Document:

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                                                                    EXHIBIT 10.2

                                    AGREEMENT

         THIS AGREEMENT, dated as of April 23, 2001 (the "Effective Date") by
and between GAYLORD ENTERTAINMENT COMPANY, a Delaware corporation having its
corporate headquarters at One Gaylord Drive, Nashville, Tennessee 37214
(together with all subsidiaries and other affiliates referred to as "the
Company") and MICHAEL D. ROSE ("Rose").

         WHEREAS, the Company desires to enter into an agreement regarding
Rose's service as Chairman of the Company's Board of Directors, and Rose desires
to serve as Chairman of the Company's Board of Directors and enter into such an
agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:

         1.       TERM; REPRESENTATION.

                  (a)      Term. The term of this Agreement shall commence on
         the Effective Date and shall continue for a period of two (2) years
         (the "Initial Term"). This Agreement shall automatically renew for one
         (1) year terms (each referred to an "Additional Term") (the Initial
         Term and each Additional Term collectively referred to as the "Term")
         unless either party notifies the other party at least 90 days prior to
         the expiration of the Initial Term or the first renewal term.

                  (b)      Representation. Rose hereby represents to the Company
         that the execution and delivery of this Agreement and the performance
         by Rose of his duties hereunder shall not constitute a breach of, or
         otherwise contravene, the terms of any agreement or policy to which
         Rose is a party or otherwise bound.

         2.       POSITION; RESPONSIBILITIES. During the Term, and subject to
         approvals required by the Delaware Business Corporation Act and the
         Company's Certificate of Incorporation and Bylaws, Rose shall serve as
         a member of the Board of Directors of the Company and, subsequent to
         the May 2001 Annual Meeting of the Shareholders of the Company, shall
         perform the duties of the Chairman of the Board as described by the
         Company's Restated Bylaws, as amended from time to time, and such other
         duties as may be prescribed by the Board of Directors.

         3.       REMUNERATION. During the Term, the Company shall pay Rose
$350,000 per year (the "Base Remuneration") for his services as Chairman of the
Board. Such payment shall be in lieu of any other fees or other compensation
payable to other directors of the Company.

         4.       STOCK OPTION GRANT. Subject to the vesting schedule provided
for herein, the Company hereby grants to Rose options to purchase 100,000 shares
of common stock of the Company ("Company Common Stock") (the "Stock Options").
The Stock Options shall (i) be granted pursuant to the Company's 1997 Omnibus
Stock Option and Incentive Plan as may hereafter be further amended (the
"Omnibus Plan"); (ii) be subject to the terms of a stock option agreement
between the Company and Rose in the form attached as Exhibit A; (iii) vest in
25,000 share increments on the first through fourth anniversary of the Effective
Date, (iv) be exercisable at the closing price of the Company's Common Stock as
reported in the Wall Street Journal for the trading

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day immediately preceding the award of the option grant by the Board of
Directors; and (v) have a term of ten years from the Effective Date.

         5.       RESTRICTED STOCK GRANT. Subject to the provisions of Section
12, the Company hereby grants to Rose 20,000 restricted shares of Company Common
Stock (the "Restricted Stock Grant"). The restrictions on the Restricted Stock
Grant shares shall terminate (i.e., the shares will become available for
distribution to Rose) in 5,000 share increments on the first through the fourth
anniversaries of the Effective Date. The Restricted Stock Grant shares shall be
granted pursuant to the Omnibus Plan, and shall otherwise be subject to the
terms of a restricted stock grant agreement between the Company and Rose in the
form attached as Exhibit B-1. If and when a restriction terminates as to a 5,000
share increment, the Company shall deliver such shares to Rose.

         6.       CONTINGENT RESTRICTED STOCK GRANT. Subject to the provisions
of Section 12, if the Company's Common Stock trades at an average closing price
of $32 or higher as reported in the Wall Street Journal for any period of thirty
(30) consecutive trading days during the Initial Term, the Company shall grant
to Rose an additional 20,000 restricted shares of Company Common Stock (the
"Contingent Restricted Stock Grant"). If the Contingent Restricted Stock Grant
is awarded, the restrictions on the Contingent Restricted Stock Grant shares
shall terminate (i.e., the shares will become available for distribution to
Rose) in 5,000 share increments on the first through the fourth anniversaries of
the day on which the condition for the award of the Contingent Restricted Stock
Grant is met. The Contingent Restricted Stock Grant shall be granted pursuant to
the Omnibus Plan, and shall otherwise be subject to the terms of a contingent
restricted stock grant agreement between the Company and Rose in the form
attached as Exhibit B-2. If and when a restriction terminates as to a 5,000
share increment, the Company shall deliver such shares to Rose.

         7.       ADDITIONAL BENEFITS. Rose shall be entitled to the following:

                  (a)      Vehicle Allowance. During the Term, Rose shall be
         entitled to receive from the Company a vehicle allowance of $1,050 per
         month, subject to future increases as may be granted to senior
         executives.

                  (b)      Use of Company Aircraft. During the Term and subject
         to availability, the Company shall make available a corporate aircraft
         to Rose for travel. In addition, the Company shall reimburse Rose for
         Rose's use of his personal aircraft in connection with the performance
         of his duties for the Company. To the extent Rose is required to travel
         on a commercial airline in connection with the performance of his
         duties for the Company, Rose shall be entitled to travel on a
         first-class basis.

                  (c)      Attorney's Fees. Rose shall be entitled to
         reimbursement for reasonable attorney's fees incurred by Rose in the
         review and negotiation of this Agreement, upon submission of
         documentation evidencing such expenses.

                  (d)      Benefit Plans. Rose shall be entitled to participate
         in all Company benefit plans, programs and arrangements of the Company
         for which other senior members of management are eligible.

         8.       BUSINESS EXPENSES. During the Term, the Company shall
reimburse Rose, in accordance with the Company's policies and procedures, for
all reasonable expenses incurred by Rose in connection with the performance of
his duties for the Company.

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         9.       ADMINISTRATIVE ASSISTANT. The Company shall employ, on an
at-will basis, Rose's administrative assistant, Norma Egbert, on terms
substantially similar to those of similarly situated employees in the Company.
Ms. Egbert's compensation shall be $55,000 per year, and she shall be entitled
to participate in any employee benefit plans available to similarly situated
employees.

         10.      FINANCIAL COUNSELING. The Company shall reimburse Rose up to a
maximum of $15,000 per year for his expenses in obtaining financial counseling,
upon submission of documentation evidencing such expenses.

         11.      TERMINATION. Rose's service as Chairman of the Board of
Directors may be terminated prior to the end of the Term as follows:

                  (a)      Termination by Death. Upon the death of Rose
         ("Death"), Rose's service as Chairman of the Board shall automatically
         terminate as of the date of Death.

                  (b)      Termination by Company for Permanent Disability. At
         the option of the Board of Directors, Rose's service as Chairman of the
         Board of Directors may be terminated by written notice to Rose or his
         personal representative in the event of the Permanent Disability of
         Rose. As used herein, the term "Permanent Disability" shall mean a
         physical or mental incapacity or disability which renders Rose unable
         substantially to render the services contemplated hereunder for a
         period of ninety (90) consecutive days or one hundred eighty (180) days
         during any twelve (12) month period as determined in good faith by the
         Board of Directors.

                  (c)      By the Board of Directors With Cause. Rose's
         termination as Chairman of the Board by the Board of Directors shall be
         considered "With Cause" upon the occurrence of any one or more of the
         following events (each, a "Cause"):

                           (i)      any action by Rose constituting material
                  fraud, material self-dealing, material dishonesty or
                  embezzlement in the course of his service hereunder; or

                           (ii)     any conviction of Rose of a crime involving
                  moral turpitude.

                  (d)      By the Board of Directors Without Cause. In the event
         that Rose's service as Chairman of the Board of Directors is terminated
         by the Board for any reason other than a Cause, such termination shall
         be "Without Cause."

                  (e)      By Rose for Good Reason. At the option of Rose, Rose
         may terminate his service as Chairman of the Board by written notice to
         the Company given within a reasonable time after the occurrence of a
         material breach by the Company of any of its obligations under this
         Agreement and the failure by the Company to cure such breach within
         thirty (30) days of such notice ("Good Reason").

                  (f)      Expiration of the Term. The expiration of the Initial
         Term or any Additional Term shall not for any purpose be deemed a
         termination under Section 11(c), (d) or (e) hereinabove.

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         12.      EFFECT OF TERMINATION; TREATMENT OF STOCK OPTIONS AND
RESTRICTED STOCK GRANTS UPON EXPIRATION OF TERM.

                  (a)      Effect of Termination by Death. Upon the termination
         of Rose's service as Chairman of the Board of Directors because of
         Death, Rose's estate shall be entitled to receive an amount equal to
         the accrued but unpaid Base Remuneration through the date of
         termination as well as any unreimbursed reasonable business expenses
         incurred by Rose through the date of termination. In addition, all
         restrictions shall be removed from the Restricted Stock Grant shares
         and the Contingent Restricted Stock Grant shares, if any, and the
         vesting and exercise of Rose's Stock Options shall be governed by the
         Omnibus Plan.

                  (b)      Effect of Termination for Permanent Disability. Upon
         the termination of Rose's service as Chairman of the Board of Directors
         because of Permanent Disability, Rose shall be entitled to receive his
         Base Remuneration until he becomes eligible for long term disability
         benefits as well as any unreimbursed reasonable business expenses
         incurred by Rose through the date of termination. Rose shall be
         entitled to the Restricted Stock Grant shares or Contingent Restricted
         Stock Grant shares that are free from restrictions as of the date of
         termination, and the vesting and exercise of Rose's Stock Options shall
         be governed by the Omnibus Plan. Rose shall be entitled to continue to
         receive group medical insurance benefits from the date of termination
         until the time he is eligible to receive long term disability benefits.

