Document:

Exhibit 10.1

 

AGREEMENT AND PLAN OF MERGER

 

AMONG

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION,

 

TRILOGY, INC.

 

AND

 

RCN ACQUISITION, INC.

 

dated as of March 10, 2006

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  The Merger

  	
  1

  
	
   

  	
  Section 1.01.

  	
  The Merger

  	
  1

  
	
   

  	
  Section 1.02.

  	
  Closing

  	
  1

  
	
   

  	
  Section 1.03.

  	
  Effective Time of the Merger

  	
  2

  
	
   

  	
  Section 1.04.

  	
  Effects of the Merger; Further Action

  	
  2

  
	
   

  	
  Section 1.05.

  	
  Certificate of Incorporation; Bylaws

  	
  2

  
	
   

  	
  Section 1.06.

  	
  Directors and Officers

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  Treatment of Shares

  	
  2

  
	
   

  	
  Section 2.01.

  	
  Effect of the Merger on Capital Stock

  	
  2

  
	
   

  	
  Section 2.02.

  	
  Exchange of Certificates

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  Representations
  and Warranties of the Company

  	
  6

  
	
   

  	
  Section 3.01.

  	
  Organization and Qualification

  	
  6

  
	
   

  	
  Section 3.02.

  	
  Capitalization; Subsidiaries

  	
  7

  
	
   

  	
  Section 3.03.

  	
  Authority Relative to this Agreement

  	
  9

  
	
   

  	
  Section 3.04.

  	
  No Conflict; Required Filings and Consents

  	
  10

  
	
   

  	
  Section 3.05.

  	
  SEC Filings; Financial Statements; Internal Controls

  	
  10

  
	
   

  	
  Section 3.06.

  	
  Absence of Certain Changes or Events

  	
  12

  
	
   

  	
  Section 3.07.

  	
  Absence of Litigation

  	
  12

  
	
   

  	
  Section 3.08.

  	
  Tax Matters

  	
  12

  
	
   

  	
  Section 3.09.

  	
  Employee Matters

  	
  14

  
	
   

  	
  Section 3.10.

  	
  Environmental

  	
  17

  
	
   

  	
  Section 3.11.

  	
  Compliance with Laws; Approvals from Governmental Authorities

  	
  18

  
	
   

  	
  Section 3.12.

  	
  Contracts

  	
  18

  
	
   

  	
  Section 3.13.

  	
  Affiliate Transactions

  	
  20

  
	
   

  	
  Section 3.14.

  	
  Fairness Opinion

  	
  20

  
	
   

  	
  Section 3.15.

  	
  Brokers and Transaction Expenses

  	
  21

  
	
   

  	
  Section 3.16.

  	
  Vote Required; Company Board Recommendation

  	
  21

  
	
   

  	
  Section 3.17.

  	
  Intellectual Property

  	
  21

  
	
   

  	
  Section 3.18.

  	
  Insurance

  	
  23

  
	
   

  	
  Section 3.19.

  	
  Property

  	
  23

  
	
   

  	
  Section 3.20.

  	
  State Takeover Statutes

  	
  24

  
	
   

  	
  Section 3.21.

  	
  Change of Control

  	
  24

  
					

 

i

 

	
   

  	
  Section 3.22.

  	
  Commercial Relationships

  	
  24

  
	
   

  	
  Section 3.23.

  	
  Illegal Payments

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  Representations
  and Warranties of Newco

  	
  24

  
	
   

  	
  Section 4.01.

  	
  Organization

  	
  25

  
	
   

  	
  Section 4.02.

  	
  Authority Relative to this Agreement

  	
  25

  
	
   

  	
  Section 4.03.

  	
  No Conflict; Required Filings and Consents

  	
  25

  
	
   

  	
  Section 4.04.

  	
  Brokers

  	
  25

  
	
   

  	
  Section 4.05.

  	
  Sufficient Funds

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  Conduct of
  Business Pending the Merger

  	
  26

  
	
   

  	
  Section 5.01.

  	
  Covenants of the Company

  	
  26

  
	
   

  	
  Section 5.02.

  	
  Conduct of Business by Newco

  	
  29

  
	
   

  	
  Section 5.03.

  	
  Cooperation, Notification

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  Additional
  Agreements

  	
  30

  
	
   

  	
  Section 6.01.

  	
  Stockholders’ Meeting; Preparation of the Proxy Statement; SEC
  Filings

  	
  30

  
	
   

  	
  Section 6.02.

  	
  Access to Information; Confidentiality of Information

  	
  31

  
	
   

  	
  Section 6.03.

  	
  No Solicitation of Transactions

  	
  32

  
	
   

  	
  Section 6.04.

  	
  Employee Benefits Matters

  	
  35

  
	
   

  	
  Section 6.05.

  	
  Directors’ and Officers’ Indemnification and Insurance

  	
  35

  
	
   

  	
  Section 6.06.

  	
  Regulatory Approvals and Other Matters

  	
  36

  
	
   

  	
  Section 6.07.

  	
  Public Announcements

  	
  37

  
	
   

  	
  Section 6.08

  	
  Resignations

  	
  37

  
	
   

  	
  Section 6.09

  	
  Financing

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  Conditions

  	
  38

  
	
   

  	
  Section 7.01.

  	
  Conditions to Each Party’s Obligation to Effect the Merger

  	
  38

  
	
   

  	
  Section 7.02.

  	
  Conditions to Obligation of Newco to Effect the Merger

  	
  38

  
	
   

  	
  Section 7.03.

  	
  Conditions to Obligation of the Company to Effect the Merger

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  Termination,
  Amendment and Waiver

  	
  41

  
	
   

  	
  Section 8.01.

  	
  Termination

  	
  41

  
	
   

  	
  Section 8.02.

  	
  Certain Fees and Expenses

  	
  42

  
	
   

  	
  Section 8.03.

  	
  Effect of Termination

  	
  43

  
	
   

  	
  Section 8.04.

  	
  Amendment

  	
  43

  
	
   

  	
  Section 8.05.

  	
  Waiver

  	
  43

  
					

 

ii

 

	
  ARTICLE IX

  	
  General
  Provisions

  	
  43

  
	
   

  	
  Section 9.01.

  	
  Non-Survival

  	
  43

  
	
   

  	
  Section 9.02.

  	
  Fees and Expenses

  	
  44

  
	
   

  	
  Section 9.03.

  	
  Certain Definitions

  	
  44

  
	
   

  	
  Section 9.04.

  	
  Notices

  	
  44

  
	
   

  	
  Section 9.05.

  	
  Interpretation

  	
  46

  
	
   

  	
  Section 9.06.

  	
  Severability

  	
  46

  
	
   

  	
  Section 9.07.

  	
  Entire Agreement

  	
  46

  
	
   

  	
  Section 9.08.

  	
  No Implied Representations or Warranties

  	
  46

  
	
   

  	
  Section 9.09.

  	
  Assignment; Binding Effect; Benefit

  	
  46

  
	
   

  	
  Section 9.10.

  	
  Schedules and Exhibits

  	
  46

  
	
   

  	
  Section 9.11.

  	
  Counterparts; Effect; Facsimile Signatures

  	
  46

  
	
   

  	
  Section 9.12.

  	
  Governing Law

  	
  47

  
	
   

  	
  Section 9.13.

  	
  Waiver of Jury Trial

  	
  47

  
	
   

  	
  Section 9.14.

  	
  Specific Performance

  	
  47

  
					

 

iii

 

Index of Defined Terms

 

	
   

  	
   

  	
  Section

  
	
  Actions

  	
   

  	
  3.07

  
	
  affiliate

  	
   

  	
  9.03(a)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Alternative Proposal

  	
   

  	
  6.03(a)

  
	
  Appraisal Shares

  	
   

  	
  2.01(f)

  
	
  Approvals

  	
   

  	
  3.04(b)

  
	
  Balance Sheet

  	
   

  	
  3.05(e)

  
	
  Balance Sheet Date

  	
   

  	
  3.05(e)

  
	
  business day

  	
   

  	
  9.03(b)

  
	
  Cancelled Warrant

  	
   

  	
  2.01(e)

  
	
  Certificate

  	
   

  	
  2.01(c)

  
	
  Certificate of Merger

  	
   

  	
  1.03

  
	
  Change in Board Recommendation

  	
   

  	
  6.03(d)

  
	
  Closing

  	
   

  	
  1.02

  
	
  Closing Cash

  	
   

  	
  7.02(h)

  
	
  Closing Date

  	
   

  	
  1.02

  
	
  Code

  	
   

  	
  3.08(c)

  
	
  Common Stockholder Approval

  	
   

  	
  3.16(a)

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company Board

  	
   

  	
  Recitals

  
	
  Company Board Recommendation

  	
   

  	
  3.16(b)

  
	
  Company Common Stock

  	
   

  	
  2.01(b)

  
	
  Company Contracts

  	
   

  	
  3.12(b)

  
	
  Company Employees

  	
   

  	
  3.09(a)

  
	
  Company IP

  	
   

  	
  3.17

  
	
  Company Plans

  	
   

  	
  3.09(a)

  
	
  Company Real Property

  	
   

  	
  3.19(b)

  
	
  Company Reports

  	
   

  	
  3.05(a)

  
	
  Company Securities

  	
   

  	
  3.02(b)

  
	
  Contracts

  	
   

  	
  3.04(a)

  
	
  Cowen

  	
   

  	
  3.14

  
	
  control

  	
   

  	
  9.03(c)

  
	
  Delaware Secretary of State

  	
   

  	
  1.03

  
	
  DGCL

  	
   

  	
  1.01

  
	
  Effective Time

  	
   

  	
  1.03

  
	
  Environmental Laws

  	
   

  	
  3.10(d)

  
	
  ERISA

  	
   

  	
  3.09(a)

  
	
  Environmental Liabilities

  	
   

  	
  3.10(d)

  
	
  Exchange Act

  	
   

  	
  3.04(b)

  
	
  Fairness Opinion

  	
   

  	
  3.14

  
	
  Filed Company Reports

  	
   

  	
  3.05(d)

  
	
  Foreign Benefit Plan

  	
   

  	
  3.09(m)

  
	
  GAAP

  	
   

  	
  3.05(b)

  
	
  Governmental Authority

  	
   

  	
  3.04(b)

  
	
  Hazardous Materials

  	
   

  	
  3.10(d)

  
	
  Indebtedness

  	
   

  	
  3.02(d)

  
	
  Insurance Cap

  	
   

  	
  6.05(b)

  
	
  Insurance Policies

  	
   

  	
  3.18

  
	
  Intellectual Property

  	
   

  	
  3.17

  
	
  Joseph

  	
   

  	
  3.15(a)

  
	
  Knowledge

  	
   

  	
  9.03(d)

  

 

iv

 

	
   

  	
   

  	
  Section

  
	
  Knowledge of Newco

  	
   

  	
  9.03(d)

  
	
  Knowledge of the Company

  	
   

  	
  9.03(d)

  
	
  Laurus Agreement

  	
   

  	
  Recitals

  
	
  Laws

  	
   

  	
  3.04(a)

  
	
  Liens

  	
   

  	
  3.02(c)

  
	
  Material Adverse Effect

  	
   

  	
  3.01(a)

  
	
  Merger

  	
   

  	
  Recitals

  
	
  Merger Consideration

  	
   

  	
  2.01(c)

  
	
  Newco

  	
   

  	
  Recitals

  
	
  Non-Disclosure Agreement

  	
   

  	
  6.02(b)

  
	
  Option

  	
   

  	
  2.01(d)

  
	
  Order

  	
   

  	
  3.07

  
	
  Parent

  	
   

  	
  Recitals

  
	
  Paying Agent

  	
   

  	
  2.02(a)

  
	
  Payoff Amount

  	
   

  	
  7.02(h)

  
	
  person

  	
   

  	
  9.03(e)

  
	
  Post-Closing Tax Period

  	
   

  	
  3.08(h)

  
	
  Pre-Closing Tax Period

  	
   

  	
  3.08(h)

  
	
  Preferred Stock

  	
   

  	
  2.01(b)

  
	
  Preferred Stockholder Approval

  	
   

  	
  3.16(a)

  
	
  Preferred Stock Consideration

  	
   

  	
  2.01(c)

  
	
  Proha

  	
   

  	
  Recitals

  
	
  Proha Agreement

  	
   

  	
  Recitals

  
	
  Proha Proposal

  	
   

  	
  6.03(a)

  
	
  Proha Proposal Termination Date

  	
   

  	
  6.03(a)

  
	
  Proxy Statement

  	
   

  	
  3.04(b)

  
	
  Public Software

  	
   

  	
  3.17

  
	
  Release

  	
   

  	
  3.10(d)

  
	
  Representatives

  	
   

  	
  6.01(e)

  
	
  Restraints

  	
   

  	
  7.01(b)

  
	
  SEC

  	
   

  	
  3.04(b)

  
	
  Section 203

  	
   

  	
  3.20

  
	
  Section 262

  	
   

  	
  2.01(f)

  
	
  Securities Act

  	
   

  	
  3.05(a)

  
	
  Stock Plans

  	
   

  	
  2.01(d)

  
	
  Stockholders’ Meeting

  	
   

  	
  6.01(a)

  
	
  Subject Litigation

  	
   

  	
  6.05(c)

  
	
  subsidiaries

  	
   

  	
  9.03(f)

  
	
  Subsidiary Securities

  	
   

  	
  3.02(b)

  
	
  Sufficient Funds

  	
   

  	
  4.05

  
	
  Superior Proposal

  	
   

  	
  6.03(a)

  
	
  Surviving Corporation

  	
   

  	
  1.01

  
	
  Tax Return

  	
   

  	
  3.08(m)

  
	
  Taxes

  	
   

  	
  3.08(m)

  
	
  Termination Date

  	
   

  	
  8.01

  
	
  Termination Fee

  	
   

  	
  8.02(b)

  
	
  Third Party

  	
   

  	
  6.03(a)

  
	
  Transaction Expenses

  	
   

  	
  3.15(b)

  
	
  Triggering Event

  	
   

  	
  8.01(g)

  
	
  Voting Agreement

  	
   

  	
  Recitals

  
	
  Warrant

  	
   

  	
  2.01(e)

  
	
  Warrant Consideration

  	
   

  	
  2.01(e)

  

 

v

 

AGREEMENT AND PLAN OF MERGER

 

AGREEMENT
AND PLAN OF MERGER, dated as of March 10, 2006 (this “Agreement”) by and among Artemis
International Solutions Corporation, a Delaware corporation (the “Company”), Trilogy, Inc., a Delaware corporation (“Parent”)and
RCN Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of
Parent (“Newco”).

 

WHEREAS, the Board
of Directors of the Company (together with any committee thereof, the “Company Board”), by the unanimous
vote of all directors other than Joseph Liemandt, Pekka Pere and Olle Odman,
who were recused, has (a) determined that (i) this Agreement and the
merger of Newco with and into the Company (the “Merger”)
are advisable and in the best interests of the Company and its stockholders and
(ii) the consideration to be received in the Merger by the Company’s
stockholders is fair to such stockholders, (b) approved and adopted this
Agreement and approved the Merger and the other transactions contemplated
hereby, and (c) recommended approval and adoption by the stockholders of the
Company of this Agreement, the Merger and the other transactions contemplated
hereby; and

 

WHEREAS, the board
of directors of Parent and the board of directors and sole stockholder of
Newco, as required, have unanimously approved this Agreement, the Merger and
the other transactions contemplated hereby; and

 

WHEREAS,
concurrently with the execution of this Agreement, and as a condition and
inducement to Newco’s willingness to enter into this Agreement, (i) certain
stockholders of the Company are entering into a stockholders agreement
(collectively, the “Voting Agreements”) with Newco, (ii) Proha Plc (“Proha”) is entering into that letter agreement dated as of
the date hereof (the “Proha Agreement”),and
(iii) Laurus Master Fund, Ltd. is entering into that letter agreement dated as
of the date hereof (the “Laurus Agreement”)
setting forth the payoff terms  and
termination of the indebtedness under the Secured Revolving Note dated as of
August 14, 2003 and the Secured Minimum Borrowing Note dated as of
August 14, 2003 and the termination of the 125,000 Warrants issued in
connection therewith.

 

NOW THEREFORE, in
consideration of the premises and the representations, warranties, covenants
and agreements contained herein, the parties hereto, intending to be legally
bound hereby, agree as follows:

 

ARTICLE I

THE MERGER

 

Section 1.01.   The
Merger.  Upon the terms and
subject to the conditions of this Agreement and in accordance with the Delaware
General Corporation Law (“DGCL”),
at the Effective Time (as defined in Section 1.03), Newco shall be merged with
and into the Company.  As a result of the
Merger, the separate corporate existence of Newco shall cease and the Company
shall survive the Merger (sometimes hereinafter referred to as the “Surviving Corporation”).

 

Section 1.02.   Closing.  Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 8.01 and subject to the satisfaction or waiver of the
conditions set forth in Article VII, the closing of the Merger (the “Closing”) will take place at 10:00 a.m.
on the fifth business day (the “Closing Date”)
after satisfaction or waiver of the conditions set forth in Article VII,
excluding conditions that, by their terms, cannot be satisfied until the
Closing, but subject to the satisfaction or waiver of such conditions, at the
offices of Kirkpatrick & Lockhart Nicholson Graham LLP, 599 Lexington
Avenue, New York, New York 10022, unless another date, time or place is
agreed to in writing by the parties.

 

 

Section 1.03.   Effective
Time of the Merger.  As soon
as practicable after the Closing, the parties shall cause the Merger to be
consummated by filing (a) a certificate of merger (the “Certificate of Merger”) with the
Secretary of State of the State of Delaware (the “Delaware Secretary of State”) pursuant to the DGCL, in
such form as required by and executed in accordance with the relevant
provisions of the DGCL (the date and time of the filing of the Certificate of
Merger with the Delaware Secretary of State, as applicable (or such later time
as is specified in the Certificate of Merger), being the “Effective Time”).

 

Section 1.04.   Effects
of the Merger; Further Action.  From
and after the Effective Time, the Merger shall have the effects set forth in
the DGCL.  Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
the properties, rights, privileges, powers and franchises of the Company and
Newco shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Newco shall become the debts, liabilities and duties
of the Surviving Corporation.  If at any
time after the Effective Time any further action is necessary to vest in the
Surviving Corporation the title to all property or rights of Newco or the
Company, the authorized officers and directors of the Surviving Corporation are
fully authorized in the name of Newco or the Company, as the case may be, to
take, and shall take, any and all such lawful action.

 

Section 1.05.   Certificate
of Incorporation; Bylaws.  (a)  At
the Effective Time, by virtue of the Merger and without any further action on
the part of the Company and Newco, the certificate of incorporation of the
Surviving Corporation shall be amended and restated to read the same as the
certificate of incorporation of Newco, as in effect immediately prior to the
Effective Time, until thereafter amended or repealed in accordance with its terms
and with the DGCL; provided, that as of the Effective Time the
certificate of incorporation shall provide that the name of the Surviving
Corporation is “Artemis International Solutions Corporation”.

 

(b)  At the
Effective Time, by virtue of the Merger and without any further action on the
part of the Company and Newco, the bylaws of Newco, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving Corporation
following the Merger, until thereafter amended or repealed in accordance with
their terms or the certificate of incorporation of the Surviving Corporation
following the Merger and as provided under the DGCL.

 

Section 1.06.   Directors
and Officers.  The directors
of Newco immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation following the Merger, and the officers of Newco
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation following the Merger, in each case until their respective
successors are duly elected or appointed or until their earlier death,
resignation or removal in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation.

 

ARTICLE II

TREATMENT OF SHARES

 

Section 2.01.   Effect
of the Merger on Capital Stock.  As
of the Effective Time, by virtue of the Merger and without any action on the
part of the Company, Newco or any holder of any shares of capital stock of the
Company or any shares of capital stock of Newco:

 

2

 

(a)  Common Stock
of Newco.  Each share of common stock
of Newco issued and outstanding immediately prior to the Effective Time shall
be converted into one validly issued, fully paid and non-assessable share of
common stock, par value $.001 per share, of the Surviving Corporation.

 

(b)  Cancellation
of Certain Company Common Stock. 
Each share of common stock, par value $.001 per share, of the Company
(the “Company Common Stock”) and each share of preferred stock,
par value $.001 per share (the “Preferred Stock”) that is owned by the Company and each
share of Company Common Stock and each share of Preferred Stock that is owned
by Newco or any subsidiary of Parent shall automatically be cancelled and
retired and shall cease to exist, and no cash or other consideration shall be
delivered or deliverable in exchange therefor.

 

(c)  Conversion of
Company Common Stock and Preferred Stock.

 

(i)   Subject to the provisions of this Section
2.01, each share of Company Common Stock, other than shares canceled pursuant
to Section 2.01(b) and other than Appraisal Shares, (as hereinafter defined)
issued and outstanding immediately prior to the Effective Time shall by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into the right to receive $1.60 per share in cash (the “Merger Consideration”), payable without
interest, to the holder of such share, upon surrender, in the manner provided
in Section 2.02, of a certificate formerly evidencing such share, other than
shares cancelled pursuant to Section 2.01(b) and other than Appraisal Shares (a
“Certificate”).

 

(ii)   Subject to the provisions of this Section
2.01, each share of Preferred Stock, other than shares canceled pursuant to
Section 2.01(b), issued and outstanding immediately prior to the Effective Time
shall by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $2.20 per share in cash (the “Preferred Stock Consideration”),
payable without interest, to the holder of such share, upon surrender, in the
manner provided in Section 2.02, of a certificate formerly evidencing such
share.

 

(d)  Treatment of
Stock Options and Other Employee Equity Rights.

 

(i)   Immediately prior to the Effective Time,
each outstanding option to acquire Company Common Stock held by any Company
Employee (as defined in Section 3.09(a)) or by any other person (an “Option”)
granted or assumed under the Company’s 2000 Stock Option Plan and/or the
Company’s 2000 Non-Employee Directors’ Stock Option Plan, the Enterspect
Corporation 1998 Stock Option Plan, and any Opus360 Stock Option Plan, or
otherwise (collectively, as amended and restated, the “Stock Plans”), whether
or not then exercisable, shall be cancelled by the Company, and except as
otherwise agreed by Newco and the holder, the holder thereof shall be entitled
to receive as soon as practicable after the Effective Time from the Surviving
Corporation following the Merger in consideration for such cancellation an amount
in cash equal to the product of (a) the number of shares of Company Common
Stock previously subject to each such Option and (b) the excess, if any, of the
Merger Consideration per share over the exercise price per share of Company
Common Stock previously subject to such Option (collectively, the “Option
Consideration” (it being understood that if any such exercise price exceeds the
Merger Consideration per share, the amount payable in respect of such Option
shall be zero), reduced by the amount of any withholding or other Taxes (as
defined in Section 3.08(n)) required by Law (as defined in Section 3.04(a)) to
be withheld (it being understood that (i) with respect to an Option held by a
person whose employment by the Company or its subsidiaries was terminated prior
to the Effective Time, consideration shall only be paid with respect to the
portion of such Option that was outstanding immediately prior to the Effective
Time and was vested as of the time such person’s employment relationship with
the Company or its subsidiaries terminated

 

3

 

and (ii) with respect to an
Option held by a person in the Company’s or a subsidiary’s employ as of the
Effective Time, any such Option shall become 100% exercisable immediately prior
to cancellation, except to the extent an Option by the terms of its grant
documents is specifically subject to less acceleration than is provided for
under the terms of the Stock Plan pursuant to which such Option was granted, in
which case consideration shall be paid only with respect to the portion of such
Option which vests pursuant to the terms of such grant documents).   The Company shall use such procedures as it
deems necessary and consistent with the terms of the respective Stock Plan to
implement the provisions contemplated herein. 
Immediately following the Effective Time, the Company shall deposit in a
bank account an amount of cash, if any, equal to the Option Consideration for
the payment of any options that are eligible for Option Consideration (subject
to any applicable withholding Tax), together with instructions that such cash
be promptly distributed following the Effective Time to the holders of such
options that are eligible for Option Consideration in accordance with this Section
2.01(d).

