Exhibit
10.3


 


ESCROW AGREEMENT


 


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


 


BACKGROUND


 


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


 


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


 


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


 


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


 


STATEMENT OF AGREEMENT


 


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


 


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


 


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


 

















 


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


 


“Investors’ Representative” shall mean the Depositor.


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


 


Remainder of Page Intentionally Left Blank


 


10

















 


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


 


	
   

  	
  EMANCIPATION CAPITAL LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  EMANCIPATION CAPITAL,
  LLC,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Charles Frumberg 

  
	
   

  	
  Title:

  	
  Managing Member

  
					



 


[CORPORATE SEAL]


 


 


ATTEST:


 


	
   

  	
   

  
	
  Secretary

  
	
   

  
	
   

  	
  ARTEMIS INTERNATIONAL SOLUTIONS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Secretary

  
					



 


11

















 


	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  as Escrow Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title: Assistant Vice President

  



 


12

















 


SCHEDULE A


1.                                       Escrow
Funds.


 


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


 


Escrow Funds wiring
instructions:                                                                                                                                                          Wachovia
Bank, National Association

1525 W. W.T. Harris Boulevard

Charlotte, NC 28282

ABA# 053 000 219

Credit a/c 5000000016439 - Incoming

FFC:                 EMAN/ARTEMIS ESC 3572002227
Attn: 
CT- 4882 New York


 


2.                                       Escrow
Agent Fees.


 


	
  Acceptance Fee:

  	
   

  	
  $

  	
  1000

  	
   

  
	
  Annual Escrow
  Fee:

  	
   

  	
  $

  	
  2,500

  	
   

  
	
  Out-of-Pocket
  Expenses:

  	
   

  	
  $

  	
   

  	
   

  
	
  [Transactional
  Costs]:

  	
   

  	
  $

  	
   

  	
   

  
	
  [Other
  Fees/Attorney, etc.]:

  	
   

  	
  $

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
   

  	
   

  



 


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


 


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


 


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


 


3.                                       Taxpayer
Identification Numbers.


 


Depositor:                                                                                        02-069-5738


 


Recipient:                                                                                           13-402-3714


 


A-1

















 


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


 


5.                                       Investment
Instructions


 


Goldman Sachs
Financial Square Government Administration Class Fund #466:


 


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


 


6.                                       Representatives.


 


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


 


	
   

  	
   

  	
   

  	
   

  
	
  Name: Charles Frumberg

  	
  Specimen Signature

  



 


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


 


	
   

  	
   

  	
   

  	
   

  
	
  Name: Charles Savoni

  	
  Specimen signature

  



 


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


 


1.  Date of Birth


2.  Address


3.  Mailing Address, if different


4.  Social Security Number


 


A-2

















 


8.                                       Notice
Addresses.


Principal Place of
Business,


if different


If to Depositor at:                                                c/o Emancipation Capital LLC

153 East 53rd Street

26th Floor

New York, New York  10022


Attention:   Jonathan Rothenberg

Charlie Frumberg


Facsimile:  (212) 521-5036

Telephone: (212) 521-5033


 


with a copy (for informational purposes) to:


 


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 
10022


Telephone:                                    (212) 756-2000


Facsimile:                                            (212)
593-5955


Attention:                                         Michael R.
Littenberg, Esq.


 


If to Recipient at:                                                   Artemis International

Solutions Corporation
4041 MacArthur Blvd.,
Suite 401
Newport Beach, California
92660

ATTN: Charles S. Savoni

Facsimile: 949-660-6503

Telephone: 949-660-6550

E-mail: charles.savoni@us.aisc.com


 


If to the Escrow


Agent at:                                                                                              Wachovia
Bank, National Association, as Escrow Agent

One Penn Plaza, Suite 1414

New York, NY 10119

ATTENTION: Corporate Trust – NY4040

Facsimile: 212-273-7015


 


A-3

















 


Exhibit A


 


[Letterhead]


 


[Date]


 


 


Dear Escrow Agent:


 


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


 


 


Sincerely,


 


 


	
  EMANCIPATION CAPITAL LP

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  EMANCIPATION CAPITAL,
  LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Charles Frumberg

  
	
   

  	
  Title:

  	
  Managing Member

  
				



 

















 


Exhibit B


 


[Letterhead]


 


[Date]


 


 


Dear Escrow Agent:


 


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


 


 


Sincerely,


 


 


	
  EMANCIPATION CAPITAL LP

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  EMANCIPATION CAPITAL,
  LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Charles Frumberg

  
	
   

  	
  Title:

  	
  Managing Member

  
				



 












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


 


2