                  (c)      Effect of Termination by the Company With Cause or by
         Rose Without Good Reason. Upon the termination of Rose's service as
         Chairman of the Board of Directors With Cause or by Rose for any reason
         other than Good Reason, Rose shall be entitled to receive an amount
         equal to the accrued but unpaid Base Remuneration through the date of
         termination as well as any unreimbursed reasonable business expenses
         incurred by Rose through the date of termination. Rose shall be
         entitled only to the Restricted Stock Grant shares or Contingent
         Restricted Stock Grant shares that are free from restrictions as of the
         date of termination. All Stock Options, to the extent not theretofore
         exercised, shall terminate on the date of termination of Rose's service
         as Chairman of the Board of Directors by the Company With Cause or by
         Rose without Good Reason.

                  (d)      Effect of Termination by the Company Without Cause or
         by Rose for Good Reason. Upon the termination of Rose's service as
         Chairman of the Board of Directors Without Cause or by Rose for Good
         Reason, Rose shall be entitled to receive an amount equal to the
         accrued but unpaid Base Remuneration through the date of such
         termination, as well as any unreimbursed reasonable business expenses
         incurred by Rose through the date of termination, all unvested Stock
         Options shall immediately vest, and all restrictions shall be removed
         from the Restricted Stock Grant shares and the Contingent Restricted
         Stock Grant shares, if any. Rose shall have two (2) years from the date
         of such termination Without Cause or by Rose for Good Reason during the
         Initial Term to exercise all vested Stock Options.

                  (e)      Expiration of Initial Term. Unless Rose's service as
         Chairman of the Board of Directors is terminated prior to the end of
         the Initial Term, upon expiration of the Initial Term, Rose's Stock
         Options, Restricted Stock Grant shares, and Contingent Restricted Stock
         Grant shares, if any, shall be treated as follows:

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                           (i)      All contingencies with respect to the
                  Contingent Restricted Stock Grant shares shall be removed;

                           (ii)     If Rose continues to serve the Company in
                  any capacity following the expiration of the Initial Term, all
                  unvested Stock Options shall continue to vest and the
                  restrictions shall continue to be removed from the Restricted
                  Stock Grant shares and Contingent Stock Grant shares as
                  provided in Sections 4-6 of this Agreement and in the stock
                  option agreement and restricted stock grant agreement(s)
                  provided for therein.

                           (iii)    If Rose ceases to serve the Company in any
                  capacity at any time following expiration of the Initial Term,
                  then, at the time Rose ceases to serve, all unvested Stock
                  Options shall immediately vest, all restrictions shall be
                  removed from the Restricted Stock Grant shares and all
                  restrictions shall be removed from the Contingent Restricted
                  Stock Grant shares. In such event, Rose shall be entitled to
                  exercise the Stock Options at any time prior to the expiration
                  date of the Stock Option term notwithstanding anything to the
                  contrary in the Omnibus Plan or in this Agreement.

         13.      CHANGE OF CONTROL.

                  (a)      Definition. A "Change of Control" shall be deemed to
         have taken place if:

                           (i)      any person or entity, including a "group" as
                  defined in Section 13(d)(3) of the Securities Exchange Act of
                  1934, other than the Company, a wholly-owned subsidiary
                  thereof, Edward L. Gaylord or any member of his immediate
                  family or any trusts or other entities controlled by Edward L.
                  Gaylord or any member of his immediate family, or any employee
                  benefit plan of the Company or any of its subsidiaries,
                  hereafter becomes the beneficial owner of Company securities
                  having 50% or more of the combined voting power of the then
                  outstanding securities of the Company that may be cast for the
                  election of directors of the Company (other than as a result
                  of the issuance of securities initiated by the Company in the
                  ordinary course of business);

                           (ii)     any person or entity, including a "group" as
                  defined in Section 13(d)(3) of the Securities Exchange Act of
                  1934, becomes the beneficial owner of Company securities
                  having greater voting power than the Company securities held
                  by Edward L. Gaylord, any member of his immediate family, and
                  any trusts or other entities controlled by Edward L. Gaylord
                  or any member of his immediate family; or

                           (iii)    as the result of, or in connection with, any
                  cash tender or exchange offer, merger or other business
                  combination, sale of assets or contested election, or any
                  combination of the foregoing transactions, the holders of all
                  the Company's securities entitled to vote generally in the
                  election of directors of the Company immediately prior to such
                  transaction constitute, following such transaction, less than
                  a majority of the combined voting power of the
                  then-outstanding securities of the Company or any successor
                  corporation or entity entitled to vote generally in the
                  election of the directors of the Company or such other
                  corporation or entity after such transactions; or

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                           (iv)     the Company sells all or substantially all
                  of the assets of the Company.

                  (b)      Effect of Change of Control. In the event that within
         one year following a Change of Control the Board of Directors
         terminates Rose's service as Chairman of the Board Without Cause, or
         Rose terminates his service as Chairman of the Board for Good Reason,
         Rose shall be entitled to the greater of (i) a lump-sum payment of one
         year's Base Remuneration from the date of termination or (ii) a
         lump-sum payment of Rose's Base Remuneration for the remainder of the
         Initial Term or Additional Term, as applicable, of this Agreement. In
         addition, upon such termination, all unvested Stock Options shall vest
         and all restrictions shall be removed from the Restricted Stock Grant
         shares and the Contingent Restricted Stock Grant shares, if any. Rose
         shall have two (2) years from the date of such termination during the
         Initial Term to exercise all vested Stock Options.

                  (c)      Going Private Transaction. Notwithstanding the
         foregoing, if Edward L. Gaylord or any member of his immediate family
         or any trusts or other entities controlled by Edward L. Gaylord or any
         member of his immediate family initiates any Rule 13e-3 transaction, as
         that term is defined in Rule 13e-3 promulgated under the Securities
         Exchange Act of 1934 (the "Rule 13e-3 Transaction"), and all conditions
         precedent to the Company's obligation to consummate the Rule 13e-3
         Transaction shall have been satisfied, all unvested Stock Options shall
         vest and all restrictions shall be removed from the Restricted Stock
         Grant shares and the Contingent Restricted Stock Grant shares, if any;
         provided, however, that if the Rule 13e-3 Transaction is not thereafter
         consummated, the acceleration of Stock Option vesting and removal of
         Restricted Stock Grant or Contingent Restricted Stock Grant share
         restrictions shall be deemed to be null and void.

                  14.      Covenants.

                  (a)      General. Rose and the Company understand and agree
         that the purpose of the provisions of this Section 14 is to protect
         legitimate business interests of the Company, as more fully described
         below, and is not intended to impair or infringe upon Rose's right to
         work, earn a living, or acquire and possess property from the fruits of
         his labor. Rose hereby acknowledges that the post-employment
         restrictions set forth in this Section 14 are reasonable and that they
         do not, and will not, unduly impair his ability to earn a living after
         the termination of his employment with the Company. Therefore, subject
         to the limitations of reasonableness imposed by law upon restrictions
         set forth herein, Rose shall be subject to the restrictions set forth
         in this Section 14.

                  (b)      Definitions. The following capitalized terms used in
         this Section 14 shall have the meanings assigned to them below, which
         definitions shall apply to both the singular and the plural forms of
         such terms: "Confidential Information" means any confidential or
         proprietary information possessed by the Company without limitation,
         any confidential "know-how," customer lists, details of client and
         consultant contracts, current and anticipated customer requirements,
         pricing policies, price lists, market studies, business plans,
         operational methods, marketing plans or strategies, product development
         techniques or plans, computer software programs (including object code
         and source code), data and documentation, data base technologies,
         systems, structures and architectures, inventions and ideas, past,
         current and planned research and development, compilations, devices,
         methods,

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         techniques, processes, financial information and data, business
         acquisition plans, new personnel acquisition plans and any other
         information that would constitute a trade secret under the common law
         or statutory law of the State of Tennessee.

                           "Person" means any individual or any corporation,
                  partnership, joint venture, association or other entity or
                  enterprise.

                           "Protected Employees" means employees of the Company
                  or its affiliated companies who are employed by the Company or
                  its affiliated companies at any time within six (6) months
                  prior to the date of termination of Rose for any reason
                  whatsoever or any earlier date (during the Restricted Period)
                  of an alleged breach of the Restrictive Covenants by Rose.

                           "Restricted Period" means the period of Rose's
                  employment by the Company plus a period extending two (2)
                  years from the date of termination of employment; provided,
                  however, the Restricted Period shall be extended for a period
                  equal to the time during which Rose is in breach of his
                  obligations to the Company under this Section 14.

                           "Restrictive Covenants" means the restrictive
                  covenants contained in Section 14(c) hereof:

                  (c)      Restrictive Covenants.

                           (i)      Restriction on Disclosure and Use of
                  Confidential Information. Rose understands and agrees that the
                  Confidential Information constitutes a valuable asset of the
                  Company and its affiliated entities, and may not be converted
                  to Rose's own use or converted by Rose for the use of any
                  other Person. Accordingly, Rose hereby agrees that Rose shall
                  not, directly or indirectly, at any time during the Restricted
                  Period or thereafter, reveal, divulge or disclose to any
                  Person not expressly authorized by the Company any
                  Confidential Information, and Rose shall not, at any time
                  during the Restricted Period or thereafter, directly or
                  indirectly, use or make use of any Confidential Information in
                  connection with any business activity other than that of the
                  Company. The parties acknowledge and agree that this Agreement
                  is not intended to, and does not, alter either the Company's
                  rights or Rose's obligations under any state or federal
                  statutory or common law regarding trade secrets and unfair
                  trade practices,

                           (ii)     Non-solicitation of Protected Employees.
                  Rose understands and agrees that the relationship between the
                  Company and each of its Protected Employees constitutes a
                  valuable asset of the Company and may not be converted to
                  Rose's own use or converted by Rose for the use of any other
                  Person. Accordingly, Rose hereby agrees that during the
                  Restricted Period Rose shall not directly or indirectly on
                  Rose's own behalf or on behalf of any Person solicit any
                  Protected Employee to terminate his or her employment with the
                  Company.