 

(ii)   The Company shall take all such action and
provide all such notices as is necessary prior to the Effective Time to,
effective immediately prior to the Effective Time, cancel the Options as
contemplated by Section 2.01(d), and effective as of the Effective Time,
terminate all Stock Plans so that on and after the Effective Time no Company
Employee or other person shall have any Option to purchase shares of Company
Common Stock or any other equity interest in the Company under any Stock Plan.

 

(e)  Treatment of
Warrants.  Each warrant to purchase
shares of Company Common Stock or Preferred Stock that is outstanding as of the
Effective Time (a “Warrant”), other than the Cancelled Warrants,
shall be converted at the Effective Time into the right to receive a cash
amount, if any, equal to the Warrant Consideration (as hereinafter defined) for
each share of Company Common Stock then subject to such Warrant.  Prior to the Effective Time, the Company
shall take all necessary action and timely provide all notices to effect the
conversion of such Warrants as contemplated by this Section 2.01(e).
Immediately following the Effective Time, the Company shall deposit in a bank
account an amount of cash, if any, equal to the sum of the aggregate Warrant Consideration
for each such Warrant then outstanding (subject to any applicable withholding
Tax), together with instructions that such cash be promptly distributed
following the Effective Time to the holders of such Warrants in accordance with
this Section 2.01(e).  For purposes of
this Agreement, “Warrant Consideration” means, with respect to any share of
Company Common Stock issuable under a particular Warrant, an amount equal to
the excess, if any, of: (i) the Merger Consideration per share of Company Common
Stock, over (ii) the exercise price payable in respect of such share of Company
Common Stock issuable under such Warrant (it being understood that if the
exercise price payable in respect of such share of Company Common Stock
issuable under such Warrant exceeds the Merger Consideration per share, the
Warrant Consideration in respect of such Warrants shall be zero).  Notwithstanding the foregoing, each Warrant
subject to a Voting Agreement, a Stockholder Letter Agreement or the Laurus
Agreement (a “Cancelled Warrant”)
shall be cancelled and extinguished as of the Effective Time and shall not be
entitled to receive any consideration therefor, except as provided in the
Laurus Agreement.

 

(f)  Appraisal
Rights.  Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock and Preferred
Stock issued and outstanding immediately prior to the Effective Time that are
held by any holder who is entitled to demand and properly demands appraisal of
such shares pursuant to, and who complies in all respects with, the provisions
of Section 262 of the DGCL (“Section 262”)
shall not be converted into the right to receive the Merger Consideration per
share as provided in Section 2.01(c), but instead such holder shall be entitled
to payment of the fair value of such shares (the “Appraisal Shares”) in accordance with the provisions of
Section 262.  At the Effective Time, all
Appraisal Shares shall no longer be outstanding and shall automatically be
canceled and shall cease to exist, and each holder of Appraisal Shares shall
cease to have any rights with respect thereto,

 

4

 

except the right to receive the fair
value of such Appraisal Shares in accordance with the provisions of Section
262.  Notwithstanding the foregoing, if
any such holder shall fail to perfect or otherwise shall waive, withdraw or
lose the right to appraisal under Section 262 or a court of competent
jurisdiction shall determine that such holder is not entitled to the relief
provided by Section 262, then the right of such holder to be paid the fair
value of such holder’s Appraisal Shares under Section 262 shall cease and each
of such Appraisal Shares shall be deemed to have been converted at the
Effective Time into, and shall have become exchangeable for, the right to
receive the Merger Consideration per share as provided in Section 2.01(c).  The Company shall (i) deliver prompt notice
to Newco of any demands for appraisal of any shares of Company Common Stock or
Preferred Stock and (ii) give Newco the opportunity to participate in all
negotiations and proceedings with respect to any such demand.  Prior to the Effective Time, the Company
shall not, without the prior written consent of Newco, make any payment with
respect to, or settle or offer to settle, any such demands, or agree to do any
of the foregoing.

 

Section 2.02.   Exchange of
Certificates.  (a)  Deposit
with Paying Agent.  (a) Prior to the
Effective Time, Newco shall appoint a bank or trust company reasonably
acceptable to the Company to act as agent (the “Paying Agent”) for the payment of the Merger Consideration
upon surrender of the Certificates in accordance with this
Article II.  At or as soon as
practicable after the Effective Time, the Surviving Corporation shall deposit
with the Paying Agent an amount of cash required for the payment of the Merger
Consideration upon surrender of Certificates in accordance with this
Article II.  Any net profit
resulting from, or interest or income produced by, such investments will be
payable to the Surviving Corporation.

 

(b)  Exchange and
Payment Procedures.  As soon as
reasonably practicable after the Effective Time, the Paying Agent shall mail to
each holder of record of a Certificate (i) a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates held by such person shall pass, only upon proper
delivery of the Certificates to the Paying Agent and shall be in customary form
and have such other provisions as the Surviving Corporation may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration.  Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by the Surviving Corporation, together with such letter of
transmittal, duly completed and validly executed, and such other documents as
may reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash payable in
respect of the shares formerly represented by such Certificate pursuant to
Section 2.01(c), and the Certificate so surrendered shall forthwith be
canceled.  In the event of a transfer of
ownership of Company Common Stock or Preferred Stock that is not registered in
the share transfer books of the Company, the proper amount of cash may be paid
in exchange therefor to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other Taxes required by reason of the
payment to a person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of the Surviving Corporation that such
Tax has been paid or is not applicable. 
No interest shall be paid or shall accrue on the cash payable upon surrender
of any Certificate.

 

(c)  No Further
Ownership Rights in Company Common Stock or Preferred Stock.  Until surrendered as contemplated by Section
2.02(b), each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the Merger
Consideration as contemplated by this Article II and the holders of
Certificates shall not have any rights as stockholders in the Company.  The Merger Consideration paid upon the
surrender of a Certificate in accordance with the terms of this Article II
shall be deemed to have been paid at the Effective Time in full satisfaction of
all rights pertaining to the shares of Company Common Stock or Preferred Stock
formerly represented by such Certificate. 
At the close of business on the date on which the Effective Time occurs,
the share

 

5

 

transfer books of the Company shall be
closed, and there shall be no further registration of transfers on the share
transfer books of the Surviving Corporation of the shares of Company Common
Stock or Preferred Stock that were outstanding immediately prior to the
Effective Time.  If, after the close of
business on the date on which the Effective Time occurs, Certificates are
presented to the Surviving Corporation or the Paying Agent for transfer or any
other reason, they shall be canceled and exchanged as provided in this Article
II.

 

(d)  No Liability.  None of Newco, the Surviving Corporation and
the Paying Agent shall be liable to any person in respect of any cash delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar Law.  Any portion of the Merger
Consideration deposited with the Paying Agent pursuant to this Article II
which remains undistributed to the holders of the Certificates for six months
after the Effective Time (or immediately prior to such earlier date on which
any cash in respect of such Certificate would otherwise escheat to or become
the property of any Governmental Authority (as defined in Section 3.04(b))
shall be delivered to the Surviving Corporation, upon demand.  Any holders of Certificates who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation and only as general creditors thereof for payment of
their claim for cash, if any, to which such holders may be entitled.

 

(e)  Lost
Certificates.  If any Certificate
shall have been lost, stolen, defaced or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost, stolen,
defaced or destroyed and, if required by the Surviving Corporation, the posting
by such person of a bond in such reasonable amount as the Surviving Corporation
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall pay in respect of such
lost, stolen, defaced or destroyed Certificate the Merger Consideration.

 

(f)  Withholding
Rights.  The Surviving Corporation or
the Paying Agent shall be entitled to deduct and withhold any applicable Taxes
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock, Preferred Stock, Options or
Warrants.  To the extent that amounts are
so deducted and withheld, such amounts shall be treated for all purposes under
this Agreement as having been paid to the person in respect of which such
deduction and withholding was made.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set
forth in the disclosure schedule delivered by the Company to Parent and Newco
simultaneously with the execution of this Agreement, the Company hereby
represents and warrants to Parent and Newco as set forth below.

 

Section 3.01.   Organization
and Qualification.  (a)  Each
of the Company and each of its subsidiaries is duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its organization and
has the requisite power and authority necessary to own, lease and operate its
properties and assets and to carry on its business as it is now being
conducted.  Each of the Company and each
of its subsidiaries is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction where the character of its properties and
assets owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed or in good standing, individually or in the
aggregate, does not have and could not reasonably be expected to have a Material
Adverse Effect.  The term “Material Adverse Effect” means any
state of facts, change, development, event, effect, condition or occurrence
that is materially adverse to the business, properties, assets, condition
(financial or otherwise), prospects or results of operations of the

 

6

 

Company (or the Surviving Corporation) and its subsidiaries taken as a
whole or that could reasonably be expected to, directly or indirectly, prevent
or materially impair or delay the ability of the Company to perform its
obligations hereunder, except to the extent that such adverse effect arises
from general economic, legal or regulatory conditions affecting the  computer software industry generally that do
not have a disproportionate effect on the Company; provided that the
fact that the Company shall fail to meet financial projections for periods
subsequent to the date of this Agreement shall not, in and of itself,
constitute a Material Adverse Effect, but this proviso shall in no way exclude
from the definition of Material Adverse Effect or from what constitutes a
Material Adverse Effect any state of facts, change, development, event, effect,
condition or occurrence that gave rise to, contributed to or caused such failure
to meet financial projections.

 

(b)  The Company has
furnished to Newco a complete and correct copy of the certificate of
incorporation and the bylaws of the Company, and the certificates of
incorporation and the bylaws (or similar organizational documents) of each
subsidiary of the Company, in each case as currently in effect.  Said certificates of incorporation and bylaws
(or similar organizational documents) are in full force and effect and no other
organizational documents are applicable to or binding upon the Company or any
of its subsidiaries.  The Company and its
subsidiaries have not violated the provisions of its respective certificates of
incorporation or bylaws (or similar organizational documents).  The Company has made available to Newco
copies of the minutes of the meetings of the Company’s stockholders and of the
Company Board in calendar years 2004, 2005 and 2006, as well as the minutes of
the meetings of each committee, including the Audit and Compensation
Committees, of the Company Board in calendar years 2004, 2005 and 2006.

 

Section 3.02.   Capitalization;
Subsidiaries.  (a)  The
authorized capital stock of the Company consists of  50,000,000 shares of Company Common Stock,
par value $.001 per share, and 
25,000,000 shares of Preferred Stock. 
As of the date of this Agreement, (i) 10,877,087 shares of Company
Common Stock are issued and outstanding, all of which were duly authorized,
validly issued, fully paid and non-assessable, (ii) no shares of Company
Common Stock are held in the treasury of the Company, (iii) (A) 1,474,438
shares of Company Common Stock are issuable upon the exercise of outstanding
Options or payment of other outstanding equity or equity-based awards, granted
under the Company’s 2000 Incentive Stock Option Plan, and 3,956,116 shares of
Company Common Stock are reserved for issuance in connection with such Stock
Plan (including shares reserved in connection with the outstanding Options or
payment of other outstanding equity or equity-based awards, including dividend
equivalents, granted under such Stock Plan); (B) 183,960 shares of Company
Common Stock are issuable upon the exercise of outstanding Options or payment
of other outstanding equity or equity-based awards, granted under the Company’s
2000 Non-Employee Directors’ Stock Option Plan, and 300,000 shares of Company
Common Stock are reserved for issuance in connection with such Stock Plan
(including shares reserved in connection with the outstanding Options or
payment of other outstanding equity or equity-based awards, including dividend
equivalents, granted under such Stock Plan); (C) 32,811 shares of Company
Common Stock are issuable upon the exercise of outstanding Options or payment
of other outstanding equity or equity-based awards, granted under the Company’s
Enterspect Corporation 1998 Stock Option Plan, and 238,806 shares of Company
Common Stock are reserved for issuance in connection with such Stock Plan
(including shares reserved in connection with the outstanding Options or
payment of other outstanding equity or equity-based awards, including dividend
equivalents, granted under such Stock Plan); and (D) 46,983 shares of Company
Common Stock are issuable upon the exercise of outstanding Options or payment
of other outstanding equity or equity-based awards, under the Company’s assumed
Non-Qualified Stock Options under any Opus 360 Stock Option Plan, and no shares of Company Common Stock are
reserved for issuance in connection with such Stock Plan (including shares
reserved in connection with the outstanding Options or payment of other
outstanding equity or equity-based awards, including dividend equivalents,
granted under such Stock Plan), and (iv) 
535,952 shares of Company Common Stock are issuable upon the exercise of
535,932

 

7

 

outstanding Warrants pursuant to the warrant agreements set forth on
Schedule 3.02(a) and previously delivered in complete and correct form to
Newco.  As of the date of this Agreement,
4,090,908 shares of Preferred Stock are issued or outstanding, in connection
with the rights issued to the Series A Preferred Stockholders, by which
4,090,908 shares of Company Common Stock are reserved for issuance pertaining
to the conversion rights enjoyed by said Series A Preferred Stockholders.  Except as indicated in Schedule 3.02(a), the
Company has not made any adjustments pursuant to the antidilution provisions of
any of the Preferred Stock, Options, Warrants or Convertible Notes.  All of the outstanding equity securities of
the Company have been offered and issued in compliance with all applicable
securities laws, including the Securities Act and “blue sky” laws.  All outstanding shares of Company Common
Stock and Preferred Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive (or similar) rights.  No shares of Company Common Stock are
unvested or subject to a repurchase option, risk of forfeiture or other similar
condition under any applicable restricted stock purchase agreement or other
Contract with the Company.

 

(b)  Schedule 3.02(b)
sets forth a list, as of the close of business on February 28, 2006, of all
outstanding Options equity or equity-based awards granted under the Stock Plans
or otherwise, including dividend equivalents, and all outstanding Warrants, and
for each, as applicable:  (A) the
name of the applicable Stock Plan or other relevant agreement pursuant to which
such Option or Warrant was granted, assumed or issued; (B) the number of shares
of Company Common Stock subject thereto; (C) the date of grant or
issuance; (D) the expiration date; (E) the exercise price thereof;
(F) the name of the holder thereof; (G) the number of Options that
are vested; (H) the applicable vesting and acceleration provisions and (I)
if any equity based award or dividend right, a description of the terms
thereof.  True and complete copies of all
instruments (or the forms of such instruments) referred to in this section have
been furnished to Newco.  All Stock Plans
(including all amendments requiring approval) have been duly approved by the
Company’s stockholders to the extent such approval is required under applicable
Law.  All shares of Company Common Stock
subject to issuance in connection with the exercise of outstanding Options or
Warrants or payment of other outstanding equity or equity-based awards,
including dividend equivalents, granted under the Stock Plans or otherwise,
upon issuance on the terms and conditions specified in the Stock Plans or other
relevant agreement pursuant to which such Option or Warrant was granted,
assumed or issued, will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive (or similar) rights.  Except (i) as set forth above or (ii) as a
result of the exercise of the outstanding Options or Warrants or payment of
other outstanding equity or equity-based awards granted under the Stock Plans,
including dividend equivalents, in each case granted prior to the date hereof
and set forth on Schedule 3.02(b), there are outstanding (a) no shares of capital
stock or other voting securities of the Company, (b) no securities of the
Company convertible into or exchangeable or exercisable for shares of capital
stock or voting securities of the Company, (c) no options, warrants or other
rights to acquire from the Company, and no obligation of the Company to issue,
any capital stock or voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company, (d) no equity equivalents, interests in the ownership or earnings of
the Company or other similar rights (collectively, “Company Securities”), and (e) no
shares of capital stock, voting securities, equity interests or securities
convertible into or exchangeable or exercisable for shares of capital stock,
voting securities or equity interests of any of the subsidiaries of the Company
or any equity equivalents, interests in the ownership or earnings of any
subsidiary of the Company or other similar rights (collectively, “Subsidiary Securities”).  There are no outstanding obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Company Securities or any Subsidiary Securities or, except as set forth in
Schedule 3.02(a), to provide funds to or make any investment (in the form
of a loan, capital contribution or otherwise) in any subsidiary or any other
person.  Except as set forth in Schedule
3.02(b)(i), none of the Company or any of its subsidiaries is a party to any
stockholders’ agreement, voting trust agreement or registration rights
agreement relating to Company Securities or Subsidiary Securities or any other
Contract (as defined in Section 3.04(a)) relating to disposition, voting or
dividends with respect to any Company Securities or Subsidiary Securities or granting
to any person or group of persons the right to

 

8

 

elect, or to designate or nominate for
election, a director to the Company Board or any of its Subsidiaries.  All dividends on the Company Common Stock or
Preferred Stock that have been declared or have accrued prior to the date of
this Agreement have been paid in full.

 

(c)  Schedule 3.02(c)
contains a complete and correct list of each subsidiary of the Company and all
other entities in which the Company owns, directly or indirectly, any shares of
capital stock or other equity interests. 
Such list sets forth the jurisdiction of organization, the amount of all
shares of capital stock or other equity interests therein owned by the Company,
directly or indirectly, and, with respect to each subsidiary of the Company,
describes all of its outstanding Subsidiary Securities and lists the holders
thereof.  Except as set forth in
Schedule 3.02(c), each of the outstanding shares of capital stock or other
equity interests of each such subsidiary is duly authorized, validly issued,
fully paid and non-assessable and was issued free of preemptive (or similar
rights), and all such shares or other interests in any such subsidiary or
person that are owned by the Company or a subsidiary of the Company are owned
free and clear of all security interests, liens, claims, pledges, Contracts,
limitations in voting, dividend or transfer rights, charges or other
encumbrances of any nature whatsoever (“Liens”).

 

(d)  Schedule 3.02(d)
sets forth a complete and correct list, as of the date of this Agreement, of
each Contract pursuant to which any Indebtedness (as defined in this
Section 3.02(d)) of the Company or its subsidiaries is outstanding or may
be incurred, together with the amount outstanding thereunder as of the date of
this Agreement.  “Indebtedness” means (i) indebtedness for borrowed
money, whether secured or unsecured, (ii) obligations under conditional or
installment sale or other title retention Contracts or deferred purchase price
obligations relating to purchased property, (iii) capitalized lease
obligations, (iv) commitments under letters of credit,
(v) obligations under non-cancelable operating leases, and
(vi) guarantees of any of the foregoing of another person.  No event has occurred which either entitles,
or could entitle (with or without notice or lapse of time or both) the holder
of any Indebtedness described in Schedule 3.02(d) to accelerate, or which
does accelerate, the maturity of any such Indebtedness.  As of the date hereof there is not, and as of
the Effective Time there will not be, any Indebtedness of the Company except as
set forth in Schedule 3.02(d) and as may be incurred in accordance with Section
5.01 hereof.  Neither the Company nor any
subsidiary guaranties any Indebtedness of any person other than of the Company
or any wholly-owned subsidiary.  True and
complete copies of all instruments (or substantially identical forms of such
instruments) evidencing all Indebtedness of the Company and its subsidiaries
have been furnished to Newco.  There is
no Indebtedness of the Company with the right to vote (or, except for the
Convertible Notes, convertible into, or exchangeable for, securities having the
right to vote) on any matters on which holders of the Company Common Stock or
Preferred Stock may vote.

 

(e)  All actions to be taken by the Company prior
to the Effective Time pursuant to Sections 2.01(d) and (e) are permitted
pursuant to the terms of the Stock Plans and the Warrants.

 

Section 3.03.   Authority
Relative to this Agreement.  The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.  The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby 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 transactions so contemplated, except for
the Common Stockholder Approval and the Preferred Stockholder Approval (as
defined in Section 3.16(a)).  This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery hereof by Newco,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.

 

9

 

Section 3.04.   No
Conflict; Required Filings and Consents. 
(a)  The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby do not and will not: 
(i) conflict with or violate the certificate of incorporation or
the bylaws (or similar organizational documents) of the Company or any of its
subsidiaries; (ii) conflict with or violate any laws, statutes, rules,
regulations, ordinances or Orders (as defined in Section 3.07)
(collectively, “Laws”)
applicable to the Company or any of its subsidiaries or by which its or any of
their respective properties are bound or affected (assuming that all consents,
approvals and authorizations contemplated by clauses (i), (ii) and (iii) of
subsection (b) below have been obtained and all filings described in such
clauses have been made); or (iii) result in any breach or violation of,
constitute a default, require consent or result in the loss of a material
benefit under, give rise to any increased payment or any penalty or premium
under, give rise to a right to permit or require the purchase or sale of assets
or securities under, give rise to any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the properties or assets of the Company or any of its subsidiaries (in each
case, with or without notice or lapse of time or both) pursuant to, any
contract (written or oral), obligation, plan, undertaking, arrangement,
commitment, note, bond, mortgage, indenture, agreement, lease, other instrument
or Approval (as defined in Section 3.04(b)) (collectively, “Contracts”) to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties are bound or
affected, except in the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences that, individually or in
the aggregate, do not have and could not reasonably be expected to have a
Material Adverse Effect.

 

(b)  The execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby by the Company do not and will not
require any permit, license, authorization, certification, tariff, consent,
approval, concession or franchise (collectively, “Approvals”)
from, action by, filing with or notification to, any Federal, national, state,
or local government or regulator or any court, arbitrator, administrative
agency or commission or other governmental, quasi-governmental, taxing or
regulatory (including a stock exchange or other self-regulatory body)
authority, official or agency (including a public utility commission, public
services commission or similar regulatory body), domestic, foreign or
supranational (a “Governmental Authority”), except for (i) the filing with
the Securities and Exchange Commission (the “SEC”) of a proxy statement relating to the
transactions contemplated hereby (the “Proxy Statement”)
pursuant to the applicable requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”),
(ii)  the filing and recordation of the Certificate of Merger as required
by the DGCL, and (iii) such other Approvals, actions, filings or notifications
the failure of which to make or obtain, individually or in the aggregate, does
not have and could not reasonably be expected to have a Material Adverse
Effect.

