrangements and Employment ContractsCaptiva's Related-Party TransactionsVoting SecuritiesINFORMATION CONCERNING THE COMBINED COMPANYManagement of the Combined Company after the MergerEquity Compensation Plans of the Combined CompanyUNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATAUnaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2001Unaudited Pro Forma Condensed Consolidated Statement of Operations For The Year Ended December 31, 2001Notes To Unaudited Pro Forma Combined Condensed Financial StatementsSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF ACTIONPOINT PRIOR TO THE MERGERSECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT OF CAPTIVA PRIOR TO THE MERGERSECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT OF OF THE COMBINED COMPANY PRIOR TO THE MERGERDESCRIPTION OF ACTIONPOINT CAPITAL STOCKCommon StockPreferred StockAnti-Takeover Effects of Certain Provisions of Delaware Law and ActionPoint's Certificate of Incorporation and BylawsLimitation of Liability and Indemnification MattersTransfer Agent and RegistrarStockholder Rights PlanSELLING STOCKHOLDERSCOMPARISON OF RIGHTS OF HOLDERS OF CAPTIVA COMMON STOCK AND ACTIONPOINT COMMON STOCKOTHER STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF ACTIONPOINT STOCKHOLDERSProposal to Elect DirectorsProposal to Ratify the Selection of ActionPoint's Independent Public AccountantsProposal to Amend and Restate ActionPoint's Employee Stock Purchase PlanOther MattersSTOCKHOLDER PROPOSALS FOR ACTIONPOINT'S 2003 ANNUAL MEETING OF STOCKHOLDERSLEGAL MATTERSEXPERTSWHERE YOU CAN FIND MORE ACTIONPOINT INFORMATIONINDEX TO CAPTIVA FINANCIAL STATEMENTS

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