                           (iii)    Non-interference with Company Opportunities.
                  Rose understands and agrees that all business opportunities
                  with which he is involved during his employment with the
                  Company constitute valuable assets of the Company and its

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                  affiliated entities, and may not be converted to Rose's own
                  use or converted by Rose for the use of any other Person.
                  Accordingly, Rose hereby agrees that during the Restricted
                  Period or thereafter, Rose shall not directly or indirectly on
                  Rose's own behalf or on behalf of any Person, interfere with,
                  solicit, pursue, or in any way make use of any such business
                  opportunities.

                  (d)      Exceptions from Disclosure Restrictions. Anything
         herein to the contrary notwithstanding, Rose shall not be restricted
         from disclosing or using Confidential Information that: (i) is or
         becomes generally available to the public other than as a result of an
         unauthorized disclosure by Rose or his agent; (ii) becomes available to
         Rose in a manner that is not in contravention of applicable law from a
         source (other than the Company or its affiliated entities or one of its
         or their officers, employees, agents or representatives) that is not
         known by Rose, after reasonable investigation, to be bound by a
         confidential relationship with the Company or its affiliated entities
         or by a confidentiality or other similar agreement; or (iii) is
         required to be disclosed by law, court order or other legal process;
         provided, however, that in the event disclosure is required by law,
         court order or legal process, Rose shall provide the Company with
         prompt notice of such requirement so that the Company may seek an
         appropriate protective order prior to any such required disclosure by
         Rose.

                  (e)      Enforcement of the Restrictive Covenants.

                           (i)      Rights and Remedies upon Breach. In the
                  event Rose breaches, or threatens to commit a breach of, any
                  of the provisions of the Restrictive Covenants, the Company
                  shall have the right and remedy to enjoin, preliminarily and
                  permanently, Rose from violating or threatening to violate the
                  Restrictive Covenants and to have the Restrictive Covenants
                  specifically enforced by any court of competent jurisdiction,
                  it being agreed that any breach or threatened breach of the
                  Restrictive Covenants would cause irreparable injury to the
                  Company and that money damages would not provide an adequate
                  remedy to the Company. The rights referred to herein shall be
                  independent of any others and severally enforceable, and shall
                  be in addition to, and not in lieu of, any other rights and
                  remedies available to the Company at law or in equity.

                           (ii)     Severability of Covenant. Rose acknowledges
                  and agrees that the Restrictive Covenants are reasonable and
                  valid in all respects. If any court determines that any
                  Restrictive Covenants, or any part thereof, is invalid or
                  unenforceable, the remainder of the Restrictive Covenants
                  shall not thereby be affected and shall be given full effect,
                  without regard to the invalid portions.

         15.      COOPERATION IN FUTURE MATTERS. Rose hereby agrees that, for a
period of three (3) years following the date of the termination of his service
as Chairman of the Board, he shall cooperate with the Company's reasonable
requests relating to matters that pertain to Rose's service as Chairman of the
Board of the Company, including, without limitation, providing information of
limited consultation as to such matters, participating in legal proceedings,
investigations or audits on behalf of the Company, or otherwise making himself
reasonably available to the Company for other related purposes. Any such
cooperation shall be performed at times scheduled taking into consideration
Rose's other commitments, and Rose shall be compensated at a per diem rate of
$2,000 to the extent such cooperation is required on more than an occasional and
limited basis. Rose shall also be reimbursed for all reasonable out of pocket
expenses. Rose shall not be required to perform

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such cooperation to the extent it conflicts with any requirements of exclusivity
of service for any other entity, nor in any manner that in the good faith belief
of Rose would conflict with his rights under or ability to enforce this
Agreement.

         16.      INDEMNIFICATION. The Company shall indemnify Rose and hold him
harmless from and against any and all costs, expenses, losses, claims, damages,
obligations or liabilities (including actual attorneys fees and expenses)
arising out of any acts or failures to act by the Company, its directors,
employees or agents that occurred prior to the Effective Date, or arising out of
or relating to any acts, or omissions to act, made by Rose on behalf of or in
the course of performing services for the Company to the fullest extent
permitted by the Bylaws of the Company, or, if greater, as permitted by
applicable law, as the same shall be in effect from time to time. If any claim,
action, suit or proceeding is brought, or any claim relating thereto is made,
against Rose with respect to which indemnity may be sought against the Company
pursuant to this Section, Rose shall notify the Company in writing thereof, and
the Company shall have the right to participate in, and to the extent that it
shall wish, in its discretion, assume and control the defense thereof, with
counsel satisfactory to Rose.

         17.      BINDING ARBITRATION AND LEGAL FEES. Any controversy or claim
between or among the parties hereto, including but not limited to those arising
out of or relating to this Agreement or any related agreements or instruments,
including any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the Federal Arbitration Act
(or if not applicable, the law of the state of Tennessee), the Commercial
Arbitration Rules of the American Arbitration Association in effect as of the
date hereof, and the provisions set forth below. In the event of any
inconsistency, the provisions herein shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any party to
the Agreement may bring an action, including a summary or expedited proceeding,
to compel arbitration of any controversy or claim to which this Agreement
applies in any court having jurisdiction over such action; provided, however,
that all arbitration proceedings shall take place in Nashville, Tennessee. The
arbitration body shall set forth its findings of fact and conclusions of law
with citations to the evidence presented and the applicable law, and shall
render an award based thereon. In making its determinations and award(s), the
arbitration body shall base its award on applicable law and precedent, and shall
not entertain arguments regarding punitive damages, nor shall the arbitration
body award punitive damages to any person. Each party shall bear its own
attorneys' fees, costs, and expenses in the arbitration.

         18.      MISCELLANEOUS.

                  (a)      Governing Law. This Agreement shall be governed by
         and construed in accordance with the laws of the State of Tennessee
         without reference to principles of conflicts of laws.

                  (b)      Entire Agreement/Amendments. This Agreement contains
         the entire understanding of the parties with respect to its subject
         matter. There are no restrictions, agreements, promises, warranties,
         covenants or undertakings between the parties with respect to the
         subject matter herein other than those expressly set forth herein. This
         Agreement may not be altered, modified, or amended except by written
         instrument signed by the parties hereto.

                  (c)      No Waiver. The failure of a party to insist upon
         strict adherence to any term of this Agreement on any occasion shall
         not be considered a waiver of such party's rights or

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         deprive such party of the right thereafter to insist upon strict
         adherence to that term or any other term of this Agreement.

                  (d)      Severability. In the event that any one or more of
         the provisions of this Agreement shall be or become invalid, illegal or
         unenforceable in any respect, the validity, legality and enforceability
         of the remaining provisions of this Agreement shall not be affected
         thereby.

                  (e)      Assignment. This Agreement shall not be assignable by
         Rose. This Agreement may be assigned by the Company to a company which
         is a successor in interest to substantially all of the business
         operations of the Company. Such assignment shall become effective when
         the Company notifies the Rose of such assignment or at such later date
         as may be specified in such notice. Upon such assignment, the rights
         and obligations of the Company hereunder shall become the rights and
         obligations of such successor company, provided that any assignee
         expressly assumes the obligations, rights and privileges of this
         Agreement.

                  (f)      Headings. The section headings contained herein are
         for the purposes of convenience only and are not intended to define or
         limit the contents of the sections.

                  (g)      Successors; Binding Agreement. This Agreement shall
         inure to the benefit of and be binding upon personal or legal
         representatives, executors, administrators, successors, heirs,
         distributes, devises and legatees.

                  (h)      Notice. For the purpose of this Agreement, notices
         and all other communications provided for in the Agreement shall be in
         writing and shall be deemed to have been duly given when delivered or
         mailed by United States registered mail, return receipt requested,
         postage prepaid, addressed to the respective addresses set forth below,
         or to such other address as either party may have furnished to the
         other in writing in accordance herewith, except that notice of change
         of address shall be effective only upon receipt.

                  If to Company, to:

                           Gaylord Entertainment Company
                           One Gaylord Drive
                           Nashville, Tennessee 37214
                           Attention: Rod Connor
                           Facsimile Number: (615) 316-6312

                  With a copy to:

                           Thomas J. Sherrard, Esq.
                           Sherrard & Roe, PLC
                           424 Church Street, Suite 2000
                           Nashville, Tennessee 37219
                           Facsimile Number: (615) 742-4539

                                       10

<PAGE>   11

                  If to Rose, to:

                           MIDARO INVESTMENTS, INC.
                           6305 Humphreys Boulevard
                           Suite 110
                           Memphis, TN 38120

                  With a copy to:

                           Ralph B. Lake, Esq.
                           Burch, Porter & Johnson PLLC
                           130 N Court Ave
                           Court Square Office
                           Memphis, TN  38103-2217
                           Facsimile Number: (901) 524-5024

                  (i)      Counterparts. This Agreement may be signed in
         counterparts, each of which shall be an original, with the same effect
         as if the signatures thereto and hereto were upon the same instrument.

                  (j)      No Third Party Beneficiary. This Agreement shall not
         confer any rights or remedies upon any person or entity other than the
         parties hereto and their respective successors and permitted assigns.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                                 /s/ Michael D. Rose
                                       -----------------------------------------
                                       Michael D. Rose

                                       GAYLORD ENTERTAINMENT COMPANY

                                    By:          /s/ E. K. Gaylord II
                                       -----------------------------------------
                                       E. K. Gaylord II, Chairman
                                       Board of Directors

                                       11

<PAGE>   12

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

                          GAYLORD ENTERTAINMENT COMPANY
                  1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

         This STOCK OPTION AGREEMENT (the "Agreement") is by and between Gaylord
Entertainment Company, a Delaware corporation (the "Company"), and Michael D.
Rose (the "Grantee"), under the Company's 1997 Omnibus Stock Option and
Incentive Plan, as amended (the "Plan").