 

Section 3.05.   SEC
Filings; Financial Statements; Internal Controls.  (a)    The Company has timely filed all forms,
reports, schedules, declarations, statements, applications and other documents
required to be filed with the SEC since January 1, 2004 (collectively, the
“Company Reports”), each of
which, when filed, complied in all material respects with the applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities
Act”) and the Exchange Act, each as in effect on the date so
filed.  None of the Company Reports
(including any financial statements or schedules included or incorporated by
reference therein), when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.  None of the Company’s subsidiaries is
required to file any forms, reports or documents with the SEC under the
Exchange Act.  As of the date of this
Agreement, there are no unresolved comments issued by the Staff of the SEC with
respect to any of the Company Reports.

 

10

 

(b)  Each of the
audited and unaudited financial statements (including any related notes)
included in the Company Reports, when filed, complied in all material respects
with all applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, has been prepared in accordance
with generally accepted accounting principles (“GAAP”) (except, in the case of
unaudited quarterly statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and, when filed, fairly presented the
consolidated financial position of the Company and its subsidiaries at the
respective date thereof and the consolidated results of its and their
operations and cash flows for the periods indicated (subject, in the case of
unaudited quarterly statements, to normal year-end audit adjustments, which
were not and are not expected to be material in amount).  As of the date of this Agreement, all of the
Company’s subsidiaries are consolidated for accounting purposes. The financial
books and records of the Company and its subsidiaries have been made available
to Newco and are true and correct in all material respects.

 

(c)  The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company’s
principal executive officer and its principal financial officer to allow timely
decisions regarding required disclosure; and, except as has been disclosed
prior to the date of this Agreement in reports filed by the Company with the
SEC in accordance with applicable SEC requirements, such disclosure controls
and procedures are effective to provide reasonable assurance that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms.  With respect to each Annual Report on Form
10-K, each Quarterly Report on Form 10-Q and each amendment of any such report
included in the Company Reports filed after the effective date of the Sarbanes-Oxley
Act of 2002, the principal executive officer and the principal financial
officer of Company have made all certifications required by the Sarbanes-Oxley
Act of 2002 and any related rules and regulations promulgated by the SEC.

 

(d)  Neither the
Company nor any of its subsidiaries nor, to the Knowledge of the Company, any
director, officer, agent, employee or other person acting on behalf of the
Company or any of its subsidiaries, has: 
(i) used any corporate or other funds for unlawful contributions,
payments or gifts, or made any unlawful expenditures relating to political
activity to government officials or others or established or maintained any
unlawful or unrecorded funds, in any case in violation of Section 30A of
the Exchange Act; or (ii) accepted or received any unlawful contributions,
payments, gifts or expenditures.  Except
as set forth in the Company Reports filed by the Company and publicly available
prior to the date of this Agreement (the “Filed
Company Reports”), in the period between the Company’s proxy
statement dated June 20, 2005 and the date of this Agreement, no event has
occurred that would be required to be reported under “Certain Relationships and
Related Transactions” pursuant to Item 404 of Regulation S-K
promulgated by the SEC.

 

(e)  Neither the
Company nor any of its subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise), except liabilities
or obligations:  (i) as and to the
extent set forth on the audited consolidated balance sheet of the Company and
its subsidiaries as of December 31, 2004 (such balance sheet, the “Balance Sheet”, and such date, the “Balance Sheet Date”) (including the
notes thereto) included in the Filed Company Reports; or (ii) incurred
after the Balance Sheet Date and prior to the date of this Agreement in the
ordinary course of business consistent with past practice, none of which
individually is material to the business, results of operations or financial
condition of the Company and its subsidiaries, taken as a whole, or
(iii) incurred after the date hereof and permitted under Section 5.01
hereof.

 

11

 

(f)  The Company has
made available to Newco a complete and correct copy of any amendments or
modifications which have not yet been filed with the SEC to Contracts which
previously had been filed by the Company with the SEC pursuant to the
Securities Act or the Exchange Act.

 

Section 3.06.   Absence
of Certain Changes or Events.  Since
January 1, 2005, except as specifically contemplated by this Agreement, the
Company and its subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice, and since such
date there has not been any state of facts, change, development, event, effect,
condition or occurrence that, individually or in the aggregate, has or could
reasonably be expected to have a Material Adverse Effect.  Except as (i) specifically contemplated
by this Agreement, or (ii) set forth in Schedule 3.06, there has not
occurred any action, event or failure to act that, if it had occurred after the
date of this Agreement, would have required the consent of Newco under Section
5.01.

 

Section 3.07.   Absence
of Litigation.  Except as set
forth in Schedule 3.07, there are no suits, claims, demands, actions,
proceedings, arbitrations, charges or investigations (“Actions”) pending or, to the Knowledge
of the Company, threatened against the Company or any of its subsidiaries or
any assets, properties or rights of the Company or any of its subsidiaries by
or before any Governmental Authority or arbitrator.  As of the date of this Agreement, no officer
or director of the Company is a defendant in any Action commenced by
stockholders of the Company or otherwise with respect to the performance of his
or her duties as an officer and/or director of the Company.  Except as set forth in Schedule 3.07,
there exist no Contracts with any of the directors and officers of the Company
or its subsidiaries that provide for indemnification by the Company or its
subsidiaries.  Except as set forth in
Schedule 3.07, neither the Company nor any of its subsidiaries nor any of
their respective properties or assets is or are subject to any order, writ,
judgment, injunction, ruling, decree, determination or award (“Order”) of any Governmental Authority.

 

Section 3.08.   Tax
Matters.  For purposes of this
Section 3.08, any reference to the Company or its subsidiaries shall include
any corporation that merged or was liquidated with and into the Company or any
of its subsidiaries.  Except as set forth
in Schedule 3.08:

 

(a)           All Tax Returns (as defined in Section
3.08(l)) required to be filed by or with respect to the Company and its
subsidiaries have been timely filed, and all such Tax Returns are complete and
correct.  The Company and its
subsidiaries have (i) timely paid all Taxes that are due, or that have been
asserted in writing by any Governmental Authority to be due, from or with respect
to it and (ii) provided adequate reserves in its financial statements, as
reflected on the face of the balance sheet of the Company Reports for any Taxes
that have not been paid, whether or not shown as being due on any Tax Returns,
in accordance with GAAP.  Since the date
of the Company Reports, the Company and its subsidiaries have not incurred any
liability for Taxes outside the ordinary course of business or otherwise
inconsistent with past custom and practice.

 

(b)  No claim for
unpaid Taxes has become a Lien against the property of the Company or any of
its subsidiaries or is being asserted against the Company or any of its
subsidiaries.

 

(c)           The statute of limitations with respect
to the Tax Returns of the Company and its subsidiaries and of each affiliated
group (within the meaning of Section 1504 of the Internal Revenue Code of 1986,
as amended (the “Code”)),
of which the Company and any of its subsidiaries are or have been a member for
all periods through the calendar years ending December 31, 2001 has
expired.  There

 

12

 

are no outstanding Contracts or waivers
extending the statutory period of limitation applicable to any claim for, or
the period for the collection or assessment of, income Taxes due from or with
respect to the Company or any subsidiary of the Company for any taxable period,
and no power of attorney granted by or with respect to the Company or any
subsidiary of the Company relating to income Taxes is currently in force.  Neither the Company nor any of its
subsidiaries currently is the beneficiary of any extension of time within which
to file any Tax Return.

 

(d)  No deficiencies
for Taxes with respect to Company or any of its subsidiaries have been claimed,
proposed or assessed by a Tax authority or other Governmental Authority in
writing.  No audit or other Action by any
Governmental Authority has formally commenced and no notification has been
given to the Company or any subsidiary of the Company that such an audit or
other Action is pending or threatened with respect to any Taxes due from or
with respect to the Company or any subsidiary of the Company or any Tax Return
filed by or with respect to the Company or any subsidiary of the Company.  No assessment of Tax has been proposed in
writing to the Company or any of its subsidiaries against the Company or any
subsidiary or any of their assets or properties.  Neither the Company nor any of its
subsidiaries has been informed in writing by any jurisdiction that the
jurisdiction believes that such entity was required to file any Tax Return in
such jurisdiction that was not filed.

 

(e)           Neither the Company nor any of its
subsidiaries is a party to, bound by or has any obligation under, any Tax
sharing, Tax indemnity or similar Contract.

 

(f)            Set forth in Schedule 3.08 are the
federal net operating loss carryforwards of the Company and its subsidiaries as
of December 31, 2005, the expiration date of such carryforwards and any
limitations to which they are subject under section 382 of the Code or
otherwise.

 

(g)  Neither the Company
nor any of its subsidiaries (i) is currently or has ever been a member of an
affiliated group (other than a group the common parent of which is the Company
or any of its subsidiaries) filing a consolidated federal income Tax Return or
(ii) has any liability for the Taxes of any person (other than the affiliated
group of which the Company is the common parent) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local or foreign Laws), or
as a transferee or successor, by Contract or otherwise.

 

(h)  Neither the
Company nor any of its subsidiaries is required to include amounts in income,
or exclude items of deduction, in a taxable period beginning after the Closing
Date (a “Post-Closing Tax Period”)
as a result of (i) a change in method of accounting, (ii) a closing agreement
as described in section 7121 of the Code (or corresponding or similar provision
of state, local or foreign Tax Laws), (iii) an installment sale or open
transaction arising in a taxable period ending on or before the Closing Date (a
“Pre-Closing Tax Period”),
(iv) a prepaid amount received, or paid, in a Pre-Closing Tax Period or (v)
deferred gains that could be recognized in a Post-Closing Tax Period.  There are no adjustments under Section 481 of
the Code (or any similar adjustments under any provision of the Code or the
corresponding foreign, state or local Tax laws) that will be required to be
taken into account by the Company or any of its subsidiaries in any period
ending after the Effective Time by reason of a change in method of accounting
in any Taxable period ending on or before the Effective Time.  Neither the Company nor any of its
subsidiaries is a party to any agreement, contract, arrangement or plan that has
resulted or would result, separately or in the aggregate, in any payment that
would not be deductible pursuant to Code Section 162(m).

 

(i)            Each of the Company and each of its
subsidiaries has withheld and paid over all Taxes required to have been
withheld and paid over, and complied in all respects with all information
reporting requirements, in connection with amounts paid or owing to any Company
Employee, creditor, independent contractor or other third party.

 

13

 

(j)            No property of the Company or any of
its subsidiaries is property that the Company or any of its subsidiaries or any
party to this transaction is or will be required to treat as being owned by
another person pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or is “tax exempt
use property” within the meaning of Code Section 168(h).  Neither the Company nor any of its
subsidiaries has been a United States real property holding corporation within
the meaning of Code section 897(c)(2) during the applicable period specified in
Code section 897(c)(1)(A)(ii).

 

(k)  Neither the
Company nor any of its subsidiaries has been a party to any distribution
occurring during the last two years in which the parties to such distribution
treated the distribution as one to which Section 355 of the Code is applicable.

 

(l)  The Company has
made available to Newco copies of all income and franchise Tax Returns of the
Company and its subsidiaries for the preceding four (4) taxable years.

 

(m)  The Company has
disclosed on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within
the meaning of Code Section 6662.  None
of the Company or an of its subsidiaries has engaged in a “reportable
transaction,” as set forth in Treasury Regulation Section 1.6011-4(b)(1), or
any transaction substantially similar to a reportable transaction.  Neither the Company nor any of its subsidiaries
has entered into, marketed or facilitated any transaction identified as a
“listed transaction” for purposes of Treasury Regulations Sections
1.6011-4(b)(2) or 301.6111-2(b)(2).

 

As used herein, “Taxes”
shall mean all taxes of any kind, including those on or measured by or referred
to as income, gross receipts, sales, use, ad valorem, franchise, profits,
privilege, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes, customs,
duties or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any Governmental Authority. 
As used herein, “Tax Return”
shall mean any return, declaration, report, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

 

Section 3.09.   Employee Matters.  (a)  Schedule 3.09(a) contains a
complete and correct list of each “employee benefit plan” (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)
(including “multiemployer plans” (within the meaning of ERISA Section 3(37))),
stock purchase, stock option, stock ownership, other equity or equity-based
compensation, severance, employment, retirement, pension, profit sharing,
change-of-control, fringe benefit, vacation, disability, death benefit,
hospitalization, medical, collective bargaining, bonus, incentive, deferred
compensation and all other employee benefit plans, Contracts, programs,
policies or other arrangements, whether or not subject to ERISA (including any
funding mechanism therefor now in effect or required in the future as a result
of the transaction contemplated by this Agreement or otherwise), sponsored,
maintained, contributed to or required to be maintained or contributed to by
the Company or any of its subsidiaries or with respect to which the Company or
any of its subsidiaries could reasonably be expected have any present or future
liability.  All plans, Contracts,
programs, policies and arrangements required to be set forth in Schedule
3.09(a) shall be collectively referred to as the “Company Plans.” Any current or former employee,
consultant, independent contractor of the Company or any of its subsidiaries is
referred to as a “Company Employee.”

 

(b)  Except for the
multiemployer plans specifically identified as such in Schedule 3.09(a) and any
Foreign Benefit Plan (as defined in Section 3.09(m)), neither the Company nor
any subsidiary or ERISA Affiliate (as defined below) of the Company has at any
time sponsored, contributed to, maintained

 

14

 

or had or has any liability (whether
contingent or otherwise) under (i) a 
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA
or (ii) an employee benefit plan that is subject to Part 3 of Subtitle I of
ERISA, or Section 412 of the Code or Title IV of ERISA.

 

(c)  With respect to
each Company Plan, the Company has delivered or made available (or, with
respect to certain Company Plans which are in the aggregate immaterial to the
Company and its subsidiaries taken as a whole, will within ten business days
following the date of this Agreement deliver or make available) to Newco a
complete and correct (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable, (i) any related trust
agreement, annuity contract or other funding instrument; (ii) the most recent
determination letter; (iii) any summary plan description and other written
communications (or description of any oral communication) by the Company or any
of its subsidiaries which modify in any significant respect the benefits
provided under the terms of any Company Plan in a manner not reflected in any
of the documents set forth in Schedule 3.09(a); and (iv) for the two most
recent years (A) the Form 5500 and attached schedules, (B) audited financial
statements and (C) actuarial valuation reports. 
The Artemis International Solutions Corporation 401(k) Savings Plan is
the only Company Plan intended to qualify under Section 401(a) of the
Code.  Such Company Plan was established by the adoption of a prototype
plan that is the subject of a favorable opinion letter issued by the IRS. 
The Company is permitted to rely on such opinion letter with respect to such
Company Plan and all amendments to such Company Plan that have been adopted
prior to the date hereof.

 

(d)  With respect to
all of the Company Plans, and except as, individually or in the aggregate, does
not have and could not reasonably be expected to have a Material Adverse
Effect, all Company Plans are in compliance with and have been administered in
form and operation in accordance with their terms and all requirements of
applicable Laws, including the Code, ERISA, and other applicable Laws
(including in compliance with all filing and reporting requirements), and none
of the Company nor any of its subsidiaries has received any claim or notice
that any such Company Plan is not in compliance with its terms and all
applicable Laws, regulations, rulings and other authority issued thereunder and
all other applicable governmental Laws, regulations and orders, and prohibited
transaction exemptions, including the requirements of ERISA and the Code and,
to the Knowledge of the Company, no event has occurred which will or could
cause any such Company Plan to fail to comply with such requirements.  Except as provided in Schedule 3.09(d), there
are no actions, disputes, suits, claims, arbitration or legal, administrative
or other proceeding or governmental investigation pending (other than routine
claims for benefits) or, to the Knowledge of Company, threatened alleging any
breach of the terms of any Company Plan or of any fiduciary duties thereunder
or violation of any applicable Law with respect to any such plan.

 

(e)  All
contributions, premiums and other payments required by Law or any Company Plan
to have been made under any such plan to any fund, trust or account established
thereunder or in connection therewith have been made by the due date thereof,
except as does not, or would not reasonably be expected to, result in a
Material Adverse Effect.

 

(f)  Except as
specifically contemplated by this Agreement or as set forth in Schedule
3.09(f), neither the execution and delivery of this Agreement and related
documents nor the consummation or performance of any of the transactions
contemplated by this Agreement will (whether alone or in connection with any
subsequent event(s)), result in  (i) the
payment to any Company Employee of any money or other property, or forgiveness
of indebtedness of any Company Employee (ii) the provision of any benefits or
other rights of any individual or (iii) the increase, acceleration or provision
of any payments, benefits or other rights provided to or for the benefit of any
Company Employee (including the acceleration of any funding obligations),
whether or not any such payment, right, benefit, increase, acceleration or
provision could constitute a “parachute payment” within the meaning of Section
280G of the Code.

 

15

 

(g)  Except as set
forth in Schedule 3.09(g), none of the payments contemplated by the Company
Plans or any other agreements to which the Company or any of its subsidiaries
is a party, would, individually or in the aggregate, constitute excess
parachute payments (as defined in section 280G of the Code (without regard to
subsection (b)(4) thereof)) or would exceed the amount deductible pursuant to
section 162(m) of the Code.

 

(h)  Except as set
forth in Schedule 3.09(h), there has been no amendment to, written
interpretation of or announcement (whether or not written) by the Company or
any of its subsidiaries relating to, or any change in employee participation or
coverage under, any Company Plan that would materially increase the expense of
maintaining such Company Plan above the level of the expense incurred in
respect thereof for the most recent fiscal year ended prior to the date of this
Agreement.

 

(i)  No “reportable
event” (as such term is defined in Section 4043 of the Code) or “prohibited
transaction” (as such term is defined in Section 406 of ERISA and Section 4975
of the Code) that could reasonably be expected to result in a material
liability to the Company and its subsidiaries has occurred with respect to any
Company Plan.  No “accumulated funding
deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of
the Code (whether or not waived)) has occurred with respect to any Company
Plan.  In the event that any
multiemployer plan identified in Item 7 of Schedule 3.09(a) was currently
terminated, neither the Company nor any of its subsidiaries would reasonably be
expected to have any liability with respect thereto.

 

(j)  Except as set
forth in Schedule 3.09(j), no Company Plan provides any of the following
retiree or post-employment benefits to any Company Employee: medical,
disability or life insurance benefits, except as required to avoid an excise
Tax under Section 4980B of the Code or as otherwise may be required pursuant to
any other applicable Laws.  To the
Knowledge of the Company, there has been no communication to any Company
Employee promising or guaranteeing any such retiree medical, disability or life
insurance on a permanent basis.

 

(k)  Except as set
forth in Schedule 3.09(k), to the Knowledge of the Company, there have been no
acts or omissions that would impair the ability of the Company, any subsidiary
(or any successor thereto) to unilaterally amend or terminate any Company Plan.

 

(l)  Except as set
forth in Schedule 3.09(l) or in the Company Reports filed and publicly
available prior to the date of this Agreement (or, with respect to such
Contracts which are in the aggregate immaterial to the Company and its
subsidiaries taken as a whole, as will be provided within ten business days of
the date of this Agreement), none of the Company and its subsidiaries is a
party to or otherwise bound by any Contract pursuant to which a labor
organization is certified under applicable labor Laws as a bargaining agent for
any Company Employee, nor is any such Contract presently being negotiated.  Except as provided in Schedule 3.09(l) or in
the Company Reports filed and publicly available prior to the date of this Agreement
or, except as, individually or in the aggregate, does not have and could not
reasonably be expected to have a Material Adverse Effect, (1) there is not, and
in the last five years has not been, a representation question respecting any
of the Company Employees, (2) to the Knowledge of the Company, there are no
campaigns being conducted to solicit cards from Company Employees to authorize
representation by a labor organization, (3) none of the Company and its
subsidiaries is the subject of any Action or Order by any Governmental
Authority or, to the Knowledge of the Company, threatened with, any Action or
Order, in each case relating to Company Employees or employment practices or
asserting that the Company or any of its subsidiaries has committed an unfair
labor practice or is seeking to compel the Company or any of its subsidiaries
to bargain with any labor union or labor organization, (4) there is not pending
or, to the Knowledge of the Company, threatened, nor has there been for the
past five years, any labor strike, dispute, walk-out, work stoppage, slow-down,
lockout, arbitration or grievance involving the Company or any of its
subsidiaries, (5) none of the Company and

 

16

 

its subsidiaries or their respective
representatives or employees has committed any unfair labor practices and (6)
the Company and its subsidiaries are in compliance with all applicable Laws and
collective bargaining Contracts regarding employment and employment practices,
terms and conditions of employment, wages and hours and occupational safety and
health.

 

(m)  Except as set
forth in Schedule 3.09(m), no Company Plan is maintained outside the
jurisdiction of the United States, or covers any employee residing or working
outside the United States (any such Company Plan, a “Foreign Benefit Plan”).  Except as provided in Schedule 3.09(l), all
Foreign Benefit Plans that are required to be funded are fully funded, and with
respect to all other Foreign Benefit Plans, adequate reserves therefore have
been established on the Company’s financial statements.

 

(n)  Prior to the
execution of this Agreement, the Company’s subsidiary in France, Artemis
International Sarl France, and its management have fully complied with all
information and consultation obligations incumbent upon them under French Law
regarding the Artemis International Sarl France works council (comité d’entreprise) including, without limitation, with
respect to the transactions contemplated by this Agreement.

 

Section 3.10.   Environmental.  (a)  To the Knowledge of the
Company and each of its subsidiaries, the Company and each of its subsidiaries
has complied and is in compliance in all material respects with all applicable
Environmental Laws.  To the Knowledge of
the Company and each of its subsidiaries, neither the Company nor any of its
subsidiaries has received any notice of any obligation, liability, order,
settlement, judgment, injunction or decree relating to or arising under
Environmental Laws.  To the Knowledge of
the Company and each of its subsidiaries, no facts, circumstances or conditions
exist with respect to the Company or any of its subsidiaries that would,
individually or in the aggregate, reasonably be expected to give rise to
Environmental Liabilities to the Company or its Subsidiaries in excess of
$25,000.

 

(b)  The Company has made
available to Newco copies of all environmentally related audits, studies,
reports, analyses and results of investigations that are in the Company’s or
any of its subsidiaries’ possession or under its or their control with respect
to currently or previously owned, leased or operated properties of the Company
or any of its subsidiaries.

 

(c)  To the Knowledge of the Company and each of
its subsidiaries, except to the extent the following would not, individually or
in the aggregate, reasonably be expected to give rise to Environmental
Liabilities in excess of $25,000, there is not now, nor has there been in the
past, on, in or under any real property currently or previously owned, leased
or operated by the Company or any of its subsidiaries or its or their
predecessors: (i) any underground storage tanks, above-ground storage tanks,
dikes or impoundments; (ii) any asbestos-containing materials; (iii) any
polychlorinated biphenyls; (iv) any radioactive substances; or (v) any other
substance that would give rise to any liabilities or investigative, corrective
or remedial obligations pursuant to any Environmental Laws.

 

(d)  For purposes of this Agreement:

 

(i)            “Environmental
Laws” means all Laws relating in any way to the environment,
preservation or reclamation of natural resources, the presence, management or
Release of, or exposure to, Hazardous Materials, or to human health and safety,
including the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.),
the Clean Water Act (33 U.S.C. § 1251 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C.

 

17

 

§ 136 et seq.), and the Occupational Safety and
Health Act (29 U.S.C. § 651 et seq.),
as each has been amended and the regulations promulgated pursuant thereto and
all analogous state, local or foreign laws and regulations as of the Closing
Date.

 

(ii)           “Environmental Liabilities”
means, with respect to any Person, all liabilities, obligations,
responsibilities, remedial actions, losses, damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand
by any other Person or arising under any Environmental Law, in any case to the
extent based upon or arising under any Environmental Law, environmental Permit
or order or agreement with any Governmental Authority or other Person under
Environmental Laws.

 

(iii)          “Hazardous Materials”
means any material, substance or waste that is regulated, classified or
otherwise characterized under or pursuant to any Environmental Law as
“hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive” or words of
similar meaning or effect, including petroleum and its by-products, asbestos,
polychlorinated biphenyls, radon, urea formaldehyde insulation,
chlorofluorocarbons and all other ozone-depleting substances.

 

(iv)          “Release”
means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing or migrating into or through
the environment or any natural or man-made structure.

 

Section 3.11.   Compliance
with Laws; Approvals from Governmental Authorities.  Except as set forth in Schedule 3.11 or except as individually or in the aggregate, does not have
and could not reasonably be expected to have a Material Adverse Effect, (a) the
Company and each of its subsidiaries and their relevant personnel and
operations are, and since January 1, 2002, have been, in compliance with all
Laws applicable to them or by which any of their respective properties are
bound or affected, (b) no notice, Action or assertion has been received by
the Company or any of its subsidiaries or, to the Knowledge of the Company, has
been filed, commenced or threatened against the Company or any of its
subsidiaries alleging any violation of any Law applicable to them or by which
their respective properties are bound or affected, (c) the Company and its
subsidiaries have all Approvals from any Governmental Authority necessary or
advisable to conduct their businesses as now being conducted and to own, lease
or operate their properties and assets, and there has occurred no violation of,
default (with or without notice or lapse of time or both) under, or event
giving to any person any right of termination, amendment or cancellation (with
or without notice or lapse of time or both) of any such Approval and
(d) neither the Company nor any of its subsidiaries has received notice of
any revocation or modification of any Approval material to the Company and its
subsidiaries taken as a whole. 
Notwithstanding any provision of this Section 3.11 to the contrary, the
provisions of this Section 3.11 do not extend to matters covered by
Section 3.08, Section 3.09 or Section 3.10.

 

Section 3.12.   Contracts.  (a)  Schedule 3.12
contains a complete and correct list of the following Contracts to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or its or any of their respective properties are bound or
affected as of the date of this Agreement:

 

(i)   Contracts containing covenants restricting
the payment of dividends or limiting the freedom of the Company or any of its
subsidiaries or any of their respective affiliates to engage in any line of
business or compete with any person or operate at any location or hire or solicit
for employment any person, or that contains any “most favored nation”
provisions granted by the Company or any of its subsidiaries or pursuant to
which the Company or any of its subsidiaries is or would be after the Closing
restricted in any material respect with respect to the development,
manufacture, marketing or distribution of their respective products or
services;

 

18

 

(ii)   joint venture agreements, limited liability
company agreements, partnership agreements or similar agreements;

 

(iii)   Contracts for the acquisition or
disposition, directly or indirectly (by merger or otherwise) of assets or
capital stock or other equity interests of another person for aggregate
consideration in excess of $100,000, other than Contracts for the procurement
or sale of assets in the ordinary course of business;

 

(iv)   Contracts with any Governmental Authority
relating to the setting of rates of general applicability, the payment of
dividends or the incurrence of Indebtedness;

 

(v)   Contracts outside the ordinary course of
business involving expenditures, liabilities or revenues reasonably expected to
be in excess of $100,000;

 

(vi)   Each indemnification, employment, severance
or other Contract with any director, officer or other affiliate of the Company
or its subsidiaries;

 

(vii)   Each loan or credit agreement, mortgage,
indenture, note or other Contract or instrument evidencing indebtedness for
borrowed money by the Company or any of its subsidiaries or any Contract
pursuant to which indebtedness for borrowed money is guaranteed by the Company
or any of its subsidiaries or any Contract relating to the mortgaging, pledging
or otherwise placing a Lien on any material asset or material group of assets
of the Company or any of its subsidiaries;

 

(viii)   Contracts under which the Company or any of
its subsidiaries has advanced or loaned any amount to, or guaranteed any
obligations of, any third party (excluding, for avoidance of doubt, trade
accounts receivable incurred in the ordinary course of business);

 

(ix)   Each “single source” supply Contract of the
Company or any of its subsidiaries;

 

(x)   Contracts for any development, marketing,
resale, distribution, sales representative or similar arrangement;

 

(xi)   Contracts granting a third party any license
to any of the Company’s material Intellectual Property that are not limited to
the internal use of such third party, other than in the ordinary course of
business consistent with past practice;

 

(xii)   Contracts pursuant to which the Company or
any of its subsidiaries has been granted by a third party any license to any
material Intellectual Property; except for Contracts for “off-the shelf” or
generally available commercial software licensed to the Company or any of its
subsidiaries on standard terms for an aggregate value of less than $10,000;

 

(xiii)   Contracts (A) providing for any license or
franchise granted by the Company or any of its subsidiaries pursuant to which
the Company or any of its subsidiaries has agreed or is required to provide any
third party with access to source code or to provide for such source code to be
put in escrow or (B) containing a provision having the effect of providing that
the consummation of any of the transactions contemplated under this Agreement,
or the execution, delivery or effectiveness of this Agreement will require that
a third party be provided with access to source code or that any such source
code be released from escrow and provided to any third party;

 

19

 

(xiv)   Each collective bargaining agreement;

 

(xv)   Each lease or rental Contract involving real
property or personal property and payments in excess of $50,000 per year or
$100,000 over the term of such Contract;

 

(xvi)   Contracts pursuant to which the Company or
any of its subsidiaries receives consulting or maintenance services that is not
terminable by the Company or such Subsidiary on notice of 90 days or less, has
a term of more than one year or involves payments by the Company or any of its
subsidiaries in excess of $50,000 per year or $100,000 over the term of such
Contract;

 

(xvii)   Contracts providing for a maintenance term
longer than twelve months; and

 

(xviii)   Each commitment or agreement to enter into
any of the foregoing.

 

(b)  Complete and
correct copies of the written Contracts required to be identified in any
schedule to this Agreement (all such Contracts, collectively, the “Company Contracts”)  have been delivered or made available to
Newco.

 

(c)  Neither the
Company nor any of its subsidiaries is and, to the Knowledge of the Company, no
other party is in default under, or in breach or violation of, and neither the
Company nor any of its subsidiaries has received written notice that it has breached,
violated or defaulted under, any of the terms or conditions of any Company
Contract and, to the Knowledge of the Company, no event has occurred which
would result in any breach or violation of, constitute a default, require
consent or result in the loss of a material benefit under, give rise to any
increased payment or any penalty or premium under, give rise to a right to
permit or require the purchase or sale of assets or securities under, give rise
to any right of termination, amendment, acceleration or cancellation of, or
result in the creation of a Lien on any of the properties or assets of the
Company or any of its subsidiaries (in each case, with or without notice or
lapse of time or both) pursuant to, any of the terms or conditions of any
Company Contract, except as individually or in the aggregate, does not have and
could not reasonably be expected to have a Material Adverse Effect.  Other than Contracts that have terminated or
expired in accordance with their terms, each Company Contract is valid, binding
and enforceable in accordance with its terms and is in full force and effect.

 

Section 3.13.   Affiliate
Transactions.  Except as set
forth on Schedule 3.13, no  affiliate of the Company or its subsidiaries (A)
owns any material direct or indirect interest of any kind in (other than
passive investments in mutual funds or other institutional investment
vehicles), or controls, or is a director or officer of, or has the right to
participate materially in the profits of (other than passive investments in
mutual funds or other institutional investment vehicles), any person that is or
has since January 1, 2003 been (x) a supplier, customer, landlord, tenant,
creditor or debtor of the Company or any of its subsidiaries or (y) engaged in
a business related to the business of the Company or any of its subsidiaries,
(B) is a participant in any transaction to which the Company or any of its
subsidiaries are a party or is a party to any Contract with the Company or any
of its subsidiaries, or (C) has borrowed any money from or loaned any money to
or other similar obligations to or from the Company or its subsidiaries.

 

Section 3.14.   Fairness
Opinion.  The Company has
received the written opinion of Cowen & Co., LLC (“Cowen”) to the effect that, as of the date of this Agreement, the
consideration to be received in the Merger by the Company’s public stockholders
is fair to such stockholders from a financial point of view (the “Fairness Opinion”).  An executed copy of such opinion has been
delivered to Newco.

 

20

 

Section 3.15.   Brokers
and Transaction Expenses.  (a)  No
broker, finder or investment banker, other than Cowen and Fred Joseph (“Joseph”) is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.  The Company has heretofore
furnished to Newco a complete and correct copy of all Contracts between the
Company, on the one hand, and Cowen or Joseph, on the other hand, pursuant to
which  Cowen or Joseph would be entitled
to any payment relating to the transactions contemplated hereby.  The Company has agreed with Cowen and Joseph
that any amounts paid by the Company to Joseph for advisory services relating
to this Agreement, up to $100,000, shall be deducted from any amounts otherwise
owed by the Company to Cowen.  Cowen has
agreed that the Company’s agreement with Joseph regarding this transactions
does not trigger any additional payments to Cowen by the Company.

 

(b)  Set forth in
Schedule 3.15 is the Company’s reasonable estimate, as of the date hereof,
of the fees and expenses incurred or payable, or to be incurred or payable, by
the Company or any of its subsidiaries in connection with this Agreement and
the consummation of the transactions contemplated hereby (“Transaction Expenses”).  The Company has heretofore furnished to Newco
a complete and correct copy of all engagement letters and other Contracts
between the Company, on the one hand, and any legal, accounting or other
advisors, pursuant to which any such other advisors would be entitled to any
payment relating to the transactions contemplated hereby.

 

Section 3.16.   Vote
Required; Company Board Recommendation. 
(a)  The affirmative vote of the holders of a majority
of the shares of Company Common Stock (including conversion rights held thereto
by holders of Company Preferred Stock) entitled to be cast with respect to the
Merger (“Common Stockholder Approval”) and the affirmative
vote of the holders of a majority of the shares of Company Preferred Stock
entitled to be cast with respect to the Merger (“Preferred Stockholder Approval”) are the only votes of the
holders of any class or series of Company Securities necessary to approve this
Agreement and the transactions contemplated hereby.

 

(b)  The Company Board, by the unanimous vote of
all directors other than Joseph Liemandt, Pekka Pere and Olle Odman, who were
recused, has (i) adopted resolutions approving this Agreement and the
transactions contemplated hereby, including the Merger, (ii) determined
that this Agreement and the transactions contemplated hereby, including the
Merger, are advisable and fair to and in the best interests of the stockholders
of the Company, (iii) resolved to recommend approval of this Agreement and the
transactions contemplated hereby, including the Merger, to the stockholders of
the Company and (iv) directed that approval of this Agreement be submitted to
the Company’s stockholders for both the Common Stockholder Approval and the
Preferred Stockholder Approval (collectively, the “Company Board Recommendation”). 

 

Section 3.17.   Intellectual
Property.  Except as set forth
in Schedule 3.17(i) through (viii), as applicable, (i) the Company and its
subsidiaries own or have the right to use all Intellectual Property used in
their businesses as currently conducted (collectively, the “Company IP”); (ii) except as indicated
on Schedule 3.17(ii), to the best of their knowledge and belief without
independent inquiry such Company IP is valid, unexpired, enforceable and has
not been abandoned; (iii) except as indicated on Schedule 3.17(iii) each
Intellectual Property license to which the Company or any of its subsidiaries
is a party is valid and enforceable, and the Company and its subsidiaries are
not in breach or default thereunder and all such material licenses of third
party Intellectual Property are listed on Schedule 3.17(iii); (iv) except as
indicated on Schedule 3.17(iv), the Company and its subsidiaries have not and
are not infringing or otherwise impairing the Intellectual Property of any
third party, nor have they received

 

21

 

any written (or to the best of their Knowledge, non-written) threats
that they are currently or have been infringing or otherwise impairing the
Intellectual Property of any third party, and to the best of their knowledge
and belief without independent inquiry no third party is infringing or
otherwise impairing their Intellectual Property, and to the best of their
Knowledge without independent inquiry, neither the Company nor its subsidiaries
has asserted a claim that a third party is infringing or otherwise impairing
their Intellectual Property; (v) except as indicated on Schedule 3.17(v), there
is no Order or pending or, to the Knowledge of the Company, threatened Action
relating to any Company IP and the Company and its subsidiaries have not been
notified in writing of any Order or pending, or the Knowledge of the Company,
threatened Action relating to any Company IP and the Company and its
subsidiaries have not been notified in writing of any Order or pending or
threatened Action relating to any Company IP; (vi) except as indicated on
Schedule 3.17(vi) the Company and its subsidiaries have taken reasonable steps
to protect, maintain and safeguard the Company IP, including but not limited to
taking reasonable steps to protect and preserve the confidentiality of all
confidential information that is material to the business of Company and its
subsidiaries as currently conducted (which includes having implemented and
having enforced a policy requiring each employee and consultant of Company and
any of its subsidiaries to execute a proprietary rights and confidentiality
agreement substantially in the form provided to Newco; (vii) except as
indicated on Schedule 3.17(vii), no software covered by or embodying any
Company IP owned or purported to be owned by the Company or any of its
subsidiaries has been distributed in whole or in part or used, or is being used
in conjunction with any Public Software in a manner which would require that
such software be disclosed or distributed in source code form or made available
for free; and (viii) except as indicated on Schedule 3.17(viii), the
consummation of the transactions contemplated by this Agreement will not result
in the loss or impairment of, or payment by Company or its subsidiaries of any
additional amounts with respect to, nor require the consent of any other Person
in respect of, Company’s and its subsidiaries’ right to own, use or hold for
use by Company and its subsidiaries any of the material Company IP as owned,
used or held for use in the conduct of the business of Company and its
subsidiaries as currently conducted.  All
Company IP that is owned or purported to be owned by Company or its
subsidiaries and that is registered with or issued by a governmental entity
(including applications for registration and patent applications) are described
in Schedule 3.17(ix), which also lists the legal and equitable owner thereof.  Except as set forth expressly in
Schedule 3.17(x), no Company IP is subject to any license granted by the
Company or any of its subsidiaries to any Person (other than nonexclusive
licenses of object code versions of the Company’s software products granted in the
ordinary course of business to resellers, distributors and end user
customers).  Schedule 3.17(a)(xi) lists
all third parties to whom copies of source code containing or embodying any
Company IP have been disclosed or have been promised to be disclosed, whether
pursuant to an escrow arrangement or otherwise, and all parties who have the
right potentially to receive such source code. Schedule 3.17(xii) sets
forth a list of the names and job titles for all former U.S. employees of the
Company or any of its subsidiaries that were involved in the creation,
modification or improvement of Intellectual Property for the Company or any of
its subsidiaries but that did not assign in writing all rights, title and
interest in such Intellectual Property to the Company or any of its
subsidiaries.  No person listed on
Schedule 3.17(xii) was involved with the creation, modification or improvement
of any material Company IP in the past three (3) years.  To the extent that any Company IP owned or
purported to be owned by the Company or its subsidiary has been developed or
created independently or jointly by an independent contractor or other third
party for the Company or its subsidiaries, the Company or one of its
subsidiaries has a written agreement with such independent contractor or third
party and has thereby obtained ownership of, and is the exclusive owner of all
such independent contractor’s or third party’s Intellectual Property in such
work, material or invention by operation of law or valid assignment. For
purposes hereof, “Intellectual Property”
means all U.S. and foreign intellectual property and intellectual property
rights, including (A) inventions, discoveries, processes, formulae, designs,
methods, procedures, concepts, developments, technology, and all related improvements
and know-how; (B) copyrights and copyrightable works (and any registrations or
applications for registration thereof), including computer applications,
programs, hardware, software, systems, databases and related items; (C)
trademarks, service marks, trade names, brand names, corporate

 

22

 

names, logos and trade dress (including any registrations or
applications for registration thereof), the goodwill of any business symbolized
thereby, and all common-law rights relating thereto; (D) trade secrets, data
and other confidential information; (E) maskworks and maskwork rights (and any
registrations or applications for registration thereof); and (F) patents,
patent applications, and foreign counterparts, divisionals, continuations,
continuations-in-part, reissues, reexaminations, and continuing prosecution
applications, thereof.  As used in this Section
3.17, “Public Software”
means any software that (i) contains, or is derived in any manner (in whole or
in part) from, any software that is distributed as free software, open source
software (e.g., Linux) or (ii) requires as a condition of its use, modification
or distribution that it be disclosed or distributed in source code form or made
available at no charge. Public Software includes without limitation software
licensed under the GNU’s General Public License (GPL) or Lesser/Library GPL,
the Mozilla Public License, the Netscape Public License, the Sun Community
Source License, the Sun Industry Standards License, the BSD License, and the
Apache License.

 

Section 3.18.   Insurance.  All insurance policies to which any of
the Company and its subsidiaries is either an insured or a beneficiary (the “Insurance Policies”) are with reputable
insurance carriers (other than existing self-insurance), provide coverage for
those risks incident to the business of the Company and its subsidiaries and
their respective properties and assets as is customary for companies conducting
the respective businesses conducted by the Company and its subsidiaries during
such time period, are in character and amount at least equivalent to that
carried by persons engaged in similar businesses and subject to the same or
similar perils or hazards.  (i) All
premiums due and payable in respect of each Insurance Policy have been paid and
none of the Company and its subsidiaries has received notice from any insurer
or agent of any intent to cancel any such Insurance Policy, (ii) the Insurance
Policies are valid and enforceable policies and (iii) none of the Company
and its subsidiaries has received written notice from any insurance company or
Governmental Authority of any defects or inadequacies that would adversely
affect the insurability of, or cause any material increase in the premiums for,
insurance covering any of the Company and its subsidiaries or any of their
respective properties or assets that have not been cured or repaired to the
satisfaction of the party issuing the notice.

 

Section 3.19.   Property.  (a)  Each of the Company and
each of its subsidiaries has good and marketable title to, or valid and
enforceable right to use under existing franchises, easements or licenses, or
valid and enforceable leasehold interests in, all of its properties, rights and
assets except for defects in title, easements, restrictive covenants and
similar encumbrances that, individually or in the aggregate, do not and could
not reasonably be expected to materially affect the use of the properties,
rights or assets subject thereto or otherwise materially impair the business
operations of the Company or its subsidiaries as currently conducted.  All such properties, rights and assets, other
than properties, rights and assets in which the Company or any of its
subsidiaries has a leasehold interest, are free and clear of all Liens, except
for Liens specifically disclosed in Schedule 3.19(a) or Liens that,
individually or in the aggregate, do not and could not reasonably be expected
to materially affect the use of the properties, rights or assets subject thereto
or otherwise materially impair the business operations of the Company or its
subsidiaries as currently conducted. 
There is no condemnation, expropriation, eminent domain or similar
Action affecting any of such properties, rights or assets pending or, to the Knowledge
of the Company, threatened.  All of the
Company and its subsidiaries’ properties, rights and assets are in good
operating condition and repair, subject to continued repair and replacement in
accordance with past practice, and there are no structural defects in any of
such properties, rights and assets, except for any failure to be in such
condition and repair or defects that, individually or in the aggregate, does
not have and could not reasonably be expected to have a Material Adverse
Effect.

 

(b)  None of the
Company or its subsidiaries own any real property.  Schedule 3.19(b) identifies each
Contract pursuant to which the Company or any of its subsidiaries leases real
property to or from any other person as of the date of this Agreement.  All real property leased to the Company or
any of its subsidiaries, including all buildings, structures, fixtures and
other improvements leased to the

 

23

 

Company or any of its subsidiaries, are
referred to as the “Company Real Property.”  The present use and operation of the Company
Real Property is authorized by, and is in compliance in all material respects
with, all applicable zoning, land use, building, fire, health, labor, safety
and other Laws.  Each of the Company and
its subsidiaries has complied with the material terms and conditions of all
leases to which it is a party, and all such leases are in full force and
effect.  The Company and its subsidiaries
enjoy peaceful and undisturbed possession under all such leases, except for
failures to do so that, individually or in the aggregate, do not have and could
not reasonably be expected to have a Material Adverse Effect.

 

Section 3.20.   State
Takeover Statutes.  No “fair
price,” “moratorium,” “control share acquisition,” “business combination” or
other similar antitakeover statute or regulation enacted under state or federal
Laws in the United States (with the exception of Section 203 of the DGCL
(“Section 203”)) applicable
to the Company is applicable to the Merger or the other transactions
contemplated by this Agreement.  The
action of the Company Board (with the recusal of Joseph Liemandt, Pekka Pere
and Olle Odman) in approving this Agreement (and the Merger and the other
transactions contemplated hereby) and the Voting Agreements (and the
transactions contemplated thereby) constitutes prior approval under
subsection (a)(1) of Section 203 and is sufficient to render
inapplicable to this Agreement (and the Merger and the other transactions
contemplated hereby) and the Voting Agreements (and the transactions
contemplated thereby) the restrictions on “business combinations” (as defined
in Section 203) as set forth in Section 203.

 

Section 3.21.   Change
of Control.  Schedule 3.21
sets forth the amount of any compensation or remuneration which is or may
become payable to any Company Employee by the Company or any of its
subsidiaries pursuant to any agreement or plan by reason, in whole or in part,
of the execution and delivery of this Agreement or the consummation of the
Merger and the other transactions contemplated by this Agreement, other than
solely as a stockholder of the Company or as a holder of Options.

 

Section 3.22.   Commercial
Relationships.  Between
January 1, 2005 and the date of this Agreement, none of the Company’s or
any of its subsidiaries’ material suppliers, collaborators, distributors,
licensors or licensees has canceled or otherwise terminated its relationship
with the Company or a subsidiary or has materially altered its relationship
with the Company or a subsidiary.  The
Company has not received any written or, to the Knowledge of the Company, oral
threat or notice from any such entity to terminate, cancel, fail to renew or
otherwise materially modify its relationship with the Company or a subsidiary.