         Pursuant to the terms of that certain Agreement, dated as of April 23,
2001, between the Company and Grantee (the "Chairman Agreement"), in order to
provide an incentive to the Grantee to exert his utmost efforts on behalf of the
Company, the Grantee has been awarded a nonqualified stock option (the "Option")
to purchase certain shares of Common Stock of the Company, par value $.01 per
share ("Common Stock"), on the terms and conditions set forth in the Plan and
this Agreement.

         SECTION 1.        THE OPTION GRANT. The Grantee is hereby granted a
Nonqualified Stock Option to purchase 100,000 shares of Common Stock of the
Company at a purchase price of $25.25 per share. Said Nonqualified Stock Option
is subject to the terms set forth below.

         SECTION 2.        EXERCISE OF OPTION RIGHTS.

         2.1      Times When the Option Can Be Exercised. The Option shall vest
and become exercisable pursuant to the terms of the Chairman Agreement.

         2.2      Term of Option. The term during which the Option may be
exercised shall terminate on April 22, 2011 subject to earlier termination as
provided for in the Chairman Agreement or Section 3 of this Agreement (the
"Option Term").

         2.3      Notice of Exercise. If the Grantee wishes to exercise his
rights hereunder, the Grantee must give notice of exercise to the Company at the
Company's principal office. The Grantee must give the notice in writing in form
satisfactory to the Compensation Committee of the Board of Directors of the
Company (the "Committee"). The Grantee must include with the notice full payment
for any shares being purchased under the Option (unless, in accordance with the
Plan, the Committee shall have provided otherwise), and any taxes due under
Section 2.4.2 hereof.

         2.4      Payment.

                  2.4.1    Payment for any Common Stock being purchased under
the Option must be made in cash, by certified or bank check, or by delivering to
the Company Common Stock of the Company which the Grantee already owns. If the
Grantee pays by delivering Common Stock of the Company, the Grantee must include
with the notice of exercise the certificates for the Common Stock duly endorsed
for transfer. The Company will value the Common Stock delivered by the

                                      A-1

<PAGE>   13

Grantee at its Fair Market Value as of the date of receipt as set forth in the
Plan and, if the value of the Common Stock delivered by the Grantee exceeds the
amount required under this Section 2.4.1, will return to the Grantee cash in an
amount equal to the value, so determined, of any fractional portion of a share
of Common Stock exceeding the amount required and will issue a certificate for
any whole share of Common Stock exceeding the amount required.

                  2.4.2    The Grantee cannot buy any Common Stock under the
Option unless, at the time the Grantee gives notice of exercise to the Company,
the Grantee includes with such notice payment in cash, by certified or bank
check, of all local, state, or federal withholding taxes due, if any, on account
of buying Common Stock under the Option or gives other assurance to the Company
satisfactory to the Committee of the payment of those withholding taxes.

         2.5      Transfer.

                  2.5.1    The Company shall deliver certificates for Common
Stock bought under the Option as soon as practicable after receiving payment for
the Common Stock and for any taxes under Section 2.4.2 hereof, and all documents
required under the Plan and this Agreement. The certificates will be made out in
the name of the Grantee.

                  2.5.2    If the Plan or any law, regulation, or interpretation
requires the Company to take any action regarding the Common Stock before the
Company issues certificates for the Common Stock being purchased, the Company
may delay delivering the certificates for the Common Stock for the period
necessary to take that action.

         SECTION 3.        TERMINATION.

         3.1      Generally. Except as otherwise provided in the Chairman
Agreement, this Agreement and the Plan, the Option may not be exercised unless
the Grantee is then in the service of the Company as its Chairman of the Board
of Directors ("Chairman"), and unless the Grantee has remained continuously as
the Company's Chairman since the date of grant of the Option. Unless otherwise
set forth in the Chairman Agreement or determined by the Committee at or after
the date of grant, in the event that the Grantee ceases to serve as Chairman,
any portion of the Option that is exercisable at the time of such termination
may be exercised by Grantee for a period of 90 days from the date of such
termination or until the expiration of the stated term of the Option, whichever
period is shorter. Provided, however, if Grantee remains Chairman until the
expiration of the Initial Term, Grantee shall have until the expiration of the
Option Term to exercise the Options.

         3.2      Death or Disability. If the Grantee dies while serving as
Chairman (or within the period of extended exercisability provided herein), or
if the Grantee's service as Chairman terminates by reason of Disability, the
Option will become fully vested and exercisable (notwithstanding the provisions
of Section 2.1 hereof), and may be exercised by the Grantee, by the legal
representative of the Grantee's estate, or by the legatee under the Grantee's
will at any time until the expiration of the term of the Option provided in
Section 2.2 hereof.

         3.3      Retirement. If the Grantee's service as Chairman terminates by
reason of Retirement, any portion of the Option may be exercised by Grantee, to
the extent such portion was exercisable at the time of such Retirement or on
such accelerated basis as the Committee may determine at or after the date of
grant (but before the date of such Retirement) at any time until the expiration
of the term of the Option provided in Section 2.2 hereof.

                                      A-2

<PAGE>   14

         3.4      Cause or by Grantee Without Good Reason. If the Grantee's
service as Chairman is terminated by the Company for Cause or by Grantee Without
Good Reason, as determined by the Committee in its sole discretion, the Option,
to the extent not theretofore exercised, shall terminate on the date of such
termination.

         3.5      Committee Discretion. Notwithstanding the provisions of
subsections 3.1 through 3.4 above, but subject to the provisions of Section 4
below, the Committee may, in its sole discretion, at or after the date of grant
(but before the date of termination), establish different terms and conditions
pertaining to the effect on any Option of termination of a Grantee's service as
Chairman, to the extent permitted by applicable federal and state law and
provided that such differing terms and conditions are not to the Grantee's
detriment.

         SECTION 4.        GOVERNING PROVISIONS. This Agreement is made under
and subject to the provisions of the Plan, and all of the provisions of the Plan
are also provisions of this Agreement. Capitalized terms used but not defined
herein shall have the same meanings ascribed to such terms in the Plan. If there
is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. If there is a
difference or conflict between the provisions of this Agreement and/or the
provisions of the Plan and the provisions of the Chairman Agreement, the
provisions of the Chairman Agreement will govern. By signing this Agreement, the
Grantee confirms that he has received a copy of the Plan.

         SECTION 5.        MISCELLANEOUS.

         5.1      Entire Agreement. This Agreement, the Chairman Agreement and
the Plan contain all of the understandings between the Company and Grantee
concerning the Option and include any earlier negotiations and understandings.
The Company and Grantee have made no promises, agreements, conditions, or
understandings relating to the Option, either orally or in writing, that are not
included in this Agreement, the Chairman Agreement or the Plan.

         5.2      No Right to Future Service. None of the provisions of this
Agreement or the Plan will interfere with or limit the right of the Company to
end the Grantee's service as Chairman pursuant to the terms of the Chairman
Agreement.

         5.3      Captions. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe, or describe the scope or intent of the provisions of this
Agreement.

         5.4      Counterparts. This Agreement may be executed in counterparts,
each of which when signed by the Company and the Grantee will be deemed an
original and all of which together will be deemed the same agreement.

         5.5      Notice. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, to the
principal office of the Company and, if to Grantee, to the Grantee's last known
address on the personnel records of the Company.

         5.6      Amendment. This Agreement may be amended by the Company,
provided that unless the Grantee consents in writing, the Company cannot amend
this Agreement if the amendment

                                      A-3

<PAGE>   15

will materially change or impair the Grantee's rights under this Agreement and
such change is not to the Grantee's benefit.

         5.7      Succession and Transfer. Each and all of the provisions of
this Agreement are binding upon and inure to the benefit of the Company and the
Grantee and their heirs, successors and assigns; however, neither the Option nor
this Agreement is transferable, without the prior written consent of the
Committee, other than (i) by will or by the laws of descent and distribution,
(ii) by the Grantee to a member of his Immediate Family, or (iii) to a trust for
the benefit of the Grantee or a member of his Immediate Family.

         5.8      Governing Law. This Agreement shall be governed and construed
exclusively in accordance with the law of the State of Delaware applicable to
agreements to be performed in the State of Delaware to the extent it may apply.

         The Company and the Grantee have caused this Agreement to be signed and
delivered as of the __ day of ________________, 2001.

                                       GAYLORD ENTERTAINMENT COMPANY

                                       By:
--------------------------                --------------------------------------
Michael D. Rose                           Rod Connor, Senior Vice President and
                                          Chief Administrative Officer

                                      A-4

<PAGE>   16

                                   EXHIBIT B-1

                           RESTRICTED STOCK AGREEMENT

                          GAYLORD ENTERTAINMENT COMPANY
                  1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

         This RESTRICTED STOCK AGREEMENT (the "Agreement") is by and between
Gaylord Entertainment Company, a Delaware corporation (the "Company"), and
Michael D. Rose, (the "Grantee"), pursuant to the Company's 1997 Omnibus Stock
Option and Incentive Plan (the "Plan").

         SECTION 1.        RESTRICTED STOCK AWARD. Effective April 23, 2001, the
Grantee is hereby awarded the right to receive 20,000 shares (the "Restricted
Stock") of the Company's Common Stock, Par Value $ .01 per share (the "Common
Stock"), subject to the terms and conditions of this Agreement and the Plan.