 

Section 3.23.   Illegal
Payments.  In the conduct of
their business, neither the Company nor any of its subsidiaries nor any of
their respective directors, officers, employees or agents, has
(a) directly or indirectly, given, or agreed to give, any gift,
contribution, payment or similar benefit that is or was illegal under
applicable law to any supplier, customer, governmental official or employee or
other person who was, is or may be in a position to help or hinder the Company
or any of its subsidiaries (or assist in connection with any actual or proposed
transaction) or made, or agreed to make, any contribution that is or was
illegal under applicable law, or reimbursed any political gift or contribution
that is or was illegal under applicable law made by any other person, to any
candidate for federal, state, local or foreign public office or
(b) established or maintained any unrecorded fund or asset or made any
false entries on any books or records for any purpose.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO

 

Parent and Newco,
jointly, represent and warrant to the Company as follows:

 

24

 

Section 4.01.   Organization.  Each of Parent and Newco is duly
organized, validly existing and in good standing under the Laws of the State of
Delaware and has the requisite power and authority necessary to own, lease and
operate its properties and assets and to carry on its business as it is now
being conducted.  Newco has furnished to
the Company complete and correct copies of the certificates of incorporation
and the bylaws (or similar organizational documents) of Newco in each case as
currently in effect.  All such
certificates of incorporation and bylaws (and similar organizational documents)
are in full force and effect and no other organizational documents are
applicable to or binding upon Newco. 
Newco is not in violation of any of the provisions of its certificates
of incorporation and bylaws (or similar organizational documents).

 

Section 4.02.   Authority
Relative to this Agreement.  Each
of Parent and Newco has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. 
The execution, delivery and performance of this Agreement by each of
Parent and Newco and the consummation by each of Parent and Newco of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of
each of Parent and Newco are necessary to authorize this Agreement or to
consummate the transactions so contemplated. 
This Agreement has been duly and validly executed and delivered by each
of Parent and Newco and, assuming the due authorization, execution and delivery
hereof by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Newco enforceable against them each in accordance with their
terms, except as may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

 

Section 4.03.   No
Conflict; Required Filings and Consents. 
(a)  The execution, delivery and performance of this
Agreement by each of Parent and Newco and the consummation of the transactions
contemplated hereby do not and will not: 
(i) conflict with or violate the certificate of incorporation or the
bylaws of each of Parent and Newco; (ii) conflict with or violate any Laws
applicable to each of Parent and Newco or by which it or its properties are
bound or affected (assuming that all consents, approvals and authorizations
contemplated by clause (i) of subsection (b) below have been obtained and all
filings described in such clauses have been made); or (iii) result in any
breach or violation of, constitute a default, require consent or result in the
loss of a material benefit under, give rise to a right to permit or require the
purchase or sale of assets or securities under, give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of each of Parent and
Newco (in each case, with or without notice or lapse of time or both) pursuant
to, any Contract to which each of Parent and Newco is a party or by which each
of Parent and Newco or its properties are bound or affected, except, in the
case of clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that, individually or in the aggregate, could not
reasonably be expected to prevent the consummation of the transactions
contemplated hereby.

 

(b)  Assuming the
Approval referred to in clause (i) of Section 3.04(b) is obtained,
the execution, delivery and performance of this Agreement by each of Parent and
Newco and the consummation of the transactions contemplated hereby by each of
Parent and Newco do not and will not require any Approvals from, action by,
filing with or notification to, any Governmental Authority, except for
(i) the filing and recordation of the Certificate of Merger as required by
the DGCL, as applicable, and (ii) such Approvals, actions, filings or
notifications the failure of which to make or obtain, individually or in the
aggregate, does not have and could not reasonably be expected to have a
Material Adverse Effect.

 

Section 4.04.   Brokers.  The Company will not be responsible
for any brokerage, finder’s or other fee or commission to any broker, finder or
investment banker in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of each of Parent and
Newco or its affiliates.

 

25

 

Section 4.05.   Sufficient
Funds.  Parent and Newco have
available, or has made arrangements to obtain (through existing credit
arrangements or otherwise), sufficient funds to provide both for the Merger
Consolidation payable hereunder and all fees and expenses required to be paid
by Parent and Newco related to the Merger (“Sufficient Funds”).          

 

ARTICLE V

CONDUCT OF BUSINESS PENDING THE MERGER

 

Section 5.01.   Covenants
of the Company.  The Company
agrees that, during the period from the date of this Agreement to the earlier
of the Effective Time or the Termination Date, unless otherwise contemplated by
this Agreement or the Voting Agreement, required by applicable Law or Newco
gives its prior written consent, which decision regarding consent shall be made
as soon as reasonably practicable, (1) the businesses of the Company and
its subsidiaries (including their working capital and cash management
practices, the collection of accounts receivable and the payment of accounts
payable (including the writing and mailing of checks with respect thereto))
shall be conducted only in, and the Company and its subsidiaries shall not take
any action except in, the ordinary course of business, in a manner consistent
with past practice and in compliance with applicable Laws and Contracts; (2)
the Company and its subsidiaries shall each pay its respective debts,
liabilities and Taxes when due (subject to good faith disputes over such debts,
liabilities or Taxes) and shall pay or perform their respective other
obligations when due; (3) the Company and its subsidiaries shall each use
its commercially reasonable efforts to preserve substantially intact its
business organization, to keep available the services of its present Company
Employees, to preserve its assets and properties in good repair and condition
and to preserve its present relationships with Governmental Authorities,
customers, suppliers and other persons with which the Company or any of its
subsidiaries has business relations; and (4) the Company and its subsidiaries
shall not license any material Company IP to a Person except non-exclusive
object code software licenses of Company products to distributors, resellers
and end users in the ordinary course of business, in a manner consistent with
past practice.  By way of amplification
and not limitation, the Company agrees that neither the Company nor any of its
subsidiaries shall, during the period from the date of this Agreement to the
Effective Time, directly or indirectly do, or propose, authorize or commit to
do, any of the following, unless otherwise contemplated by this Agreement or
required by applicable Law or without the prior written consent of Newco, which
decision regarding consent shall be made as soon as reasonably practicable:

 

(a)  amend or
otherwise change its certificate of incorporation or bylaws (or similar
organizational documents);

 

(b)  authorize, issue,
deliver, grant, sell, lease, sell and leaseback, pledge, license, transfer,
mortgage, encumber, dispose of or otherwise subject to any Lien (i) any
Company Securities or Subsidiary Securities (except for the issuance and
delivery of shares of Company Common Stock issuable in accordance with the
terms of the Options or other awards, in each case outstanding as of the date
of this Agreement and set forth on Schedule 3.02, which were granted under the
Stock Plans, , to the extent accounted for under any such plan and on terms
determined consistent with past practice), or (ii) any property or assets,
whether tangible or intangible, of the Company or any of its subsidiaries,
other than the sale, lease, license, transfer or disposal of products in the
ordinary course of business and in a manner consistent with past practice;

 

26

 

(c)  declare, set
aside, make or pay any dividend or other distribution, payable in cash, stock
or other equity interests, property or otherwise, with respect to any of its or
its subsidiaries’ capital stock;

 

(d)  reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or
indirectly, any Company Securities or Subsidiary Securities, except for
purchases of outstanding shares of Company Common Stock for a per share price less
than the Merger Consideration pursuant to any existing Company Plan consistent with past
practice, or amend any material term of any outstanding security of the Company
or any of its subsidiaries;

 

(e)  (i)  repurchase, repay or incur any Indebtedness
or authorize, issue, deliver, grant or sell any notes, bonds, debentures or
other securities in respect of Indebtedness or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations or
Indebtedness of any person, other than short term borrowings in the ordinary
course of business and in a manner consistent with past practice under the line
of credit first issued to the Company by Laurus Master Fund, Ltd, in 2003, and
loans obtained by or lines of credit issued to any of the Company’s
subsidiaries;

 

(ii)   except as permitted in Section 5.03(b),
amend in any material respect, terminate, cancel or renew any Company Contract
or enter into any Contract that would be a Company Contract if in effect on the
date of this Agreement;

 

(iii)   enter into any transaction or Contract that
would be required to be set forth in Schedule 3.12 or Schedule 3.13
if in effect on the date of this Agreement;

 

(iv)   acquire (including by merger, consolidation
or acquisition of stock or assets) any assets (other than in the ordinary
course of business in a manner consistent with past practice), business or any
corporation, partnership, limited liability company, association or business
organization or division thereof; or

 

(v)   authorize or make any capital expenditures,
except as reasonably deemed necessary by the Company to replace or repair
property following unanticipated loss or damage to such property in an amount
not to exceed $100,000 in the aggregate for the Company and its subsidiaries;

 

(f)  except to the
extent required under applicable Law, this Agreement or existing Company Plans
as in effect on the date of this Agreement and set forth on Schedule 3.09,
(i) increase or otherwise amend the compensation, bonus, bonus opportunity
or fringe benefits of any Company Employee, (ii) grant any retention,
severance or termination pay not currently required to be paid under existing
Company Plans set forth on Schedule 3.09 to, or enter into, or amend, any
employment, consulting or severance Contract with, any present or former
Company Employee, (iii) amend the terms of any outstanding Options to purchase
any equity of the Company or any subsidiary (including accelerating the vesting
or lapse of repurchase rights or obligations); or (iv) enter into, adopt, amend
or terminate any Company Plan;

 

(g)  fail to maintain
its books and records in accordance with GAAP or, except as may be required as
a result of a change in Law or in GAAP, change material Tax, pension,
regulatory or financial accounting policies, procedures, practices or
principles used by it or revalue or write down the value of any material asset
(including without limitation writing down the value of inventory or writing
off notes or accounts receivable);

 

27

 

(h)  make, change or
rescind any material Tax election or tax or financial accounting method; fail
to duly and timely file all material Tax Returns and other documents required
to be filed with any Governmental Authority, subject to timely extensions
permitted by applicable Law; extend the statute of limitations with respect to
any Tax; file any amended Tax Return; or settle or compromise any material
federal, state, local or foreign Tax liability;

 

(i)  waive, release,
assign, settle or compromise any pending or threatened Action which is
material, which relates to the transactions contemplated hereby or which is
brought by any current, former or purported holder of any securities of the
Company or its subsidiaries in such capacity;

 

(j)  adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
of its subsidiaries (other than the Merger);

 

(k)  pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction when due or otherwise in the ordinary course of
business and consistent with past practice of liabilities reflected or reserved
against in the Company’s current Quarterly Report on Form 10-Q or incurred in
the ordinary course of business after September 30, 2005 and consistent with
past practice;

 

(l)  effectuate a
“plant closing” or “mass layoff,” as those terms are defined in the Worker
Adjustment and Retraining Notification Act of 1988, affecting in whole or in
part any site of employment, facility, operating unit or employee of the
Company or any of its subsidiaries;

 

(m)  other than as set
forth in Schedule 5.01(m), make any loans, advances or capital contributions
(including any “keep well” or other Contract to maintain any financial
statement condition of another person) to, or investments in, any other person,
except for loans, advances and capital contributions to subsidiaries  that are wholly-owned by the Company and are
in existence on the date of this Agreement in the ordinary course of business
and consistent with past practices;

 

(n)  enter into any
Contract with Proha or any of its affiliates;

 

(o)  hire any employee
except for the replacement of any current Company Employee whose employment
with the Company or any of its subsidiaries is terminated for any reason (with
such replacement employee receiving substantially similar or lesser compensation
and benefits as such terminated Company Employee);

 

(p)  enter into a
Contract providing for a maintenance term longer than twelve months;

 

(q)  propose or
consent to any material change to the pricing of any products sold by the
Company or any of its subsidiaries, or offer any material discounts to any
customers of the Company or any of its subsidiaries, except in the ordinary
course of business and consistent with past practice;

 

(r)  enter into
Contracts containing “most favored nation,” price protection or similar
provisions;

 

(s)  fail to maintain
in full force and effect insurance policies covering the Company and its
subsidiaries and their respective properties, assets and businesses in a form
and amount consistent with prudent industry practice;

 

28

 

(t)  except to the
extent required by applicable Law, take any action that could reasonably be
expected to result in (i) any representation and warranty of the Company set
forth in this Agreement (A) that is qualified as to materiality or
Material Adverse Effect becoming untrue or inaccurate in any respect or
(B) that is not so qualified becoming untrue or inaccurate in any material
respect or (ii) any condition to the Merger set forth in Article VII not
being satisfied;

 

(u)  take any action
that could reasonably be expected to, directly or indirectly prevent or
materially impair or delay the consummation of the transactions contemplated
hereby (except to the extent specifically permitted by Section 6.03 and
Article VIII); or

 

(v)  take, offer,
propose to take or enter into or amend any Contract to take, offer or propose
any of the actions described in Sections 5.01(a) through 5.01(u).

 

In addition to the foregoing, as soon as practicable following the date
hereof, the Company shall (i) use its commercially reasonable efforts to obtain
the consents, waivers and approvals set forth on Schedule 5.01(i) and 7.02(e)
hereof, and (ii) take, or cause its subsidiaries to take, the corporate actions
set forth on Schedule 5.01(ii) in a manner reasonably satisfactory to Newco.

 

Section 5.02.   Conduct
of Business by Newco.  Newco
agrees that, during the period from the date of this Agreement to the Effective
Time, unless the Company gives its prior written consent, Newco shall not
(a) incur directly or indirectly any liabilities or obligations other than
those incurred in connection with this Agreement or the transactions
contemplated hereby (including obtaining the Sufficient Funds) or
(b) engage directly or indirectly in any business activity of any kind or
enter into any Contract with any person or become subject to or bound by any
Contract other than, in each case, as contemplated by this Agreement or
relating to the transactions contemplated hereby (including obtaining the
Sufficient Funds).

 

Section 5.03.   Cooperation,
Notification.  (a)  The
Company shall, and shall cause its subsidiaries to, confer on a regular and
frequent basis with one or more Representatives (as defined in Section 6.01(e))
of each of Parent and Newco to discuss, subject to applicable Law, material
operational and business matters.  The
Company shall give prompt notice to Newco of (i) any significant changes,
developments, effects, conditions or occurrences in the business, properties, assets,
condition (financial or otherwise), prospects or results of operations of the
Company and its subsidiaries; (ii) any state of facts, change, development,
event, effect, condition or occurrence that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect;
(iii) any notice or other communication from any person and the response
thereto (provided each of Parent and Newco shall have the opportunity to review
such notice or communication and to review and comment on any response thereto)
of the Company or its subsidiaries or its or their Representatives alleging
that the consent of such person is or may be required in connection with this
Agreement or the transactions contemplated hereby; (iv) any notice or other
communication (A) from any Governmental Authority and the response thereto
(provided each of Parent and Newco shall have the opportunity to review such
notice or communication and to review and comment on any response thereto) of
the Company or its subsidiaries or its or their Representatives in connection
with this Agreement or the transactions contemplated hereby and (B) from or to
the SEC; (v) copies of all filings (provided Parent and Newco shall have the
opportunity to review and comment on any such filings in advance of their being
filed) made by the Company or any of its subsidiaries with any Governmental
Authority in connection with this Agreement and the transactions contemplated
hereby and with the SEC; (vi) any representation or warranty made by it
contained in this Agreement that is qualified as to materiality or Material
Adverse Effect becoming untrue or inaccurate in any respect; (vii) any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect; or (viii) the failure by it to comply with
or satisfy in any material respect any covenant or agreement to be complied
with or satisfied by it under this Agreement; provided, however,
that any notification under this Section 5.03 shall not affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.

 

29

 

(b)  The Company
shall, and shall cause its subsidiaries to, discuss with Parent and Newco any
changes or proposed changes in their charges or standards of service from those
in effect on the date hereof and consult with Parent and Newco prior to making
any filing or any amendment thereto (other than filing or furnishing periodic
reports under the Exchange Act), or effecting any Contract, whether written or
oral, formal or informal, with respect to their standards of service or
accounting.

 

ARTICLE VI

ADDITIONAL AGREEMENTS

 

Section 6.01.   Stockholders’
Meeting; Preparation of the Proxy Statement; SEC Filings.  (a)   Subject to termination
of this Agreement pursuant to Section 8.01(a), (b), (c), (d), (f) or (g), the
Company, acting through the Company Board, shall promptly and duly call, give
notice of, convene and hold as soon as reasonably practicable a meeting of the
holders of Company Common Stock and the Company Preferred Stock for the purpose
of obtaining both the Common Stockholder Approval and the Preferred Stockholder
Approval (the “Stockholders’ Meeting”),
and shall use its reasonable best efforts to solicit and obtain both the  Common Stockholder Approval and the Preferred
Stockholder Approval.  Subject to
termination of this Agreement pursuant to Section 8.01(a), (b), (c), (d), (f)
or (g), the Company shall be required to hold the Stockholders’ Meeting and
comply with its other obligations under this Agreement regardless of whether
the Company Board has effected a Change in Board Recommendation (as defined in
Section 6.03(d)) in accordance with Section 6.03(d).

 

(b)  As promptly as
reasonably practicable following the date of this Agreement, the Company shall
prepare the Proxy Statement, the Company shall file the Proxy Statement with
the SEC and the Company shall respond as promptly as reasonably practicable to
any comments of the SEC with respect thereto and shall cause the Proxy
Statement to be mailed to the Company’s Stockholders as promptly as reasonably
practicable following the date of this Agreement.  The Proxy Statement shall include the Fairness
Opinion and, except to the extent expressly permitted by Section 6.03(d), the
Proxy Statement shall include the Company Board Recommendation.  Each of Parent, Newco and the Company shall
furnish all information concerning itself as may be reasonably requested in
connection with the preparation, filing and distribution of the Proxy
Statement.

 

(c)  The information
supplied by Parent and Newco for inclusion in the Proxy Statement shall not, at
(i) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the Company’s stockholders and (ii) the time of the
Stockholders’ Meeting, 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 date of the Stockholders’ Meeting, any event or circumstance
relating to Parent, Newco, or their officers or directors, is discovered by
Parent and Newco that should be set forth in an amendment or a supplement to
the Proxy Statement, Parent and Newco shall promptly inform the Company (and
the Company shall amend the Proxy Statement accordingly).  All documents that Parent and Newco are
responsible for filing with the SEC in connection with the transactions
contemplated by this Agreement will comply in all material respects with the
requirements of applicable Law, including the Exchange Act.

 

(d)  The information
supplied by the Company for inclusion in the Proxy Statement shall not, at (i)
the time the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed

 

30

 

to the Company’s stockholders and (ii)
the time of the Stockholders’ Meeting, 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 date of the
Stockholders’ Meeting, any event or circumstance relating to the Company or its
subsidiaries, or their respective officers or directors, is discovered by the
Company that should be set forth in an amendment or a supplement to the Proxy
Statement, the Company shall promptly inform Newco (and the Company shall amend
the Proxy Statement accordingly).  All
documents that the Company is responsible for filing with the SEC in connection
with the transactions contemplated by this Agreement will comply in all
material respects with the requirements of applicable Law, including the
Exchange Act.

 

(e)  The Company shall
promptly notify Parent and Newco upon the receipt of any comments from the SEC
or its staff or any request from the SEC or its staff for amendments or
supplements to the Proxy Statement and shall provide Parent and Newco with
copies of all correspondence between the Company and its officers, directors,
employees, accountants, consultants, auditors, counsel, financial advisors and
other agents and representatives (collectively, “Representatives”), on
the one hand, and the SEC and its staff, on the other hand.  Notwithstanding the foregoing, prior to
filing or mailing the Proxy Statement (or any amendment or supplement thereto)
or responding to any comments of the SEC with respect thereto, the Company (i)
shall provide Newco an opportunity to review and comment on such document or
response and (ii) shall include in such document or response all comments
reasonably proposed by Newco.

 

(f)  Each of the
Company Reports to be filed by the Company after the date of this Agreement,
when filed, will comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, each as in effect on
the date so filed.  None of the Company
Reports (including any financial statements or schedules included or
incorporated by reference therein) to be filed by the Company after the date of
this Agreement, when filed, will contain any untrue statement of a material
fact or omit to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

(g)  Each of the
audited and unaudited financial statements (including any related notes)
included in the Company Reports to be filed by the Company after the date of
this Agreement, when filed, will comply in all material respects with all applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, will have been prepared in accordance with GAAP (except,
in the case of unaudited quarterly statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto) and will fairly present the consolidated
financial position of the Company and its subsidiaries at the respective date
thereof and the consolidated results of its and their operations and cash flows
for the periods indicated (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments, which were not and are not
expected to be material in amount).

 

Section 6.02.   Access to Information;
Confidentiality of Information. 
(a)  From the date of this Agreement to the Effective Time,
the Company shall, and shall cause its subsidiaries and its and their
respective Representatives to, afford Parent and Newco and their Representatives
reasonable access at all reasonable times to the officers, employees, agents,
properties, offices, plants and other facilities and to the books, personnel,
Contracts and records of the Company and its subsidiaries, and shall furnish
Parent and Newco and their Representatives with all such information concerning
the business, properties, Contracts, assets, liabilities, personnel and other
aspects of the Company and its subsidiaries as Parent and Newco and their
Representatives may from time to time reasonably request, subject to
requirements of applicable Law.

 

31

 

(b)  Each of the
Company, Parent, and Newco will hold any nonpublic information, including all
information provided pursuant to Section 6.02(a), in confidence to the
extent required by, and in accordance with, the provisions of the letter dated
March 10, 2006 between the Company, Parent and Newco  (the “Non-Disclosure
Agreement”). 
Notwithstanding the foregoing or anything contained in the Non-Disclosure
Agreement to the contrary, (i) Parent and Newco may disclose any such
information to any potential equity or debt financing sources pursuant to
Section 6.09 or to any potential strategic partners of Parent and Newco or any
of their affiliates and may enter into discussions and agreements with any such
equity or debt financing sources or any such strategic partners of Parent and
Newco or their affiliates in connection with effecting the transactions
contemplated by this Agreement (including any modifications proposed by Parent
and Newco pursuant to Section 6.3); provided that such financing sources and
partners agree to keep such information confidential in accordance with the
terms of the Non-Disclosure Agreement and (ii) the Company may disclose information
in accordance with Section 6.03.

 

Section 6.03.   No
Solicitation of Transactions.  (a)  
The Company agrees that neither it nor any of its subsidiaries shall, and that
(without limiting or restricting any of the activities that Proha and Proha’s
Representatives, including Pekka Pere and Olle Odman, are permitted to engage
in under Section 3(h) of the Voting Agreement to which Proha is a party) it
shall cause its Representatives and each of the Representatives of its
subsidiaries not to, directly or indirectly, initiate, solicit, encourage or
otherwise facilitate (including by way of furnishing information) any inquiries
or the making or implementation of any proposal or offer (including any
proposal from or offer to its stockholders) with respect to (i) a merger,
reorganization, share exchange, tender offer, exchange offer, consolidation,
business combination, recapitalization, liquidation, dissolution, joint venture
or similar transaction involving it or any of its subsidiaries or (ii) any
purchase or sale of more than 10% of the assets of the Company and its
subsidiaries, taken as a whole, or any Company Securities (or any notes, bonds
or other debt securities issued or guaranteed by the Company or any of its
subsidiaries) (any such proposal or offer, including any Proha Proposal, being
hereinafter referred to as an “Alternative
Proposal”).  The Company
further agrees that neither it nor any of its subsidiaries shall, and that it
shall cause its Representatives and each of the Representatives of its subsidiaries
not to, directly or indirectly, have any discussion with or provide any
information or data to any person relating to an Alternative Proposal, or
engage in any negotiations concerning an Alternative Proposal, or otherwise
facilitate any effort or attempt to make or implement an Alternative Proposal,
or enter into any agreement, arrangement or understanding with respect to, or
otherwise endorse or accept, any Alternative Proposal.  Notwithstanding the foregoing, with regard to
an Alternative Proposal other than a Proha Proposal, the Company (acting at the
direction of the Company Board) or the Company Board shall be permitted
(directly or indirectly through its Representatives) to, prior to the
Stockholders’ Meeting, engage in 
discussions and negotiations with, and provide any information or data
to, any person (each, a “Third Party”)
in response to an unsolicited bona fide written Alternative Proposal by any
such person, if and only to the extent that, prior to engaging in such
discussions or negotiations or providing such information or data (i) the
Company Board, after consultation with its outside legal counsel, concludes in
good faith that the failure to take such action could be reasonably expected to
constitute a breach by the Company Board of its fiduciary duties to the
stockholders of the Company under applicable law, (ii) the Company Board
concludes in good faith, in consultation with its financial advisors, that such
Alternative Proposal constitutes a Superior Proposal (as defined in this Section 6.03(a))
or could reasonably be expected to result in a Superior Proposal, (iii) the
Company Board receives from such person an executed confidentiality agreement
on terms substantially similar and no less favorable to the Company than those
contained in the Non-Disclosure Agreement and concurrently with the delivery to
such person, the Company delivers all such information or data to Newco, and
(iv) the Company and each of its subsidiaries has complied with its obligations
under this Section 6.03.  Notwithstanding
the foregoing, with regard to a possible or actual Proha Proposal, the Company
(acting at the direction of the Company Board) or the Company Board shall be
permitted (directly or indirectly through its Representatives) to,

 

32

 

prior to March 31, 2006 (the “Proha
Proposal Termination Date”)), provide any information or data to
and answer questions regarding only such information or data from, any Third
Party in response to a request from Proha to provide such information or data
and to answer such questions if Proha has acted in accordance with Section 3(h)
of the Voting Agreement and if and only to the extent that, prior to providing
such information or data or answering such questions, the Company Board
receives from such person an executed confidentiality agreement on terms
substantially similar and no less favorable to the Company than those contained
in the Non-Disclosure Agreement and the Company concurrently with the delivery
to such person, delivers all such information or data to Newco and promptly
provides to Newco a detailed summary of the answers provided regarding such
information or data.  In addition,
notwithstanding the foregoing, with regard to an actual Proha Proposal, the
Company (acting at the direction of the Company Board) or the Company Board
shall be permitted (directly or indirectly through its Representatives) to,
prior to Proha Proposal Termination Date, engage in negotiations with any Third
Party in response to a bona fide written Alternative Proposal made in the
manner permitted by Section 3(h) of the Voting Agreement,  if and only to the extent that, prior to
engaging in such negotiations (i) the Company Board, after consultation with
its outside legal counsel, concludes in good faith that the failure to take
such action could be reasonably expected to constitute a breach by the Company
Board of its fiduciary duties to the stockholders of the Company under
applicable law, (ii) the Company Board concludes in good faith, in consultation
with its financial advisors, that such Alternative Proposal constitutes a
Superior Proposal (as defined in this Section 6.03(a)) or could reasonably
be expected to result in a Superior Proposal, (iii) the Company Board receives
from such person an executed confidentiality agreement on terms substantially
similar and no less favorable to the Company than those contained in the
Non-Disclosure Agreement and concurrently with the delivery to such person, the
Company delivers all such information or data to Newco, and (iv) the Company
and each of its subsidiaries has complied with its obligations under this
Section 6.03.   At least two
business days (or, in the case of an actual Proha Proposal, one business day)
prior to taking any of the actions referred to in the foregoing sentence, the
Company shall notify Newco of any such action it proposes to take with respect
to such Alternative Proposal.  A “Superior Proposal” shall mean an
Alternative Proposal that the Company Board concludes in good faith constitutes
a transaction that is more favorable to the Company’s stockholders (in their
capacities as stockholders), from a financial point of view and taking into
account all legal, financial, regulatory and other aspects of the proposal,
than the transactions contemplated by this Agreement (including any proposed
alterations of the terms of this Agreement submitted by Newco in response
thereto) and which the Company Board concludes in good faith is reasonably
capable of being consummated in a timely manner (taking into account, without
limitation, the ready availability of cash on hand and/or commitments for the
same, in each case as applicable, required to consummate any such proposal, and
any additional filings that may be required under Rule 13e-3 of the Exchange
Act, and any approvals or non-objections required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or the Act Against Restraints
of Competition in Germany or any other applicable competition, merger control,
antitrust or similar law or regulation, including any approvals or filings
required with respect to any Company Plan); provided that , to be a
Superior Proposal, (x) an Alternative Proposal other than a Proha Proposal must
result in a third party or the stockholders of such third party (in each case
other than Proha or a Third Party or any of their respective affiliates),
acquiring, directly or indirectly, more than 90% of the Company Common Stock
and other voting equity securities of the Company (or more than 90% of the
voting equity securities of the surviving or ultimate parent entity in such
transaction) or all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, and  the
holders of Company Common Stock (including Proha) receiving not less than $1.61
per share in cash and the holders of Company Preferred Stock receiving not less
than $2.20 per share in cash, and (y) an Alternative Proposal that is a Proha
Proposal must be made in a manner permitted by Section 3(h) of the Voting Agreement.  A “Proha
Proposal” shall mean an Alternative Proposal made by Proha or by
a Third Party found by Proha, directly or indirectly, that would result in
Proha or such Third Party acquiring, directly or indirectly, more than 90% of
the shares of Company Common Stock that Proha does not own as of the date
hereof for a price per share of not less than $1.61 in cash and more than 90%
of the shares of Company Preferred Stock that Proha does not own as of the date
hereof for a price per share of not less than $2.20 in cash.

 

33

 

(b)  The Company shall
notify Parent and Newco promptly (and in any event by 5:00 p.m. New York City
time, on the next business day) of the receipt of any inquiries, proposals or
offers received by the Company or any of its subsidiaries or any of their
respective Representatives, indicating, in connection with such notice, the
name of such person and the material terms of any inquiries, proposals or
offers.  The Company shall (i) keep Parent
and Newco reasonably informed of the status of any such discussions or
negotiations and of any modifications to such inquiries, proposals or offers,
and (ii) promptly upon receipt or delivery thereof, provide Newco with copies
of all documents and written communications relating to such inquiries,
proposals or offers exchanged between the Company or any of its
Representatives, on the one hand, and the person making an Alternative Proposal
or any of its Representatives, on the other hand (the Company agreeing that it
and its subsidiaries will not enter into any confidentiality agreement with any
person subsequent to the date of this Agreement which prohibits the Company
from providing such information to Parent and Newco).  The Company agrees that neither it nor any of
its subsidiaries shall terminate, waive, amend or modify any provision of any
standstill or confidentiality agreement to which it or any of its subsidiaries
is a party and that it and its subsidiaries shall enforce the provisions of any
such agreement.

 

(c)  Notwithstanding
anything in this Section 6.03, (i) the Company shall not be permitted to
terminate this Agreement (except as otherwise specifically permitted in
Article VIII), (ii) prior to the termination of this Agreement in
accordance with Article VIII, none of the Company nor any of its subsidiaries
shall accept or enter into, or publicly propose to accept or enter into, any
letter of intent, agreement in principle, merger agreement or other Contract
relating to an Alternative Proposal (other than a confidentiality agreement
that complies with the provisions of this Section 6.03) and (iii) except as a
result of a termination of this Agreement pursuant to Section 8.01(f) or (g),
this Section 6.03 shall not affect any other obligation of the Company under
this Agreement, including its obligations to convene and hold the Stockholders’
Meeting in accordance with Section 6.01(a). 
Effective as of the date of this Agreement, the Company and its subsidiaries
shall terminate, and (without limiting or restricting any of the activities
that Proha and Proha’s Representatives, including Pekka Pere and Olle Odman,
are permitted to engage in under Section 3(h) of the Voting Agreement) the
Company shall cause its Representatives and its subsidiaries’ Representatives
to terminate, any existing activities, discussions or negotiations with any
third parties that may be ongoing with respect to any Alternative Proposal,
shall take the necessary steps to inform its and its subsidiaries’
Representatives of the obligations undertaken in this Section 6.03 and shall
request that all confidential information previously furnished to any such
third parties be returned promptly.

 

(d)  The Company Board
shall not approve or recommend an Alternative Proposal, or withdraw or modify
its approval or recommendation of this Agreement and the transactions
contemplated hereby, including the Merger (or publicly propose to do any of the
foregoing), except as explicitly provided in this Section 6.03(d).  Prior to the time of the Stockholders’
Meeting, in response to the receipt of an unsolicited bona fide written
Alternative Proposal (or, in the case of a Proha Proposal, prior to the Proha
Proposal Termination Date, in response to the receipt of a bona fide written
Acquisition Proposal made in a manner permitted by Section 3(h) of the Voting
Agreement), if the Company has complied with this Section 6.03 (and, in the
case of a Proha Proposal, Proha has complied with Section 3(h) of the Voting
Agreement) and the Company Board (i) concludes in good faith that such
Alternative Proposal constitutes a Superior Proposal (and continues to
constitute a Superior Proposal after taking into account any modifications
proposed by Newco during any five business day period referred to below), (ii) after
consultation with outside legal counsel, has concluded in good faith that the
failure to take such action would constitute a breach by the Company Board of
its fiduciary duties to the stockholders of the Company under applicable law,
then, on the fifth business day following Newco’s receipt of written

 

34

 

notice from the Company of the Company
Board’s intention to do so, which notice shall describe the material terms and
conditions of the Superior Proposal and the parties thereto (it being
understood and agreed that any amendment to the price or any other material
term of a Superior Proposal shall require a new notice and a new five business
day period), the Company Board may approve and recommend such Superior Proposal
and, in connection with such Superior Proposal, withdraw or modify, or propose
to withdraw or modify, the Company Board Recommendation (a “Change in Board Recommendation”), and
(iii) the Company Board, contemporaneously with the termination of this
Agreement pursuant to Section 8.1(g), causes the Company to enter into a
binding agreement with respect to such Superior Proposal; provided, in
each case, that during the applicable five business day period, the Company
shall be obligated to negotiate in good faith with Parent and Newco and their
Representatives, affiliates and equity investors (to the extent Newco desires
to negotiate) to make such adjustments in the terms and conditions of this
Agreement so that such Alternative Proposal would no longer be determined in
good faith by the Company Board, in consultation with its financial advisors,
to be a Superior Proposal.

 

(e)  The Company and
the Company Board may take and disclose to the Company’s Stockholders a
position in accordance with Rule 14e-2 under the Exchange Act with respect
to an Alternative Proposal; provided that the foregoing will in no
way (i) permit any action that would otherwise have been prohibited
under this Agreement, (ii) limit the obligation of the Company to comply
with its obligations under this Agreement or (iii) eliminate or modify the
effect that any action taken or disclosure made in accordance with such Rule
would have under this Agreement.

 

Section
6.04.   Employee Benefits Matters.  Except as contemplated herein, for the period ending on the last
day of the calendar year in which the Effective Time occurs, the Surviving
Company shall, and the Parent shall cause the Surviving Company to, provide
employee benefit plans, programs and arrangements which, in the aggregate, will
provide (i) with respect to those Company Employees currently covered by United
States domestic employee benefit plans, programs and arrangements, benefits, as
applicable, which are no less favorable, in the aggregate, than those provided
pursuant to the plans, programs and arrangements of the Parent in effect
immediately prior to the Effective Time and, (ii) with respect to those Company
Employees currently covered by foreign employee benefit plans, programs and
arrangements, benefits, as applicable, which are no less favorable, in the
aggregate, than those provided in the current foreign benefit plans, programs
and arrangements set forth in Schedule 3.09(a); provided, however, that
nothing herein shall (w) impede or limit the Surviving Company or any of its
subsidiaries from terminating any of their employees at any time for any reason
or no reason, subject to the provisions of applicable Law and applicable
Contracts, (x) prevent the amendment or termination of any such plan, program
or arrangement, (y) require that the Surviving Company (1) provide or
permit investment in the securities of the Company, (2) grant or award any
securities or securities-based compensation or benefit or (3) provide any
guaranteed bonus compensation, change of control protections or retention
awards, or (z) interfere with the Surviving Company’s right or obligation to
make such changes as are necessary to conform with applicable Laws.

 

Section 6.05.   Directors’
and Officers’ Indemnification and Insurance.  (a)  The certificate of
incorporation and bylaws of the Surviving Corporation shall contain the
provisions regarding liability of directors and indemnification of directors
and officers that are set forth, as of the date of this Agreement, in the
certificate of incorporation and the bylaws, respectively, of the Company and
shall provide indemnification with respect to claims arising from facts or
events that occurred prior to the Effective Time to the fullest extent
permitted by and in accordance with the DGCL from time to time, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at or at any time prior to the Effective Time
were Company Employees.

 

35

 

(b)  The Surviving
Corporation shall cause to be obtained at the Effective Time “tail” insurance
policies with a claims period of at least four years from the Effective Time with
respect to directors’ and officers’ liability insurance in amount and scope at
least as favorable as the Company’s existing policies for claims arising from
facts or events that occurred prior to the Effective Time; provided that
if such “tail” insurance policies are not available at an aggregate cost not
greater than $450,000 (the “Insurance Cap”), the Surviving Corporation shall
cause to be obtained as much comparable insurance for as long a period (not to
exceed four years from the Effective Time) as is available for an aggregate
cost not to exceed the Insurance Cap.

 

(c)  In furtherance of
and not in limitation of the preceding paragraph, Newco agrees that the
officers and directors of the Company that are defendants in all Actions
commenced by stockholders of the Company with respect to (x) the
performance of their duties as such officers and/or directors under federal or
state Law (including Actions under federal and state securities Laws) and
(y) the transactions contemplated by this Agreement, including any and all
such Actions commenced on or after the date of this Agreement (the “Subject Litigation”)
shall be entitled as a group to be represented, at the reasonable expense of
the Company or the Surviving Corporation, in the Subject Litigation by one
counsel (and Delaware counsel if appropriate and one local counsel in each
jurisdiction in which a case is pending) each of which such counsel shall be
selected by a plurality of such officer/director defendants (and reasonably
acceptable to the Surviving Corporation and, prior to the Effective Time,
Newco); provided that the Company shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld) and that a condition to the indemnification payments
provided in this Section 6.05 shall be that such officer/director defendant not
have settled any Subject Litigation without the consent of the Surviving
Corporation (such consent not to be unreasonably withheld) and, prior to the
Closing, Newco; and provided further that neither Newco, the Company nor the
Surviving Corporation shall have any obligation hereunder to any
officer/director defendant when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
non-appealable, that indemnification of such officer/director defendant in the
manner contemplated hereby is prohibited by applicable Law.

 

(d)  Prior to the
Effective Time, the Company shall give Newco the opportunity to participate in
the defense or settlement of any securityholder litigation against the Company
and/or its directors relating to this Agreement, the Merger and the other
transactions contemplated hereby, and no settlement or any such litigation
shall be agreed to without Newco’s prior consent (which consent shall not be
unreasonably withheld or delayed).

 

Section 6.06.   Regulatory
Approvals and Other Matters. 
(a)  (a)  Each party
shall cooperate and use commercially reasonable efforts to prepare promptly and
file all necessary documentation, to effect all necessary applications,
notices, petitions, filings and other documents, and to use commercially
reasonable efforts to obtain all necessary Approvals from any Governmental
Authority and all other persons necessary or advisable to consummate the
transactions contemplated hereby, including the Required Approvals; provided,
however, that (i) no party shall be obligated or permitted to
consent to any action or to make or offer to make any commitment or undertaking
or incur any liability or obligation, other than those commitments and
undertakings set forth in this Section 6.06, without the consent of the
other party, which consent shall not be unreasonably withheld (it being
understood that, without limiting the condition set forth in
Section 7.02(d), consent may be withheld in a party’s sole discretion with
respect to any matter that could increase in any material respect the financial
obligations of the Company or its subsidiaries) and (ii) no party shall be
obligated or permitted to consent to any action or to make or offer to make any
commitment or undertaking or incur any liability or obligation that would be
inconsistent with any of the conditions or standards set forth in Section
7.02(d).  Newco and the Company agree
that they will consult with each other with respect to the obtaining of all
such necessary or advisable Approvals. 
Each of Newco and the Company shall have the right to review and approve
in advance drafts

 

36

 

of all such necessary applications, notices, petitions, filings and
other documents made or prepared in connection with the transactions
contemplated by this Agreement, which approval shall not be unreasonably
withheld or delayed.  Each party shall promptly
notify the other party of any failure or prospective failure to obtain any such
Approvals and shall provide copies of all Company Required Consents obtained by
it.

 

(b)  Notwithstanding
anything in this Agreement to the contrary, in connection with obtaining any
Approval from any Governmental Authority or any other person, none of Newco or
any of its affiliates shall be required to pay or commit to pay any cash or
other consideration, to make any commitment or to incur any liability or other
obligation.  No party to this Agreement
shall consent to any voluntary extension of any statutory deadline or waiting
period or to any voluntary delay of the consummation of the transactions
contemplated hereby at the behest of any Governmental Authority without the
consent and agreement of the other party to this Agreement, which consent shall
not be unreasonably withheld or delayed.

 

Section 6.07.   Public
Announcements.  The initial
press release concerning the Merger shall be a joint press release and, thereafter,
neither the Company nor Newco shall issue or cause the publication of any press
release or other public announcement (to the extent not previously issued or
made in accordance with this Agreement) with respect to this Agreement or any
transaction contemplated hereby, except to the extent required by applicable
Law , in which case the issuing party shall use its reasonable best efforts to
consult with the other party before issuing any such release or making any such
public statement.

 

Section 6.08  Resignations.The
Company shall obtain and deliver to Newco at the Closing evidence satisfactory
to Newco of the resignation, effective at the Effective Time, of those
directors and officers of the Company and its subsidiaries designated by Newco
prior to the Closing, and releases of the Company and its subsidiaries by such
directors and officers of any and all claims arising on or prior to the
Effective Time or relating to any matter occurring on or prior to the Effective
Time in a form which shall be reasonably acceptable to Newco.

 

Section 6.09  Financing.  The Company agrees to provide, and
shall cause its subsidiaries and its and their Representatives to provide, on a
timely basis, all reasonable cooperation in connection with the arrangement of
any equity or debt financing as may be requested by Parent and Newco (provided,
that such requested cooperation does not unreasonably interfere with the
ongoing operations of the Company and its subsidiaries), including (i)
participation in meetings and due diligence sessions, (ii) furnishing Parent
and Newco and their equity or debt financing sources and their Representatives
with financial and other pertinent information regarding the Company as may be
reasonably requested by Parent and Newco, including financial statements and
financial data, and (iii) providing and executing documents as may be
reasonably requested by Parent and Newco; provided, that none of the
Company or any subsidiary shall be required to pay any commitment or other
similar fee or incur any other liability in connection with any such financing
prior to the Effective Time.  All
non-public or otherwise confidential information regarding the Company obtained
by Parent and Newco or their Representatives pursuant to this Section 6.09
shall be kept confidential in accordance with the Non-Disclosure Agreement; provided,
that Parent and Newco and their Representatives shall be permitted to disclose
information as necessary and consistent with customary practices in connection
with any such equity or debt financing.

 

37

 

ARTICLE VII

CONDITIONS

 

Section 7.01.   Conditions
to Each Party’s Obligation to Effect the Merger.  The respective obligations of each
party hereto to effect the Merger shall be subject to the satisfaction or, if
permitted by applicable Law, waiver on or prior to the Closing Date of each of
the following conditions:

 

(a)  Common
Stockholder and Preferred Stockholder 
Approvals.  Both the Common
Stockholder Approval and the Preferred Stockholder Approval shall have been
obtained in accordance with applicable Law and the certificate of incorporation
and bylaws of the Company.

 

(b)  No Order.  No Law or Order enacted, promulgated, issued,
entered, amended or enforced by any Governmental Authority, whether temporary,
preliminary or permanent (collectively, “Restraints”)
shall be in effect enjoining, restraining, preventing or prohibiting
consummation of the Merger or any of the other transactions contemplated hereby
or making the consummation of the Merger or any of the other transactions
contemplated hereby illegal or otherwise imposing material limitations on the
ability of Newco effectively to acquire or hold the business of the Company and
its subsidiaries.

 

Section 7.02.   Conditions
to Obligation of Parent and Newco to Effect the Merger.  The obligation of Parent and Newco to
effect the Merger shall be further subject to the satisfaction or, if permitted
by applicable Law, waiver by Parent and Newco, on or prior to the Closing Date,
of each of the following conditions:

 

(a)  Representations
and Warranties.  Each of the
representations and warranties of the Company (i) set forth in this Agreement
that are qualified or excepted by materiality or Material Adverse Effect or
similar standard or qualification shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that if such representations and warranties speak as of an
earlier date they shall be true and correct as of such date); provided, however,
that for purposes of this clause, such representations and warranties shall be
deemed to be true and correct unless the failure or failures of all such
representations and warranties to be so true and correct, without giving effect
to any qualification or exception as to materiality or Material Adverse Effect
or any similar standard or qualification set forth in such representations or
warranties, could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect and (ii) set forth in this Agreement that are
not qualified or excepted by materiality or Material Adverse Effect or any
similar standard or qualification shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date (except that if such representations and
warranties speak as of an earlier date they shall be true and correct in all
material respects as of such date). 
Newco and Parent shall have received a certificate signed on behalf of
the Company by the Chief Executive Officer and the Chief Financial Officer of
the Company to the foregoing effect.

 

(b)  Performance of
Obligations of the Company.  The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date.  Parent and Newco shall have
received a certificate signed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the Company to the foregoing effect.

 

(c)  No Material
Adverse Effect.  There shall not
exist any state of facts, change, development, event, effect, condition or
occurrence that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. 
Parent and Newco shall have received a certificate signed on behalf of
the Company by the Chief Executive Officer and the Chief Financial Officer of
the Company to the foregoing effect.