         SECTION 2.        VESTING OF THE AWARD. The Grantee shall become vested
in the number of shares of Restricted Stock as provided in the Agreement between
the Company and Grantee dated as of April 23, 2001 (the "Chairman Agreement")
(such number of shares referred to herein as the "Vested Stock") on the
corresponding date set forth in the Chairman Agreement (such date referred to
herein as the "Vested Date"); provided that, as of the Vested Date, there has
been no prior termination of Grantee's service as Chairman of the Company's
Board of Directors that, under the terms of the Chairman Agreement, would
preclude vesting of all or any part of the Restricted Stock.

         SECTION 3.        DISTRIBUTION OF VESTED STOCK. Subject to the terms of
the Chairman Agreement, shares of Vested Stock will be distributed to the
Grantee as soon as practicable after the Vested Date.

         SECTION 4.        VOTING RIGHTS AND DIVIDENDS. Prior to the
distribution of the Restricted Stock, certificates representing shares of the
Restricted Stock will bear an appropriate legend in accordance with Section
10(b) of the Plan and will be held by the Company, as escrow agent, in the name
of the Grantee. The Company will take such action as is necessary and
appropriate to enable the Grantee to vote the Restricted Stock and receive
dividends thereon.

         SECTION 5.        GOVERNING PROVISIONS. This Agreement is made under
and subject to the provisions of the Plan, and all of the provisions of the Plan
are also provisions of this Agreement. Capitalized terms used but not defined
herein shall have the same meanings ascribed to such terms in the Plan. If there
is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. If there is a
difference or conflict between the provisions of this Agreement and/or the
provisions of the Plan and the provisions of the Chairman Agreement, the
provisions of the Chairman Agreement will govern. By signing this Agreement, the
Grantee confirms that he has received a copy of the Plan.

                                     B-1 1

<PAGE>   17

         SECTION 6.        MISCELLANEOUS.

                  6.1      Entire Agreement. This Agreement, the Chairman
         Agreement, and the Plan contain the entire understanding and agreement
         between the Company and the Grantee concerning the Restricted Stock
         granted hereby and supersede any prior or contemporaneous negotiations
         and understandings. The Company and the Grantee have made no promises,
         agreements, conditions, or understandings relating to the Restricted
         Stock, either orally or in writing, that are not included in this
         Agreement, the Plan, or the Chairman Agreement.

                  6.2      Future Service. None of the provisions of this
         Agreement or the Plan will interfere with or limit the right of the
         Company to terminate the Grantee's service as Chairman pursuant to the
         terms of the Chairman Agreement.

                  6.3      Captions. The captions and section numbers appearing
         in this Agreement are inserted only as a matter of convenience. They do
         not define, limit, construe, or describe the scope or intent of the
         provisions of this Agreement.

                  6.4      Counterparts. This Agreement may be executed in
         counterparts, each of which when signed by the Company and the Grantee
         will be deemed an original and all of which together will be deemed the
         same agreement.

                  6.5      Notice. Any notice or communication having to do with
         this Agreement must be given by personal delivery or by certified mail,
         return receipt requested, addressed, if to the Company, to the
         principal office of the Company and, if to the Grantee, to the
         Grantee's last known address on the personnel records of the Company.

                  6.6      Amendment. This Agreement may be amended by the
         Company, provided that unless the Grantee consents in writing, the
         Company cannot amend this Agreement if the amendment will materially
         change or impair the Grantee's rights under this Agreement and such
         change is not to the Grantee's benefit. Nevertheless, the Committee
         shall have the authority to cancel all or any portion of any
         outstanding restrictions prior to the Vested Date with respect to any
         or all of the shares of the Restricted Stock awarded on such terms and
         conditions as the Committee shall deem appropriate.

                  6.7      Succession and Transfer. Each and all of the
         provisions of this Agreement are binding upon and inure to the benefit
         of the Company and the Grantee and their heirs, successors, and
         assigns. However, neither the Restricted Stock nor this Agreement is
         transferable prior to the Vested Date other than by will or by the laws
         of descent and distribution.

                  6.8      Governing Law. This Agreement shall be governed and
         construed exclusively in accordance with the law of the State of
         Delaware applicable to agreements to be performed in the State of
         Delaware to the extent it may apply.

                                     B-1 2

<PAGE>   18

         IN WITNESS WHEREOF, the Company and the Grantee have executed this
Agreement to be effective as of _____________, 2001.

GRANTEE:                               GAYLORD ENTERTAINMENT COMPANY

                                       By:
-------------------------------           --------------------------------------
Michael D. Rose                           Rod Connor, Senior Vice President and
                                          Chief Administrative Officer

                                     B-1 3

<PAGE>   19

                                   EXHIBIT B-2

                      CONTINGENT RESTRICTED STOCK AGREEMENT
                              (PERFORMANCE SHARES)

                          GAYLORD ENTERTAINMENT COMPANY
                  1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

         This CONTINGENT RESTRICTED STOCK AGREEMENT (the "Agreement") is by and
between Gaylord Entertainment Company, a Delaware corporation (the "Company"),
and Michael D. Rose, (the "Grantee"), pursuant to the Company's 1997 Omnibus
Stock Option and Incentive Plan (the "Plan").

         SECTION 1.        CONTINGENT RESTRICTED STOCK AWARD. Upon the
occurrence of the earlier of: (i) the Company's Common Stock maintaining an
average closing price of $32 or higher for a period of 30 consecutive trading
days or (ii) the expiration of the Initial Term of the Agreement, dated as of
April 23, 2001, by and between the Company and Grantee (the "Chairman
Agreement") so long as the Grantee has continuously served as Chairman
throughout the Initial Term, the Grantee shall be awarded the right to receive
20,000 shares (the "Restricted Stock") of the Company's Common Stock, Par Value
$ .01 per share (the "Common Stock"), subject to the terms and conditions of the
Chairman Agreement, this Agreement and the Plan.

         SECTION 2.        VESTING OF THE AWARD. The Grantee shall become vested
in the number of shares of Restricted Stock as provided in the Chairman
Agreement (such number of shares referred to herein as the "Vested Stock") on
the corresponding date set forth in the Chairman Agreement (such date referred
to herein as the "Vested Date"); provided that, as of the Vested Date, there has
been no prior termination of Grantee's service as Chairman of the Company's
Board of Directors that, under the terms of the Chairman Agreement, would
preclude vesting of all or any part of the Restricted Stock.

         SECTION 3.        DISTRIBUTION  OF  VESTED  STOCK.  Subject  to the
terms of the Chairman Agreement, shares of Vested Stock will be distributed to
the Grantee as soon as practicable after the Vested Date.

         SECTION 4.        VOTING RIGHTS AND DIVIDENDS. Prior to the
distribution of the Restricted Stock, certificates representing shares of the
Restricted Stock will bear an appropriate legend in accordance with Section
10(b) of the Plan and will be held by the Company, as escrow agent, in the name
of the Grantee. The Company will take such action as is necessary and
appropriate to enable the Grantee to vote the Restricted Stock and receive
dividends thereon.

         SECTION 5.        GOVERNING PROVISIONS. This Agreement is made under
and subject to the provisions of the Plan, and all of the provisions of the Plan
are also provisions of this Agreement. Capitalized terms used but not defined
herein shall have the same meanings ascribed to such terms in the Plan. If there
is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. If there is a
difference or conflict between the provisions of this Agreement and/or the
provisions of the Plan and the provisions of the Chairman Agreement, the
provisions of the

                                     B-2 1
<PAGE>   20

Chairman Agreement will govern. By signing this Agreement, the Grantee confirms
that he has received a copy of the Plan.

         SECTION 6.        MISCELLANEOUS.

                  6.1      Entire Agreement. This Agreement, the Chairman
         Agreement, and the Plan contain the entire understanding and agreement
         between the Company and the Grantee concerning the Restricted Stock
         granted hereby and supersede any prior or contemporaneous negotiations
         and understandings. The Company and the Grantee have made no promises,
         agreements, conditions, or understandings relating to the Restricted
         Stock, either orally or in writing, that are not included in this
         Agreement, the Plan, or the Chairman Agreement.

                  6.2      Future Service. None of the provisions of this
         Agreement or the Plan will interfere with or limit the right of the
         Company to terminate the Grantee's service as Chairman pursuant to the
         terms of the Chairman Agreement.

                  6.3      Captions. The captions and section numbers appearing
         in this Agreement are inserted only as a matter of convenience. They do
         not define, limit, construe, or describe the scope or intent of the
         provisions of this Agreement.

                  6.4      Counterparts. This Agreement may be executed in
         counterparts, each of which when signed by the Company and the Grantee
         will be deemed an original and all of which together will be deemed the
         same agreement.

                  6.5      Notice. Any notice or communication having to do with
         this Agreement must be given by personal delivery or by certified mail,
         return receipt requested, addressed, if to the Company, to the
         principal office of the Company and, if to the Grantee, to the
         Grantee's last known address on the personnel records of the Company.

                  6.6      Amendment. This Agreement may be amended by the
         Company, provided that unless the Grantee consents in writing, the
         Company cannot amend this Agreement if the amendment will materially
         change or impair the Grantee's rights under this Agreement and such
         change is not to the Grantee's benefit. Nevertheless, the Committee
         shall have the authority to cancel all or any portion of any
         outstanding restrictions prior to the Vested Date with respect to any
         or all of the shares of the Restricted Stock awarded on such terms and
         conditions as the Committee shall deem appropriate.

                  6.7      Succession and Transfer. Each and all of the
         provisions of this Agreement are binding upon and inure to the benefit
         of the Company and the Grantee and their heirs, successors, and
         assigns. However, neither the Restricted Stock nor this Agreement is
         transferable prior to the Vested Date other than by will or by the laws
         of descent and distribution.

                  6.8      Governing Law. This Agreement shall be governed and
         construed exclusively in accordance with the law of the State of
         Delaware applicable to agreements to be performed in the State of
         Delaware to the extent it may apply.

                                     B-2 2

<PAGE>   21

         IN WITNESS WHEREOF, the Company and the Grantee have executed this
Agreement to be effective as of _____________, 2001.

GRANTEE:                               GAYLORD ENTERTAINMENT COMPANY

                                       By:
----------------------------              --------------------------------------
Michael D. Rose                           Rod Connor, Senior Vice President and
                                          Chief Administrative Officer

                                     B-2 3<PAGE>   1
                                                                    EXHIBIT 10.1

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                                  DIVINE, INC.,

                             DES ACQUISITION COMPANY

                                       AND

                           ESHARE COMMUNICATIONS, INC.

                                  JULY 8, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>
ARTICLE I    The Merger; Effective Time; Closing.............................1
     1.1     The Merger......................................................1
     1.2     Effective Time..................................................2
     1.3     Closing.........................................................2
     1.4     Effect of the Merger............................................2

ARTICLE II   Certificate of Incorporation and Bylaws of
                  the Surviving Corporation..................................2
     2.1     Certificate of Incorporation; Name..............................2
     2.2     Bylaws .........................................................2

ARTICLE III  Directors and Officers of the Surviving Corporation.............2
     3.1     Directors.......................................................2
     3.2     Officers........................................................3

ARTICLE IV   Merger Consideration; Conversion or Cancellation of Shares
                  in the Merger..............................................3
     4.1     Share Consideration for the Merger; Conversion or Cancellation
                  of Shares in the Merger....................................3
     4.2     Payment for Shares in the Merger................................5
     4.3     Cash For Fractional Parent Shares...............................6
     4.4     Transfer of Shares after the Effective Time.....................6
     4.5     Lost, Stolen or Destroyed Certificates..........................7

ARTICLE V    Representations and Warranties..................................7
     5.1     Representations and Warranties of Parent and Merger Sub.........7
     5.2     Representations and Warranties of the Company..................17

ARTICLE VI   Additional Covenants and Agreements............................35
     6.1     Conduct of Business of the Company.............................35
     6.2     No Solicitation................................................38
     6.3     Meeting of Shareholders........................................40
     6.4     Registration Statement.........................................40
     6.5     Reasonable Efforts.............................................41
     6.6     Access to Information..........................................41
     6.7     Publicity......................................................42
     6.8     Affiliates of the Company and Parent...........................42
     6.9     Maintenance of Insurance.......................................42
     6.10    Representations and Warranties.................................42
     6.11    Filings; Other Action..........................................42
     6.12    Tax-Free Reorganization Treatment..............................43
     6.13    Company Employee Stock Purchase Plan...........................43
     6.14    Nasdaq Listing.................................................43
     6.15    Indemnification................................................43
     6.16    Auditors' Letters..............................................44

</TABLE>

<PAGE>   3
<Table>
<S>                                                                         <C>
     6.17    Sale of Company Software Products..............................44
     6.18    Issuance of Option Grants......................................44
     6.19    Self Tender Offer Prohibition..................................44

ARTICLE VII  Conditions.....................................................44
     7.1     Conditions to Each Party's Obligations.........................44
     7.2     Conditions to the Obligations of the Company...................45
     7.3     Conditions to the Obligations of Parent........................46

ARTICLE VIII Termination....................................................47
     8.1     Termination by Mutual Consent..................................47
     8.2     Termination by either the Company or Parent....................47
     8.3     Termination by the Company.....................................47
     8.4     Termination by Parent..........................................48
     8.5     Effect of Termination; Termination Fee.........................49

ARTICLE IX   Miscellaneous and General......................................50
     9.1     Payment of Expenses............................................50
     9.2     Non-Survival of Representations and Warranties.................50
     9.3     Modification or Amendment......................................50
     9.4     Waiver of Conditions...........................................50
     9.5     Counterparts...................................................51
     9.6     Governing Law; Jurisdiction....................................51
     9.7     Notices........................................................51
     9.8     Entire Agreement; Assignment...................................52
     9.9     Parties in Interest............................................52
     9.10    Certain Definitions............................................52
     9.11    Severability...................................................54
     9.12    Specific Performance...........................................54
     9.13    Recovery of Attorney's Fees....................................54
     9.14    Captions.......................................................54
     9.15    No Strict Construction.........................................54
</TABLE>

                                       ii
<PAGE>   4

                             TABLE OF DEFINED TERMS

<TABLE>
<S>                                                             <C>
Agreement..........................................................Introduction
Authorized Representatives..........................................Section 6.7
Average Market Value............................................Section 9.10(a)
Cash Adjustment Payment..........................................Section 4.1(e)
Certificates of Merger..............................................Section 1.2
Certificates.....................................................Section 4.2(b)
Closing.............................................................Section 1.3
Closing Date........................................................Section 1.3
Code...................................................................Recitals
Commercial Software..............................................Section 5.2(o)
Company............................................................Introduction
Company Acquisition Proposal.....................................Section 6.3(a)
Company Affiliate...................................................Section 6.8
Company Affiliate Letter............................................Section 6.8
Company Contract.................................................Section 5.2(p)
Company Disclosure Schedule.........................................Section 5.2
Company Embedded Products........................................Section 5.2(o)
Company Financial Statements.................................Section 5.2(h)(ii)
Company Insurance Policies.......................................Section 5.2(u)
Company Intellectual Property Rights.............................Section 5.2(o)
Company International Employee Plans.............................Section 5.2(n)
Company Key Employees............................................Section 5.2(p)
Company Option...................................................Section 4.1(c)
Company Option Plans.............................................Section 5.2(b)
Company Plan Affiliate........................................Section 5.2(n)(i)
Company Proprietary Rights.......................................Section 5.2(o)
Company Scheduled Plans.......................................Section 5.2(n)(i)
Company SEC Reports...........................................Section 5.2(h)(i)
Company Shares...................................................Section 4.1(a)
Company Software.................................................Section 5.2(o)
Company Software Authors.........................................Section 5.2(o)
Company Shareholders Meeting........................................Section 6.3
Company Superior Proposal........................................Section 6.3(a)
Confidentiality Agreement...........................................Section 6.7
DGCL................................................................Section 1.1
Effective Time......................................................Section 1.2
Encumbrance.....................................................Section 9.10(b)
Environmental Costs and Liabilities..............................Section 5.2(s)
Environmental Laws...............................................Section 5.2(s)
ERISA...........................................................Section 9.10(c)
ESPP.............................................................Section 5.2(b)
Exchange Act.....................................................Section 5.1(g)
Exchange Agent...................................................Section 4.2(a)
</TABLE>

                                       iii
<PAGE>   5
<TABLE>
<S>                                                             <C>
Exchange Ratio...................................................Section 4.1(a)
Fractional Securities Fund..........................................Section 4.3
GBCC................................................................Section 1.1
Governmental Entity.............................................Section 9.10(d)
Hazardous Material...............................................Section 5.2(s)
HSR Act..........................................................Section 5.1(g)
Indemnified Personnel..............................................Section 6.16
Knowledge.......................................................Section 9.10(e)
Material Adverse Effect.........................................Section 9.10(f)
Merger.................................................................Recitals
Merger Sub.........................................................Introduction
NNM.................................................................Section 4.3
Parent.............................................................Introduction
Parent Contract..................................................Section 5.1(p)
Parent Common Stock..............................................Section 5.1(c)
Parent Disclosure Schedule..........................................Section 5.1
Parent Embedded Products.........................................Section 5.1(o)
Parent Financial Statements..................................Section 5.1(i)(ii)
Parent Insurance Policies........................................Section 5.2(t)
Parent Plan Affiliate.........................................Section 5.1(n)(i)
Parent Proprietary Rights........................................Section 5.1(o)
Parent Scheduled Plans........................................Section 5.1(n)(i)
Parent SEC Reports............................................Section 5.1(i)(i)
Parent Shares....................................................Section 4.1(a)
Parent Stockholders Meeting......................................Section 5.1(l)
Parties............................................................Introduction
Person..........................................................Section 9.10(h)
Post-Merger Exercise Price.......................................Section 4.1(c)
Proxy Statement.....................................................Section 6.5
Restraints.......................................................Section 7.1(c)
Returns.........................................................Section 9.10(i)
S-4 Registration Statement..........................................Section 6.5
SEC...........................................................Section 5.1(i)(i)
Securities Act...................................................Section 5.1(g)
Share Consideration..............................................Section 4.2(a)
Significant Tax Agreement.......................................Section 9.10(j)
Stock Merger Exchange Fund.......................................Section 4.2(a)
Software Distribution Agreement....................................Section 6.17
Subsidiary......................................................Section 9.10(k)
Substitute Option................................................Section 4.1(c)
Surviving Corporation...............................................Section 1.1
Szlam..................................................................Recitals
Tax.............................................................Section 9.10(l)
Taxes...........................................................Section 9.10(l)
Termination Fee..................................................Section 8.5(c)
</TABLE>

                                       iv
<PAGE>   6

<TABLE>
<S>                                                                 <C>
Transaction Expenses................................................Section 9.1
Voting Agreement.......................................................Recitals
</TABLE>

                                       v
<PAGE>   7

                                    EXHIBITS

<TABLE>
<S>                                                                   <C>
Form of Voting Agreement..............................................Exhibit A
Form of Company Affiliate Letter......................................Exhibit B
Form of Software Distribution Agreement...............................Exhibit C
</TABLE>

                                       vi

<PAGE>   8

                          AGREEMENT AND PLAN OF MERGER

         THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of July 8, 2001, by and among divine, inc., a Delaware
corporation ("Parent"), DES Acquisition Company, a Delaware corporation and a
direct wholly-owned Subsidiary of Parent ("Merger Sub"), and eshare
communications, Inc., a Georgia corporation (the "Company"). Parent, Merger Sub
and the Company are referred to collectively herein as the "Parties."
Capitalized terms used herein are defined as referenced in the Table of Defined
Terms contained herein.