 

(d)  No
Governmental Litigation.  There shall
not be any legal, administrative, arbitral or other proceeding pending before
any Governmental Authority in which a Governmental Authority is a party that
would or would reasonably be expected to: (i) restrain, enjoin, prevent,
prohibit or make illegal

 

38

 

the consummation of the Merger or any
of the other transactions contemplated hereby; or (ii) impose material
limitations on the ability of Newco effectively to acquire or hold the business
of the Company and its subsidiaries.

 

(e)  Consents.  The Company shall have obtained all consents,
waivers and approvals required in connection with the consummation of the
transactions contemplated hereby in connection with the Contracts set forth on
Schedule 7.02(e) in form and substance reasonably satisfactory to Parent and
Newco.

 

(f)  Other
Agreements. The Voting Agreement, each Stockholder Letter Agreement, the
Proha Agreement and the Laurus Agreement shall be in full force and effect with
respect to each party thereto.

 

(g)  FIRPTA
Compliance.  Newco shall have
received from the Company a properly executed notice in a form reasonably
acceptable to Newco for purposes of satisfying Newco’s obligations under
Section 897 and 1445 of the Code, together with written authorization for Newco
to deliver such notice to the IRS on behalf of the Company after the Closing.

 

(h)  Net
Indebtedness; Cash; Recent Quarter. 
Newco shall have received the following, in form and substance
reasonably satisfactory to Newco:

 

(i)   Net Indebtedness; Cash.  A certificate signed on behalf of the Company
by the Chief Financial Officer of the Company setting forth the amount of
Indebtedness of the Company and the subsidiaries as of the Closing Date and the
amount necessary to pay off the Indebtedness owed, directly or indirectly, to
Laurus Master Fund, Ltd. or an affiliate thereof in full as of the Closing
Date, including any accrued and unpaid interest, penalties or premiums thereon
(collectively, the “Payoff Amount”),
and the amount of cash and cash equivalents of the Company and the subsidiaries
as of the Closing Date (after giving effect to the payment of all Transaction
Expenses) calculated in accordance with the accounting principles and
methodologies (including GAAP) employed by the Company in preparing the Balance
Sheet consistently applied (“Closing Cash”),
which Payoff Amount shall not be greater than Three Million Eight Hundred
Sixty-five Thousand Dollars ($3,865,000) and which  Closing Cash shall not be less than One
Million Five Hundred Thousand Dollars ($1,500,000) without giving effect to any
contractual severance payments that are required to be made in order for the
Company to comply with Section 6.08, and customary forms of pay-off letters
from the holders of the Indebtedness set forth on Schedule 3.02(d) which
provide for mortgage and lien releases, canceled notes, trademark and patent
assignments and other similar matters in connection with the payment of such
Indebtedness; and

 

(ii) Recent Quarter.  A certificate signed on behalf of the Company
by the Chief Financial Officer of the Company setting forth the Company’s total
revenue, software license revenue and operating margin for the quarter ending
December 31, 2005 (calculated in accordance with the accounting policies described
in the Company’s Form 10-Q for the quarter ended September 30, 2005), which
total revenue, software license revenue and operating margin shall not be less
than the amounts set forth on Schedule 7.2(h)(ii) (subject in each case to
normal year-end audit adjustments, none of which shall be material).

 

(i)  Tax Filings.  The Company shall have made the following Tax
filings in form and substance reasonably satisfactory to Newco:  (i) federal Form 5471, Information Return of
U.S. Persons with Respect to Certain Corporations, for all of the Company’s
foreign subsidiaries for the 2002 Tax year with the Internal Revenue Service
and the California Franchise Tax Board, and (ii) Form RF-3 G.B., Annual Claim
for Exemption From French Tax on Royalties, with the appropriate Tax
authorities for all open Tax years.

 

39

 

(j)  Proha
Arrangements.  The Company and Proha
shall have entered into mutually agreeable arrangements as contemplated by the
Proha Agreement, including an office lease agreement and administrative
services agreement.

 

(k)  Proprietary
Information and Inventions Assignment Agreement.  The Company shall have provided evidence
satisfactory to Parent and Newco that as of the Closing each individual who as
of the date hereof is or after the date hereof becomes a U.S. employee of the
Company or any of its subsidiaries and who was, is or is reasonably likely to
be involved in the creation, modification or improvement of Intellectual
Property for the Company or any of its subsidiaries, has entered into and
executed an Employee Proprietary Information Agreement in the form attached to
Schedule 7.2(k).

 

(l)  Releases.  The Company shall provide executed releases
in form reasonably acceptable to Newco pursuant to Section 6.08 from the
resigning directors and officers.

 

Section 7.03.   Conditions
to Obligation of the Company to Effect the Merger.  The obligation of the Company to
effect the Merger shall be further subject to the satisfaction or, if permitted
by applicable Law, waiver by the Company, on or prior to the Closing Date, of
each of the following conditions:

 

(a)  Representations
and Warranties.  Each of the
representations and warranties of Parent and Newco (i) set forth in this
Agreement that are qualified or excepted by materiality or Material Adverse
Effect or any similar standard or qualification shall be true and correct as of
the date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except that if such representations and warranties speak
as of an earlier date they shall be true and correct as of such date); provided,
however, that for purposes of this clause, such representations and
warranties shall be deemed to be true and correct unless the failure or
failures of all such representations and warranties to be so true and correct,
without giving effect to any qualification or exception as to materiality or
material adverse effect or any similar standard or qualification set forth in
such representations or warranties, would, in the aggregate, have a material
adverse effect on the ability of Parent or Newco to perform its obligations
hereunder and (ii) set forth in this Agreement that are not qualified or
excepted by materiality or material adverse effect or any similar standard or
qualification shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that if such representations and warranties speak as of an
earlier date they shall be true and correct in all material respects as of such
date).  The Company shall have received a
certificate signed on behalf of Parent and Newco by its Chief Executive Officer
or the Chief Financial Officer of Parent and Newco to the foregoing effect.

 

(b)  Performance of
Obligations of Parent and Newco. 
Each of Parent and Newco shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date.  The Company shall
have received a certificate signed on behalf of Parent and Newco by its Chief
Executive Officer or the Chief Financial Officer to the foregoing effect.

 

40

 

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

 

Section 8.01.   Termination.  This Agreement may be terminated and
the Merger and the other transactions contemplated hereby may be abandoned at
any time prior to the Effective Time, notwithstanding any shareholder approval
of this Agreement, as follows (the date of any such termination, the “Termination Date”):

 

(a)  by mutual written
consent duly authorized by the Company Board and by Parent and Newco;

 

(b)  by the Company,
on the one hand, or Newco, on the other hand, if the Closing shall not have
been consummated on or before the date upon which is one hundred eighty (180)
days subsequent to the effective date of this Agreement; provided, that
the right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to perform its obligations under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
have been consummated on or before such date;

 

(c)  by the Company,
on the one hand, or Newco, on the other hand, if there shall have been a breach
of any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of any of Newco, in the case
of a termination by the Company, or the Company, in the case of a termination
by Newco, which breach, individually or together with all other such breaches,
would constitute, if occurring or continuing on the Closing Date, the failure
of any of the conditions set forth in Section 7.02 or Section 7.03, as the case
may be, and which (x) is not cured within 30 calendar days following written
notice to the party committing such breach or (y) by its nature or timing
cannot be cured through the exercise of reasonable efforts prior to the
expiration of such 30 calendar day period;

 

(d)  by the Company,
on the one hand, or Newco, on the other hand, if any Restraint having any of
the effects set forth in Section 7.01(c) shall be in effect and shall have
become final and nonappealable; provided, that the right to terminate this
Agreement under this Section 8.01(d) shall not be available to any party whose
failure to perform its obligations under this Agreement has been the cause of,
or resulted in, the imposition of such Restraint;

 

(e)  by the Company
(unless the Company is in breach of its obligations under Section 6.01 or
Section 6.03), on the one hand, or Newco, on the other hand, if either the
Common Stockholder Approval or the Preferred Stockholder Approval shall not
have been obtained by reason of the failure to obtain either of the respective approvals
upon the taking of a vote  at the
Stockholders’ Meeting or any adjournment or postponement thereof;

 

(f)  by Newco,
following the occurrence of a Triggering Event; or

 

(g)  by the Company,
prior to the Stockholders’ Meeting (or, in the case of a Proha Proposal, prior
to the Proha Proposal Termination Date), in response to a Superior Proposal
that was unsolicited or resulted from a Proha Proposal and that did not
otherwise result from a breach of Section 6.03, if (i) the Company Board shall
have effected a Change in Board Recommendation, (ii) the Company Board has
resolved to approve and recommend such Superior Proposal, (iii) the Company has
complied with its obligations under Sections 6.01 and 6.03, and (iv)
concurrently with such termination, the Company enters into a binding agreement
with respect to such Superior Proposal. 
Notwithstanding the foregoing, the Company shall not terminate this
Agreement pursuant to this Section 8.01(g), and any purported termination
pursuant to this Section 8.01(g) shall be void and of no force or effect,
unless the Company shall have complied with all of the provisions of Section
6.03, including the notification provisions in Section 6.03, in connection with
such Superior Proposal, and with all applicable requirements of Section 8.02(a)
(including the payment of the Termination Fee prior to or concurrent with such
termination).

 

41

 

For purposes of
this Agreement, a “Triggering Event”
shall be deemed to have occurred if: (i) the Company Board shall for any reason
have effected a Change in Board Recommendation; (ii) the Company shall have
failed to include in the Proxy Statement the Company Board Recommendation;
(iii) the Company shall have breached any of its obligations under Section 6.01
or under Section 6.03 or any party (other than Newco) to any Voting Agreement
shall have breached any of its obligations thereunder or terminated any Voting
Agreement with respect to itself; (iv) the Company Board shall fail to reaffirm
the Company Board Recommendation within ten business days after Newco requests
in writing that such Company Board Recommendation be reaffirmed at any time
following an Alternative Proposal; (v) the Company Board shall have approved or
recommended any Alternative Proposal or resolved to do so; (vi) the Company
shall have entered into any letter of intent, agreement in principle,
memorandum of understanding, merger, acquisition, purchase or joint venture
agreement or other agreement, contract or commitment accepting any Alternative
Proposal; or (vii) a tender or exchange offer relating to securities of the
Company shall have been commenced by a person unaffiliated with Newco and the
Company shall not have sent to its securityholders pursuant to Rule 14e-2 promulgated under
the Exchange Act, within ten business days after such tender or exchange offer
is first published sent or given, a statement disclosing that Company
recommends rejection of such tender or exchange offer.

 

Section 8.02.   Certain Fees and
Expenses.  (a)  If this
Agreement shall be terminated:

 

(i)   by Parent and Newco pursuant to Section
8.01(f), the Company shall pay to Newco or its designee an aggregate amount
equal to the Termination Fee (as defined in Section 8.02(b)) within two
business days after such termination;

 

(ii)   by the Company pursuant to Section 8.01(g),
the Company shall pay to Newco or its designee an aggregate amount equal to the
Termination Fee prior to or concurrent with such termination;

 

(iii)   by Parent and Newco or the Company pursuant
to Section 8.01(e) or by Newco pursuant to Section 8.01(c), the Company shall
pay to Newco or its designee all documented costs and expenses incurred by
Newco and the majority indirect stockholder of Newco in connection with this
Agreement and the transactions contemplated hereby, not to exceed Five Hundred
Thousand Dollars ($500,000), within two business days after such termination;
and

 

(iv)   by Parent and Newco or the Company pursuant
to Section 8.01(other than termination pursuant to Section 8.01(a), Section
8.01(b), Section 8.01(c) or Section 8.01(d)) and (1) at or prior to
the Termination Date, an Alternative Proposal shall have been publicly
announced, commenced or otherwise communicated or made known to the Company (or
any person shall have publicly announced, commenced or otherwise communicated
or made known an intention, whether or not conditional, to make an Alternative
Proposal) and (2) within twelve months of the Termination Date, the
Company or any of its affiliates either becomes a party to any definitive
agreement, letter of intent or agreement in principle in respect of an
Alternative Proposal or consummates a transaction that would constitute an
Alternative Proposal (which need not be the same Alternative Proposal as the Alternative
Proposal described in clause (1)), then the Company will pay Newco an
aggregate amount equal to the Termination Fee, minus any costs and expenses
previously paid to Newco or its designee pursuant to Section 8.02(a)(iii),
prior to or concurrent with the closing of such Alternative Proposal.

 

42

 

(b)  In no event shall
the Company be required to pay under this Section 8.02 an aggregate amount
in excess of the Termination Fee.  As
used in this Agreement, “Termination Fee” means an amount equal to Seven Hundred
Fifty Thousand Dollars ($750,000).  The
Company and Newco acknowledge that the fee and expense and the other provisions
of this Section 8.02 are an integral part of the transactions contemplated by
this Agreement and that, without these agreements, Parent, Newco and the
Company would not enter into this Agreement. 
All amounts due Parent and Newco under Section 8.02(a) shall be payable
by wire transfer in immediately available funds to Newco or to such other
person as Newco may designate in writing to the Company.  If the Company fails to make any payment
required under this Section 8.02 in a timely manner and, in order to obtain
such payment, Parent and Newco commence a suit to collect such payment that
results in a judgment against the Company, the Company shall indemnify Parent
and Newco or their designee, as the case may be, for their fees and expenses
(including attorneys fees and expenses) incurred in connection with such suit
and shall pay interest on the amount of the payment at the prime rate of Bank
of America, N.A. (or its successors or assigns) in effect on the date the
payment was payable pursuant to this Section 8.02.

 

Section 8.03.   Effect
of Termination.  In the event
of termination of this Agreement by either the Company or Parent and Newco as
provided in Section 8.01, written notice thereof shall be given to the other
party, specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Newco or the Company, other
than the provisions of Section 6.02(b), Section 8.02, this Section 8.03
and Article IX, all of which shall survive termination of this Agreement.  Nothing contained in this Section 8.03
shall relieve any party from liability for its breach of the representations,
warranties, covenants or agreements set forth in this Agreement; provided
that following termination of this Agreement by Newco or the Company as
provided in Section 8.01, in the absence of a willful breach no party
shall be liable for damages in excess of Three Million Seven Hundred Thousand
Dollars ($3,700,000) (including any amounts paid pursuant to
Section 8.02).

 

Section 8.04.   Amendment.  This Agreement may be amended by
mutual agreement of the parties at any time prior to the Effective Time; provided,
however, that, after the approval of this Agreement by the stockholders
of the Company, no amendment may be made that would reduce the amount or change
the type of consideration into which each share of Company Common Stock shall
be converted upon consummation of the Merger. 
This Agreement may not be amended except by an instrument in writing signed
by the parties.

 

Section 8.05.   Waiver.  At any time prior to the Effective
Time, any party may (a) extend the time for the performance of any obligation
or other act of any other party, (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.  Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby. 
The failure or delay of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right hereunder.

 

ARTICLE IX

GENERAL PROVISIONS

 

Section 9.01.   Non-Survival.  None of the representations,
warranties, covenants and other agreements in this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein that
by their terms apply or are to be performed in whole or in part after the
Effective Time.

 

43

 

Section 9.02.   Fees
and Expenses.  Except as
provided otherwise in Section 8.02, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses.

 

Section 9.03.   Certain
Definitions.  For purposes of
this Agreement, the term:

 

(a)  ”affiliate” shall mean, unless otherwise
indicated, any person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with the
person specified, and the term “controls” (including the terms “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such person specified, whether through ownership of voting securities, by
Contract or otherwise; provided, however, that for purposes of Article III and V, an
“affiliate” of the Company shall include each of (i) Proha and each direct and
indirect subsidiary of Proha and (ii) each officer and director of Proha and each
direct and indirect subsidiary of Proha;

 

(b)  ”business day” shall mean any day that the
New York Stock Exchange is normally open for trading and that is not a
Saturday, Sunday or other day on which banks in the City of New York are
authorized or required by Law to close for regular banking business;

 

(c)  ”control“ (including the terms “controlling,” “controlled by” and
“under common control with”) shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities or other ownership
interests, by Contract or otherwise;

 

(d)   “Knowledge” or “Knowledge of Parent” or “Knowledge
of Newco” or “Knowledge of the
Company” means, with respect to any matter in question, that the
executive officers of Newco, on the one hand, or the executive officers of the
Company, on the other hand, have actual knowledge after reasonable inquiry;

 

(e)  ”person” means any individual, corporation,
company, partnership (limited or general), limited liability company, joint
venture, association, trust, unincorporated organization or other business
entity or “group” (as defined in the Exchange Act); and

 

(f)  ”subsidiary” or “subsidiaries” or “Subsidiary”
or “Subsidiaries” mean, with
respect to a party, any person (other than an individual) of which at least
fifty percent of the voting securities or other equity interests having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such person is directly
or indirectly owned or controlled by such party or by any one or more of its
subsidiaries.

 

Section 9.04.   Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, (b) on the first business day following the
date of dispatch if delivered by a nationally recognized next-day courier
service, (c) on the fifth business day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid or (d) if sent by facsimile transmission, when transmitted and receipt
is confirmed.  Each party shall act in
good faith in confirming receipt of any such facsimile transmissions.  All notices hereunder shall be delivered as
set forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:

 

44

 

(a)  If to the
Company, to:

 

Artemis
International Solutions Corporation

4041
MacArthur Boulevard

Suite
2600

Newport
Beach, CA 92660

Attention:
     Charles Savoni

Telecopy:      (949) 833-7277

 

with a copy to:

 

Kirkpatrick & Lockhart
Nicholson Graham LLP

599 Lexington Avenue

New York, New York  10022

Attention:              Robert S. Matlin

Telecopy:              (212) 536-3901

 

(b)  If to Parent, to:

 

Trilogy,
Inc.

6011
West Courtyard Dr.

Suite
300

Austin,
TX 78730

Attention:
     Lance A. Jones

Telecopy:      (512) 874-3502

 

with
a copy to:

 

Haynes and Boone, LLP

901 Main St., Suite 3100

Dallas, TX 75202

Attention:              Dennis R. Cassell

Telecopy:              (214) 200-0788

 

(c)  If to Newco, to:

 

RCN
Acquisition, Inc.

6011
West Courtyard Dr.

Suite
300

Austin,
TX 78730

Attention:
     Lance A. Jones

Telecopy:      (512) 874-3502

 

with
a copy to:

 

Haynes and Boone, LLP

901 Main St., Suite 3100

Dallas, TX 75202

Attention:              Dennis R. Cassell

Telecopy:              (214) 200-0788

 

45

 

Section 9.05.   Interpretation.  When a reference is made in this
Agreement to Sections, Schedules or Exhibits, such reference shall be to a
Section, Schedule or Exhibit of this Agreement, respectively, unless otherwise
indicated.  The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”.  The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
The term “or” is not exclusive. 
The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms.  References to a person are also to its
permitted successors and assigns. 
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.

 

Section 9.06.   Severability.  Any term or provision of this
Agreement which is invalid, illegal or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without rendering invalid, illegal or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity, legality or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. 
If any provision of this Agreement is so broad as to be unenforceable,
the provision shall be interpreted to be only so broad as is enforceable.

 

Section 9.07.   Entire
Agreement.  This Agreement
(including the attachments hereto and the documents and the instruments
referred to herein) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof other than the Non-Disclosure Agreement.

 

Section 9.08.   No Implied
Representations or Warranties.  Except
for the representations and warranties contained in this Agreement, neither the
Company nor Newco makes any representations or warranties, written or oral,
statutory, express or implied, concerning itself or any of its affiliates, or
its or its affiliates’ respective businesses, assets or liabilities.

 

Section 9.09.   Assignment;
Binding Effect; Benefit.  Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties (whether by operation of Law or otherwise)
without the prior written consent of the other party; provided, that
Newco may, without the prior written consent of the Company, assign (a) its
rights, interests and obligations to any of its affiliates without the consent
of the Company, or (b) for collateral security purposes, its rights and
interests to any lender providing financing to Newco or any of its affiliates; provided,
further, that no such assignment shall relieve the assigning party of its
obligations hereunder if the assignee does not perform its obligations
hereunder.  Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective successors and assigns.  Any purported assignment or delegation not
permitted under this Section shall be null and void.  Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended or shall be interpreted to confer on any person other than the parties
or their respective permitted successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement (except as
provided in Section 6.05).

 

Section 9.10.   Schedules
and Exhibits.  All Schedules
and Exhibits attached hereto and referred to herein are hereby incorporated
herein and made a part of this Agreement for all purposes as if fully set forth
herein.

 

Section 9.11.   Counterparts;
Effect; Facsimile Signatures.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.  The exchange of copies of this Agreement and
of signature pages by facsimile or electronic transmission shall constitute
effective

 

46

 

execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted by
facsimile or electronic transmission shall be deemed to be their original
signatures for all purposes.

 

Section 9.12.   Governing
Law.  This Agreement shall be
governed and construed in accordance with the Laws of the State of Delaware,
without regard to any applicable conflicts of law provisions thereof that may
require the application of the Laws of another jurisdiction.  The parties hereby irrevocably submit to the
exclusive jurisdiction of the courts of the State of Delaware and the federal
courts of the United States of America located in the State of Delaware in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby, and hereby waive, and agree not to
assert, as a defense in any Action for the interpretation or enforcement hereof
or of any such document, that it is not subject thereto or that such Action may
not be brought or is not maintainable in said courts or that the venue thereof
may not be appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties irrevocably agree that all
claims with respect to such Action shall be heard and determined in such a
Delaware State or federal court.  The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such Action in the
manner provided in this Section 9.12 or in such other manner as may be
permitted by Law shall be valid and sufficient service thereof.

 

Section 9.13.   Waiver
of Jury Trial.  EACH PARTY
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 9.14.   Specific
Performance.  The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of
competent jurisdiction specified in Section 9.12, this being in addition
to any other remedy to which they are entitled at law or in equity.

 

[Signature Page Follows]

 

47

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the date
first written above.

 

 

	
   

  	
  ARTEMIS
  INTERNATIONAL SOLUTIONS

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Stefanovich

  	
   

  
	
   

  	
  Name:

  	
  Robert
  Stefanovich

  
	
   

  	
  Title:

  	
  EVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRILOGY,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Fallon

  	
   

  
	
   

  	
  Name:
  

  	
  Sean
  Fallon

  
	
   

  	
  Title: 

  	
  VP Finances

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RCN ACQUISITION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Fallon

  	
   

  
	
   

  	
  Name:
  

  	
  Sean
  Fallon

  
	
   

  	
  Title:Exhibit 10.2

 

STOCKHOLDERS AGREEMENT dated as of March 10, 2006 (this “Agreement”), between RCN Acquisition, Inc., a Delaware
corporation (“Newco”), and the entities listed
on Schedule A attached hereto (the “Stockholder”).

 

WHEREAS, Newco, Trilogy, Inc. and Artemis International Solutions
Corporation, a Delaware corporation (the “Company”), have
contemporaneously with the execution of this Agreement entered into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the “Merger Agreement”;
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement);

 

WHEREAS, each Stockholder is a beneficial owner of the number of shares
of capital stock of the Company set forth opposite such Stockholder’s name on
Schedule A hereto (such shares of capital stock of the Company being referred
to herein as such Stockholder’s “Original Shares”,
and together with any other shares of capital stock of the Company acquired by
such Stockholder after the date hereof and during the term of this Agreement
being referred to herein as such Stockholder’s “Subject
Shares”); and

 

WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Newco has requested that each Stockholder enter into this Agreement
and take certain actions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, each party hereto agrees as follows:

 

SECTION 1.                              Representations
and Warranties of Each Stockholder. 
Each Stockholder hereby, severally and not jointly, only as to itself,
represents and warrants to Newco as follows:

 

(a)                                  Organization;
Authority; Execution and Delivery; Enforceability.  Such Stockholder (i) is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and (ii) has all requisite corporate, partnership or other
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated by this Agreement and to comply with the terms of
this Agreement. The execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated by this Agreement and the compliance by such Stockholder with the
terms of this Agreement have been duly authorized by all necessary corporate,
partnership or other action on the part of such Stockholder and no other
corporate, partnership or other proceedings on the part of such Stockholder are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by such Stockholder and, assuming due execution by Newco, constitutes
a valid and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar Laws relating to the enforcement of
creditors’ rights generally and by general principles of equity. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this

 

 

Agreement and
compliance by such Stockholder with the provisions of this Agreement do not and
will not conflict with, or result in any violation or breach of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of, or result in termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of
any Lien in or upon any of the properties or assets of such Stockholder under,
or give rise to any increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of (i) any certificate of incorporation or
by-laws, partnership agreement or limited liability company agreement (or
similar organizational documents) of such Stockholder, (ii) any Contract to
which such Stockholder is a party or bound by or to which any of the properties
or assets of such Stockholder is bound by or subject or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any Law or judgment, in each case, applicable to such Stockholder or
its properties or assets other than, in the case of clauses (ii) and (iii),
conflicts, violations, breaches, defaults, rights, losses, Liens or
entitlements that individually or in the aggregate are not reasonably likely to
(x) impair in any material respect the ability of such Stockholder to
perform its obligations under this Agreement or (y) prevent or materially
impede or  delay, the consummation of any
of the transactions contemplated by this Agreement. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Authority is required by or with respect to such Stockholder in
connection with the execution and delivery of this Agreement by such
Stockholder or the consummation by such Stockholder of the transactions
contemplated by this Agreement or the compliance by such Stockholder with the
provisions of this Agreement, except for (1) filings under any applicable
competition, merger control, antitrust or similar Law or regulation, and (2)
filings with the SEC of such reports or other furnished or filed materials
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby.

 

(b)                                 The
Subject Shares.  As of the date
hereof, such Stockholder is the beneficial and the record owner of the Original
Shares and has good and marketable title to such Original Shares, free and
clear of any Liens, other than Liens that individually or in the aggregate are
not reasonably likely to (x) impair in any material respect the ability of such
Stockholder to perform its obligations under this Agreement or (y) prevent or
materially impede or delay, the consummation of any of the transactions
contemplated by this Agreement. As of the date hereof, except as set forth on
Schedule A hereto, such Stockholder does not own, of record or beneficially (i)
any shares of capital stock of the Company other than the Original Shares or
(ii) any option, warrant, call or other right to acquire or receive capital
stock or other equity or voting interests in the Company . Such Stockholder has
the sole right to vote and Transfer (as defined in Section 3(c)) such Original
Shares, and none of such Original Shares are subject to any voting trust or
other legally binding agreement, arrangement or restriction with respect to the
voting or the Transfer of such Original Shares, except as set forth in Sections
3 and 4 of this Agreement, and except for any such restrictions imposed by
applicable securities Laws.

 

SECTION 2.                              Representations
and Warranties of Newco.  Newco
hereby represents and warrants to each Stockholder as follows: Newco has all
requisite corporate power and authority to execute and deliver this Agreement,
to consummate the transactions contemplated by this Agreement and to comply
with the terms of this Agreement. The execution and delivery of this Agreement
by Newco, the consummation by Newco of the transactions contemplated by this
Agreement and the compliance by Newco with the terms of this Agreement have
been duly authorized by all necessary corporate action on the part of Newco and
no other corporate

 

2

 

proceedings on the
part of Newco are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. 
This Agreement has been duly executed and delivered by Newco and,
assuming due execution by each Stockholder, constitutes a valid and binding
obligation of Newco, enforceable against Newco in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar Laws
relating to the enforcement of creditors’ rights generally and by general
principles of equity. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement and compliance
by Newco with the provisions of this Agreement do not and will not conflict
with, or result in any violation or breach of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of, or result
in termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Newco under, or give rise to any increased, additional,
accelerated or guaranteed rights or entitlements under, any provision of (i)
the Certificate of Incorporation or By-laws of Newco, (ii) any Contract to
which Newco is a party or bound by or to which any of the properties or assets
of Newco is bound by or subject or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any Law or judgment,
in each case, applicable to Newco or its properties or assets other than, in
the case of clauses (ii) and (iii), conflicts, violations, breaches, defaults,
rights, losses, Liens or entitlements that individually or in the aggregate are
not reasonably likely to (x) impair in any material respect the ability of
Newco to perform its obligations under this Agreement or (y) prevent or
materially impede or  delay, the
consummation of any of the transactions contemplated by this Agreement.  No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Authority is
required by or with respect to Newco in connection with the execution and
delivery of this Agreement by Newco or the consummation by Newco of the
transactions contemplated hereby, except for (1) filings under any applicable
competition, merger control, antitrust or similar law or regulation and (2)
filings with the SEC of such reports or other furnished or filed materials
under the Exchange Act as may be required in 
connection with this Agreement and the transactions contemplated hereby.

 

SECTION 3.                              Covenants
of Each Stockholder.  Except as may
otherwise be consented to by Newco in writing, such Stockholder, only as to
itself, covenants and agrees as follows:

 

(a)                                  At
any meeting of the holders of the Company Common Stock and the holders of the
Preferred Stock of the Company (together, the “Stockholders
Meeting”) called to vote upon the Merger Agreement, the Merger or
any of the other transactions contemplated by the Merger Agreement (including
the treatment of the Subject Shares), or at any adjournment thereof, or in any
other circumstances upon which a vote, consent, adoption or other approval
(including by written consent solicitation) with respect to the Merger
Agreement, the Merger or any of the other transactions contemplated by the
Merger Agreement is sought, such Stockholder shall vote (or cause to be voted)
all the Subject Shares of such Stockholder in favor of, and shall consent to
(or cause to be consented to), the adoption of the Merger Agreement and the
approval of the terms thereof and of the Merger and each of the other
transactions contemplated by the Merger Agreement.

 

(b)                                 At
any meeting of the stockholders of the Company or at any adjournment thereof or
in any other circumstances upon which a vote, consent, adoption or other
approval

 

3

 

(including by
written consent solicitation) is sought, such Stockholder shall vote (or cause
to be voted) all the Subject Shares of such Stockholder against, and shall not
consent to (and shall cause not to be consented to), any of the following (or
any Contract to enter into, effect, facilitate or support any of the
following): (i) any Alternative Proposal or (ii) any amendment of the Company’s
Certificate of Incorporation or By-laws or other proposal, action or
transaction involving the Company or any of its subsidiaries or any of its
stockholders, which amendment or other proposal, action or transaction is
reasonably likely to prevent or materially impede or delay the consummation of
the Merger or the other transactions contemplated by the Merger Agreement or
the consummation of the transactions contemplated by this Agreement or to
dilute in any material respect the benefits to Newco of the Merger and the
other transactions contemplated by the Merger Agreement or the transactions
contemplated by this Agreement, or change in any manner the voting rights of
the Company Common Stock or the Preferred Stock (collectively, “Frustrating Transactions”).

 

(c)                                  Such
Stockholder shall not (i) prior to the Stockholders Meeting, sell, transfer,
pledge, assign, tender or otherwise dispose of (including by gift)
(collectively, “Transfer”), or consent to or
permit any Transfer of, any Subject Shares or any interest therein, or enter
into any Contract, option, call or other arrangement with respect to the
Transfer (including any profit sharing or other derivative arrangement) of any
Subject Shares or any interest therein, to any person other than pursuant to
this Agreement or the Merger Agreement, unless prior to any such Transfer the
transferee of such Subject Shares enters into a stockholder agreement with
Newco on terms substantially identical to the terms of this Agreement or agrees
to become a party to this Agreement pursuant to a joinder agreement
satisfactory to Newco or (ii) enter into any voting arrangement, whether by
proxy, voting agreement or otherwise, in connection with, directly or
indirectly, any Alternative Proposal or Frustrating Transaction with respect to
any Subject Shares, other than pursuant to this Agreement.

 

(d)                                 Subject
to Section 3(h) with regard to Proha Plc (“Proha”),
such Stockholder and its subsidiaries (other than the Company which is subject
to restrictions in the Merger Agreement) shall not, nor shall such Stockholder
or any of its subsidiaries authorize or direct any person or permit any
Representative of such Stockholder or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage, or take any other action
knowingly to facilitate, any Alternative Proposal or Frustrating Transaction or
the making of any inquiry or proposal that could reasonably be expected to lead
to a Alternative Proposal, or (ii) enter into, continue or otherwise
participate in any discussions or negotiations regarding, or furnish to any
person (other than Newco or its Representatives or the Company or its
Representatives) any information with respect to any Alternative Proposal or
Frustrating Transaction. Notwithstanding the foregoing and notwithstanding
Section 3(e), nothing in this Agreement shall limit or restrict any person that
is a director of the Company from acting in his or her capacity as a member of
the Board of Directors of the Company.

 

(e)                                  (i)                                     Such
Stockholder shall not commit or agree to take any action inconsistent with the
transactions contemplated by this Agreement or the transactions contemplated by
the Merger Agreement.

 

(ii)                                  Such
Stockholder shall not, and such Stockholder shall not permit any of its
subsidiaries (other than the Company) to, or authorize or direct any person or
permit

 

4

 

any director,
officer or employee of such Stockholder or any of its subsidiaries or any  Representative of such Stockholder or any of
its subsidiaries to, directly or indirectly, issue any press release or make
any other public statement with respect to the Merger Agreement, this
Agreement, the Merger or any of the other transactions contemplated by the
Merger Agreement or any of the transactions contemplated by this Agreement
without the prior written consent of Newco, except as may be  required by applicable Law, applicable stock
exchange rules, or court process.

 

(f)                                    In
the case of Proha, such Stockholder acknowledges and agrees that (i) its rights
under the Share Exchange Agreement executed between Opus360 Corporation and
Proha Plc, dated as of April 11, 2001, as amended July 10, 2001, shall
terminate as of the Closing with no further force or effect, including without
limitation any rights it may have under Section 8.3 thereof and (ii) its rights
under the Bylaws adopted on July 25, 2002, as amended from time to time,
including without limitation any rights it may have under Article III thereof or under the Certificate of Incorporation of the
Company shall terminate as of the Closing with no further force or effect, and
that in connection therewith the Certificate of Incorporation, Bylaws and Board
of Directors of the Company shall be as set forth in the Merger Agreement.

 

(g)                                 Such
Stockholder hereby waives any rights of appraisal, or rights to dissent from
the Merger, that such Stockholder may have.

 

(h)                                 Notwithstanding
Section 3(d), until 11:59 pm Pacific Time on March 31, 2006 (the “Proha Proposal Termination Date”), Proha may, directly or
indirectly through one or more of its Representatives (which Representatives
shall not include Cowen, Joseph or Kirkpatrick & Lockhart Nicholson Graham
LLP or any other person that is also a Representative of the Company or the
Company Board, but may include Pekka Pere and Olle Odman), subsidiaries or
affiliates, (i) enter into discussions or negotiations regarding a Proha
Proposal with any person (a “Third Party”),
(ii) provide any information or data that has been posted to the virtual data
room maintained by the Company in connection with the transactions contemplated
by the Merger Agreement (“VDR Information”)
to any of its Representatives or to any Third Party, if and only to the extent
that, prior to providing such information or data, the Company Board receives
from such person an executed confidentiality agreement on terms substantially
similar and no less favorable to the Company than those contained in the
Non-Disclosure Agreement (the “NDA Precondition”),
(iii) propose a Proha Proposal to the Company Board, and (iv) in the event the
Company Board, acting pursuant to Section 6.03 of the Merger Agreement, (x)
elects to engage in discussions or negotiations regarding any Proha Proposal
made in compliance with this Agreement, enter into discussions or negotiations
with the Company Board regarding any such Proha Proposal, or (y) provides
information or data other than VDR Information to Proha in response to any
Proha Proposal made in compliance with this Agreement, provide any information
or data so furnished to any of its Representatives, to any Third Party
participating in any such Proha Proposal or to representatives thereof,
provided that each such person satisfies the NDA Precondition. If Proha acts
pursuant to this Section 3(h) and the conditions set forth in Section 6.03 of
the Merger Agreement regarding the Company’s right to provide information or
data and to answer questions  regarding
such information or data in response to an actual or possible Proha Proposal
are satisfied, the Company shall have the right to provide information or data
and to answer questions regarding such information or data in response to an
actual or possible Proha Proposal. 
Parent and Newco agree not to contact any

 

5

 

such Third Party
in any matter related to this Agreement or to the Company during the duration
of this Agreement or 30 days thereafter. 
Nothing contained in this Agreement shall permit Proha or any of its
Representatives, subsidiaries or affiliates, or any Third Party, from engaging
in any activities, discussions or negotiations or providing any information or
data in connection with any Alternative Proposal that is not a Proha Proposal;
provided, that nothing contained in this Agreement or otherwise shall prohibit
any Third Party from being an equity or debt financing source to Newco in
connection with effecting the transactions contemplated by the Merger Agreement
(including any modifications proposed by Newco pursuant to Section 6.3
thereof).  A “Proha
Proposal” shall mean an Alternative Proposal made by Proha or by a
Third Party found by Proha, directly or indirectly, that would result in Proha
or such Third Party acquiring, directly or indirectly, more than 90% of the
shares of Company Common Stock that Proha does not own as of the date hereof
for a price per share of not less than $1.61 in cash and more than 90% of the
shares of Company Preferred Stock that Proha does not own as of the date hereof
for a price per share of not less than $2.20 in cash.

 

(i)                                     In
the case of each of the Series A Preferred Stockholders, each such Stockholder
acknowledges and agrees that (i) each share of Preferred Stock issued and
outstanding shall immediately prior to the Effective Time shall by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into the right to receive $2.20 per share in cash, payable without
interest, to the holder of such share, upon surrender, in the manner provided
in Section 2.02 of the Merger Agreement, of a certificate formerly evidencing
such share, (ii) its rights under the Securities Purchase Agreement dated June
16, 2004, by and between Artemis International Solutions Corporation and such
Stockholder, shall terminate as of the Closing with no further force or effect,
including without limitation, any rights it may have under Section 4 thereof,
and (iii) each Warrant held by such Stockholder shall be cancelled as of
immediately prior to the Effective Time.

 

SECTION 4.                              Grant
of Irrevocable Proxy; Appointment of Proxy.

 

(a)                                  Each
Stockholder hereby irrevocably grants to, and appoints, Lance Jones and Sean
Fallon and any other individual designated in writing by either of them, and
each of them individually, such Stockholder’s proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of such
Stockholder, to vote all of such Stockholder’s Subject Shares, or grant a
consent or approval in respect of such Subject Shares, (i) in favor of the
adoption of the Merger Agreement and the approval of the terms thereof and of
the Merger and each of the other transactions contemplated by the Merger
Agreement, (ii) against any Alternative Proposal or any Frustrating Transaction
and (iii) otherwise in accordance with Section 3 of this Agreement. The proxy
granted in this Section 4 shall expire upon the termination of this Agreement.

 

(b)                                 Each
Stockholder represents that any proxies heretofore given in respect of such
Stockholder’s Subject Shares are not irrevocable, and that all such proxies are
hereby revoked.

 

(c)                                  Each
Stockholder hereby affirms that such Stockholder’s irrevocable proxy set forth
in this Section 4 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance
of the duties of

 

6

 

such Stockholder
under this Agreement. Such Stockholder hereby further affirms that such
Stockholder’s irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Such Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the DGCL.

 

SECTION 5.                              Further
Assurances.  Each Stockholder shall,
from time to time, execute and deliver, or cause to be executed and delivered,
such additional or further consents, documents and other instruments as Newco
may request for the purpose of effectuating the matters covered by this
Agreement, including the grant of the proxies set forth in Section 4 of this
Agreement.

 

SECTION 6.                              Certain
Events.  Each Stockholder agrees that
this Agreement and the obligations hereunder shall attach to such Stockholder’s
Subject Shares and shall be binding upon any person to which legal or
beneficial ownership of such Subject Shares shall pass, whether by operation of
Law or otherwise, including such Stockholder’s heirs, guardians, administrators
or successors, and such Stockholder further agrees to take all actions
necessary to effectuate the foregoing.

 

SECTION 7.                              Assignment.  Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of Law or otherwise, by any of the parties hereto without the prior
written consent of the other parties hereto, except that Newco may in its sole
discretion assign, in whole or in one or more parts, any or all of its rights,
interests or obligations under this Agreement to any direct or indirect wholly
owned subsidiary or Affiliate of Newco, but no such assignment shall relieve
Newco of any of its obligations under this Agreement. Any purported assignment
in violation of this Section 7 shall be void. Subject to the preceding sentences
of this Section 7, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by, the parties hereto and their respective successors
and assigns.

 

SECTION 8.                              Termination.  This Agreement shall terminate upon the
earlier of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms. 
In addition, Proha shall have the right to terminate this Agreement with
respect to itself only following the receipt by the Company of an unsolicited
bona fide written Alternative Proposal that constitutes a Superior Proposal.

 

SECTION 9.                              General
Provisions.

 

(a)                                  Amendments.  This Agreement is between each Stockholder
and Newco severally and not jointly and may not be amended except by an
instrument in writing signed by Newco and such amending Stockholder. Any such
amendment shall be effective only as to Newco and such amending Stockholder.

 

(b)                                 Notices.  All notices, requests, claims, demands,
waivers and other communications under this Agreement shall be in writing and
shall be deemed given upon (i) personal delivery, (ii) transmitter’s
confirmation of a receipt of a facsimile transmission, or (iii) confirmed
delivery by standard overnight carrier or when mailed in the United States by
certified or registered mail, postage prepaid, to Newco in accordance with
Section 9.04 of the

 

7

 

Merger Agreement
and to the Stockholders at their respective addresses set forth on the
signature page hereto (or at such other address for a party as shall be
specified by like notice).

 

(c)                                  Interpretation.  When a reference is made in this Agreement to
a Section or a Schedule, such reference shall be to a Section of, or a Schedule
to, this Agreement unless otherwise indicated. 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. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”. The words “hereof”, “hereto”,
“hereby”, “herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The words “date hereof” shall refer to
the date of this Agreement. The term “or” is not exclusive. The word “extent”
in the phrase “to the extent” shall mean the degree to which a subject or other
thing extends, and such phrase shall not mean simply “if”. The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms. Any agreement or instrument defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified or supplemented.
References to a person are also to its permitted successors and assigns.

 

(d)                                 Counterparts;
Effectiveness.  This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement. This Agreement shall become effective against each
Stockholder and (as between such Stockholder and Newco) Newco when one or more
counterparts have been signed by such Stockholder and Newco and delivered to
the other party. The effectiveness of this Agreement shall be conditioned upon
the execution and delivery of the Merger Agreement by each of the parties
thereto.

 

(e)                                  Entire
Agreement; No Third-Party Beneficiaries. 
This Agreement (including the documents and instruments referred to
herein) (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter of this Agreement and (ii) is not intended
to confer upon any person other than the parties hereto (and the persons
specified as proxies in Section 4) any rights or remedies.

 

(f)                                    Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to any principles of conflicts of laws of such state.

 

(g)                                 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. 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 and to the end that
the transactions contemplated hereby are fulfilled to the extent possible.

 

8

 

(h)                                 Consent
to Jurisdiction.  Each of the parties
hereto irrevocably and unconditionally submits to the exclusive jurisdiction of
any Delaware State court for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
(and each agrees that no such action, suit or proceeding relating to this
Agreement shall be brought by it or any of its affiliates except in such
courts). Each of the parties hereto further agrees that, to the fullest extent
permitted by applicable Law, service of any process, summons, notice or
document by U.S. registered mail to such person’s respective address set forth
above shall be effective service of process for any action, suit or proceeding
in Delaware with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence. Each of
the Stockholders herby appoints the Company as its agent for service of process
for any claim, action, suit or other proceeding in Delaware with respect to any
matters to which it has submitted to jurisdiction as set forth above. Each of
the parties hereto irrevocably and unconditionally waives (and agrees not to
plead or claim) any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions contemplated
hereby in any Delaware State court or that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.

 

(i)                                     Enforcement.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Delaware State court, this
being in addition to any other remedy to which they are entitled at law or in
equity.

 

(j)                                     Waiver
of Jury Trial.  Each party hereto
hereby waives, to the fullest extent permitted by applicable Law, any right it
may have to a trial by jury in respect of any suit, action or other proceeding
directly or indirectly arising out of, under or in connection with this
Agreement. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
party would not, in the event of any action, suit or proceeding, seek to
enforce the foregoing waiver and (b) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement, by, among other things,
the mutual waiver and certifications in this clause (j).

 

[Signature Pages Follow]

 

9

 

IN WITNESS
WHEREOF, Newco has caused this Agreement to be signed by its officer thereunto
duly authorized and each Stockholder has signed this Agreement, all as of the
date first written above.

 

 

	
   

  	
  RCN ACQUISITION,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Fallon

  	
   

  
	
   

  	
   

  	
  Name: Sean
  Fallon

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  
	
   

  
	
  STOCKHOLDERS:

  
	
   

  
	
  PROHA PLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Pekka Pere

  	
   

  
	
   

  	
  Name:

  	
  Pekka Pere

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  
	
  Address:

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  EMANCIPATION CAPITAL LP

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  
	
  Address:

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							

 

 

SCHEDULE
A TO STOCKHOLDERS AGREEMENT

 

	
  Stockholder

  	
   

  	
  Common

  Stock

  	
   

  	
  Preferred Stock (and any Common

  Stock into which such Preferred

  Stock is converted)

  	
   

  	
  Warrants

  	
   

  	
  Options or

  Other Rights

  	
   

  
	
  Proha Plc

  	
   

  	
  7,977,062

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Emancipation Capital LP

  	
   

  	
  [152,284

  	
  ]

  	
  1,363,636

  	
   

  	
  136,364

  	
   

  	
  0

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]