                                    RECITALS

         WHEREAS, the Board of Directors of each of Parent, Merger Sub and the
Company have determined that it is in the best interests of each corporation and
their respective stockholders and shareholders, as the case may be, that the
Company and Parent enter into a business combination through the merger of the
Company with and into the Merger Sub (the "Merger") and, in furtherance thereof,
have approved the Merger and declared the Merger advisable to its respective
stockholders or shareholders, as applicable;

         WHEREAS, pursuant to the Merger, the outstanding shares of common stock
of the Company shall be converted into shares of common stock of Parent at the
rate set forth herein;

         WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"); and

         WHEREAS, concurrently with the execution hereof, Szlam Partners, L.P.
("Szlam") is entering into a voting agreement in the form attached as EXHIBIT A
hereto (the "Voting Agreement");

         NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, the Parties hereby agree
as follows:

                                   ARTICLE I

                       THE MERGER; EFFECTIVE TIME; CLOSING

         1.1      THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL") and the Georgia Business Corporation Code (the "GBCC"), at the
Effective Time, the Company shall be merged with and into Merger Sub, the
separate corporate existence of the Company shall thereupon cease, and Merger
Sub shall be the successor or surviving corporation and shall continue its
existence under the laws of the State of Delaware. Merger Sub, as the surviving
corporation after the consummation of the Merger, is sometimes hereinafter
referred to as the "Surviving Corporation."

                                       1
<PAGE>   9

         1.2      EFFECTIVE TIME. Subject to the provisions of this Agreement,
the Parties shall cause the Merger to be consummated by filing duly executed
certificates of merger of Merger Sub and the Company (the "Certificates of
Merger") with the Office of the Secretary of State of the States of Delaware and
Georgia, as the case may be, in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL and the GBCC as applicable,
as soon as practicable on the Closing Date, and shall take all other action
required by law to effect the Merger. The Merger shall become effective upon
such filing or at such time thereafter as is provided in the Certificates of
Merger (the "Effective Time").

         1.3      CLOSING. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
Article VIII, the closing of the Merger (the "Closing") shall take place at
10:00 a.m., local time, at the offices of counsel for Parent, on the second
business day after all of the conditions to the obligations of the Parties to
consummate the Merger as set forth in Article VII have been satisfied or waived,
or such other date, time or place as is agreed to in writing by the Parties (the
"Closing Date").

         1.4      EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
the DGCL and the GBCC. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all property, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.

                                   ARTICLE II

      CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATION

         2.1      CERTIFICATE OF INCORPORATION; NAME. At the Effective Time, the
Certificate of Incorporation of Merger Sub immediately prior to the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation,
until thereafter amended as provided therein and by applicable law, and the name
of the Surviving Corporation shall be the Company's name.

         2.2      BYLAWS. At the Effective Time, the by-laws of Merger Sub in
effect immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation, until thereafter amended as provided therein and by
applicable law.

                                  ARTICLE III

               DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION

         3.1      DIRECTORS. The directors of Merger Sub shall be the initial
directors of the Surviving Corporation, until their respective successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and by-laws.

                                       2
<PAGE>   10

         3.2      OFFICERS. The officers of Merger Sub shall be the initial
officers of the Surviving Corporation, until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and by-laws.

                                   ARTICLE IV

    MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF SHARES IN THE MERGER

         4.1      SHARE CONSIDERATION FOR THE MERGER; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER. At the Effective Time, the manner of converting or
canceling shares of the Company and Parent shall be as follows:

                  (a)      CONVERSION OF COMPANY STOCK. Subject to adjustment,
         if applicable, pursuant to Sections 4.1(e) and 4.1(f) hereof, and
         subject to the provisions of Section 4.3 hereof, each share of common
         stock, no par value ("Company Shares"), of the Company issued and
         outstanding immediately prior to the Effective Time (excluding any
         Company Shares described in Section 4.1(d)), shall, by virtue of the
         Merger and without any action on the part of the holder thereof, be
         converted automatically into the right to receive 1.30 shares of Class
         A common stock, $0.001 par value, of Parent ("Parent Shares"). All
         Company Shares to be converted into Parent Shares pursuant to this
         Section 4.1(a) shall, by virtue of the Merger and without any action on
         the part of the holders thereof, cease to be outstanding, be canceled
         and cease to exist, and each holder of a certificate representing any
         such Company Shares shall thereafter cease to have any rights with
         respect to such Company Shares, except the right to receive for each of
         the Company Shares, upon the surrender of such certificate in
         accordance with Section 4.2, the number of Parent Shares specified
         above and cash in lieu of fractional shares. The ratio of Company
         Shares per share of Parent Shares, as adjusted from time to time
         pursuant to Sections 4.1(e) and 4.1(f) hereof, is sometimes hereinafter
         referred to as the "Exchange Ratio."

                  (b)      STOCK OF MERGER SUB. Each stock certificate
         representing shares of Merger Sub issued and outstanding immediately
         prior to the Effective Time shall continue to represent ownership of
         such shares of capital stock of the Surviving Corporation.

                  (c)      OUTSTANDING OPTIONS. Prior to the Effective Time,
         each option to purchase Company Shares (each, a "Company Option") that
         is outstanding and unexercised pursuant to the Company Option Plans in
         effect on the date hereof shall (i) be terminated if the result of
         dividing (A) the exercise price of such Company Option by (B) the
         Exchange Ratio and rounding the result to the nearest tenth of one cent
         (hereinafter, the "Post-Merger Exercise Price"), is greater than the
         closing sale price of the Parent Shares on the trading day immediately
         preceding the Effective Time, and (ii) if the Post-Merger Exercise
         Price of such Company Option is less than or equal to the closing sale
         price of the Parent Shares on the trading day immediately preceding the
         Effective Time, become and represent an option to purchase (a
         "Substitute Option") the number of Parent Shares (rounded to the
         nearest full share) determined by multiplying (X) the number of Company
         Shares subject to such Company Option immediately prior to the
         Effective

                                       3
<PAGE>   11

         Time by (Y) the Exchange Ratio, at an exercise price per share of
         Parent Shares equal to the Post-Merger Exercise Price. It is the intent
         of the Parties that the Substitute Options shall qualify following the
         Effective Time as "incentive stock options" as defined in Section 422
         of the Code to the extent that the related Company Options qualified as
         incentive stock options immediately prior to the Effective Time, and
         the provisions of this Section 4.1(c) shall be applied consistent with
         such intent. Parent shall pay cash to holders of Company Options in
         lieu of issuing fractional Parent Shares upon the exercise of
         Substitute Options for Parent Shares. After the Effective Time, except
         as provided above in this Section 4.1(c), each Substitute Option shall
         be exercisable upon the same terms and conditions as were applicable
         under the related Company Option immediately prior to the Effective
         Time after giving effect to any provision contained in such Company
         Option providing for accelerated vesting as a result of this Agreement.
         The Company agrees that, after the date of this Agreement, it will not
         grant any stock appreciation rights or limited stock appreciation
         rights and will not permit cash payments to holders of Company Options
         in lieu of the substitution therefor of Substitute Options, as
         described in this Section 4.1(c). Parent will reserve a sufficient
         number of Parent Shares (i) for issuance under this Section 4.1(c) and
         (ii) for issuance under Section 6.18.

                  (d)      CANCELLATION OF PARENT OWNED AND TREASURY STOCK. All
         of the Company Shares that are owned by Parent, any direct or indirect
         wholly-owned Subsidiary of Parent or by the Company as treasury stock
         shall automatically cease to be outstanding, shall be canceled and
         shall cease to exist and no Parent Shares shall be delivered in
         exchange therefor.

                  (e)      ADJUSTMENT TO EXCHANGE RATIO. If the Average Market
         Value of Parent Shares is $2.82 or greater, then the Exchange Ratio
         (prior to any adjustment pursuant to Section 4.1(f), if applicable)
         shall be adjusted to an amount equal to $3.653 divided by the Average
         Market Value of Parent Shares. If the Average Market Value of Parent
         Shares is $2.39 or less, then the Exchange Ratio (prior to any
         adjustment pursuant to Section 4.1(f), if applicable) shall be adjusted
         to an amount equal to $3.12 divided by the greater of (x) the Average
         Market Value of Parent Shares or (y) $1.00. If the number of Parent
         Shares to be issued in the Merger pursuant to the adjustment set forth
         in the foregoing sentence exceeds 28,546,506 Parent Shares (prior to
         any adjustment pursuant to Section 4.1(f), if applicable), then Parent
         may elect to pay cash in lieu of all or any portion of the Parent
         Shares otherwise issuable to Company shareholders in the Merger in
         excess of 28,546,506 Parent Shares (as adjusted pursuant to Section
         4.1(f), if applicable), in an amount per share equal to the Average
         Market Value of Parent Shares (the "Cash Adjustment Payment"), provided
         that such election is made prior to the date on which the Proxy
         Statement with respect to the Company Shareholders Meeting is first
         mailed to the Company's shareholders, or on a later date so long as the
         timing of such election shall not cause the Closing Date contemplated
         in the Proxy Statement with respect to the Company Shareholders Meeting
         to be delayed.

                  (f)      ADJUSTMENT FOR ORGANIC CHANGES. In the event of any
         reclassification, stock split or stock dividend with respect to Parent
         Shares, any change or conversion of Parent

                                       4
<PAGE>   12

         Shares into other securities or any other dividend or distribution in
         Parent Shares with respect to outstanding Parent Shares (or if a record
         date with respect to any of the foregoing should occur) prior to the
         Effective Time, appropriate and proportionate adjustments, if any,
         shall be made to the Exchange Ratio, and all references to the Exchange
         Ratio in this Agreement shall be deemed to be to the Exchange Ratio as
         so adjusted.

         4.2      PAYMENT FOR SHARES IN THE MERGER. The manner of making payment
for Shares in the Merger shall be as follows:

                  (a)      EXCHANGE AGENT. On or prior to the Closing Date,
         Parent shall make available to Computershare Investor Services, LLC, or
         other entity mutually agreed upon by the Parties (the "Exchange
         Agent"), for the benefit of the holders of Company Shares, a sufficient
         number of certificates representing the Parent Shares required to
         effect the delivery of the aggregate consideration in Parent Shares,
         cash for the Fractional Securities Fund and the Cash Adjustment
         Payment, if any, required to be issued pursuant to Section 4.1
         (collectively, the "Share Consideration" and the certificates
         representing the Parent Shares comprising such aggregate Share
         Consideration being referred to hereinafter as the "Stock Merger
         Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable
         instructions, deliver the Share Consideration out of the Stock Merger
         Exchange Fund and the Fractional Securities Fund. The Stock Merger
         Exchange Fund and the Fractional Securities Fund shall not be used for
         any purpose other than as set forth in this Agreement.

                  (b)      EXCHANGE PROCEDURES. Promptly after the Effective
         Time, the Exchange Agent shall mail to each holder of record of a
         certificate or certificates that immediately prior to the Effective
         Time represented outstanding Company Shares (the "Certificates") (i) a
         form of letter of transmittal, in a form reasonably satisfactory to the
         Parties (which shall specify that delivery shall be effected, and risk
         of loss and title to the Certificates shall pass, only upon proper
         delivery of the Certificates to the Exchange Agent) and (ii)
         instructions for use in effecting the surrender of the Certificates for
         payment therefor. Subject to Section 4.5, upon surrender of
         Certificates for cancellation to the Exchange Agent, together with such
         letter of transmittal duly executed and any other required documents,
         the holder of such Certificates shall be entitled to receive for each
         of the Company Shares represented by such Certificates the Share
         Consideration, without interest, allocable to such Certificates and the
         Certificates so surrendered shall forthwith be canceled. Until so
         surrendered, such Certificates shall represent solely the right to
         receive the Share Consideration allocable to such Certificates.

                  (c)      DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
                           dividends or other distributions that are declared
         after the Effective Time on Parent Shares and payable to the holders of
         record thereof after the Effective Time will be paid to Persons
         entitled by reason of the Merger to receive Parent Shares until such
         Persons surrender their Certificates as provided in Section 4.2(b)
         above. Upon such surrender, there shall be paid to the Person in whose
         name the Parent Shares are issued any dividends or other

                                       5
<PAGE>   13
         distributions having a record date after the Effective Time and payable
         with respect to such Parent Shares between the Effective Time and the
         time of such surrender. After such surrender there shall be paid to the
         Person in whose name the Parent Shares are issued any dividends or
         other distributions on such Parent Shares which shall have a record
         date after the date of such surrender. In no event shall the Persons
         entitled to receive such dividends or other distributions be entitled
         to receive interest on such dividends or other distributions.

                  (d)      TRANSFERS OF OWNERSHIP. If any certificate
         representing Parent Shares is to be issued in a name other than that in
         which the Certificate surrendered in exchange therefor is registered,
         it shall be a condition of such exchange that the Certificate so
         surrendered shall be properly endorsed and otherwise in proper form for
         transfer and that the Person requesting such exchange shall pay to the
         Exchange Agent any transfer or other taxes required by reason of the
         issuance of certificates for such Parent Shares in a name other than
         that of the registered holder of the Certificate surrendered, or shall
         establish to the satisfaction of the Exchange Agent that such tax has
         been paid or is not applicable.

                  (e)      NO LIABILITY. Neither the Exchange Agent nor any of
         the Parties shall be liable to a holder of Company Shares for any
         Parent Shares, Cash Adjustment Payment, if any, cash in lieu of
         fractional Parent Shares or any dividend to which the holders thereof
         are entitled, that are delivered to a public official pursuant to
         applicable escheat law. The Exchange Agent shall not be entitled to
         vote or exercise any rights of ownership with respect to the Parent
         Shares held by it from time to time hereunder, except that it shall
         receive and hold all dividends or other distributions paid or
         distributed with respect to such Parent Shares for the account of the
         Persons entitled thereto.

                  (f)      TERMINATION OF FUNDS. Subject to applicable law, any
         portion of the Stock Merger Exchange Fund, the Cash Adjustment Payment,
         if any, and the Fractional Securities Fund that remains unclaimed by
         the former shareholders of the Company for one (1) year after the
         Effective Time shall be delivered to Parent, upon demand of Parent, and
         any former shareholder of the Company shall thereafter look only to
         Parent for payment of their applicable claim for the Share
         Consideration for their Company Shares.

         4.3      CASH FOR FRACTIONAL PARENT SHARES. No fractional Parent Shares
shall be issued in the Merger. Each holder of Parent Shares shall be entitled to
receive in lieu of any fractional Parent Shares to which such holder otherwise
would have been entitled pursuant to Section 4.2 (after taking into account all
Parent Shares then held of record by such holder) a cash payment in an amount
equal to the product of (i) the fractional interest of a Parent Share to which
such holder otherwise would have been entitled and (ii) the closing sale price
of a Parent Share on the Nasdaq National Market ("NNM") on the trading day
immediately prior to the Effective Time (the cash comprising such aggregate
payments in lieu of fractional Parent Shares being hereinafter referred to as
the "Fractional Securities Fund").

         4.4      TRANSFER OF SHARES AFTER THE EFFECTIVE TIME. All Share
Consideration issued upon the surrender for exchange of Company Shares in
accordance with the terms hereof (including any cash paid in respect thereof)
shall be deemed to have been issued in full satisfaction of all

                                       6
<PAGE>   14

rights pertaining to such Company Shares, and no further registration of
transfers shall be made. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall be canceled
and exchanged as provided in this Article IV.

         4.5      LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates evidencing Company Shares shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed certificates, upon the making of an affidavit of that fact by the
holder thereof, such Parent Shares, cash for fractional shares, if any, and any
dividends or other distributions to which the holders thereof are entitled;
provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificates to deliver a customary bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
certificates alleged to have been lost, stolen or destroyed.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         5.1      REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Parent and Merger Sub hereby represent and warrant to the Company that the
statements contained in this Section 5.1 are true and correct, except to the
extent specifically set forth on the disclosure schedule delivered
contemporaneously with this Agreement by Parent to the Company (the "Parent
Disclosure Schedule"). The Parent Disclosure Schedule shall be arranged in
sections and paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 5.1, and the disclosure in any paragraph shall qualify
only the corresponding paragraph in this Section 5.1 or other paragraphs or
sections to which it is clearly apparent (from a plain reading of the
disclosure) that such disclosure relates.

                  (a)      CORPORATE ORGANIZATION AND QUALIFICATION. Except as
         set forth in Section 5.1(a) of the Parent Disclosure Schedule, each of
         Parent and each of its Subsidiaries is a corporation duly organized,
         validly existing and in good standing under the laws of its
         jurisdiction of incorporation and is qualified and in good standing as
         a foreign corporation in each jurisdiction where the properties owned,
         leased or operated, or the business conducted, by it require such
         qualification, except where failure to be so could not, individually or
         in the aggregate, reasonably be expected to have a Material Adverse
         Effect on Parent. Each of Parent and its Subsidiaries has all requisite
         power and authority (corporate or otherwise) to own its properties and
         to carry on its business as it is now being conducted.

                  (b)      OPERATIONS OF MERGER SUB. Merger Sub is a direct,
         wholly-owned Subsidiary of Parent, was formed solely for the purpose of
         engaging in the transactions contemplated hereby, has engaged in no
         other business activities and has conducted its operations only as
         contemplated hereby.

                                       7
<PAGE>   15

                  (c)      CAPITALIZATION. The authorized capital stock of
         Parent consists of (i) 2,500,000,000 shares of Class A common stock,
         $0.001 par value per share ("Parent Common Stock"), of which
         138,973,759 shares were issued and outstanding on May 31, 2001, (ii)
         100,000,000 shares of Class C common stock, $0.001 par value per share,
         of which 6,777,777 were issued and outstanding on the date hereof,
         50,000,000 shares of preferred stock, $0.001 par value per share,
         500,000 shares of which have been designated Series A Junior
         Participating Preferred Stock. No shares of Series A Junior
         Participating Preferred Stock are issued and outstanding as of the date
         hereof. All of the outstanding shares of capital stock of Parent have
         been duly authorized and validly issued and are fully paid and
         nonassessable. The authorized capital stock of Merger Sub consists of
         1,000 shares of common stock, $0.001 par value, 1,000 shares of which
         are issued and outstanding and held by Parent. Schedule 5.1(c) of the
         Parent Disclosure Schedule sets forth all rights with respect to
         registration of Parent Common Stock under the Securities Act,
         including, but not limited to, demand rights or piggy-back registration
         rights, granted by Parent since July 11, 2000 through the date hereof.

                  (d)      LISTINGS. Parent's securities are not listed, or
         quoted, for trading on any U.S. domestic or foreign securities
         exchange, other than the NNM.

                  (e)      AUTHORITY RELATIVE TO THIS AGREEMENT. The Board of
         Directors of Merger Sub has declared the Merger advisable, and Merger
         Sub has the requisite corporate power and authority to approve,
         authorize, execute and deliver this Agreement and to consummate the
         transactions contemplated hereby. The Board of Directors of Parent has
         declared the Merger and the related issuance of Parent Shares
         advisable, has duly and validly authorized this Agreement and the
         consummation by Parent of the transactions contemplated hereby and
         Parent has the requisite corporate power and authority to approve,
         authorize, execute and deliver this Agreement and to consummate the
         transactions contemplated hereby. No other corporate proceedings on the
         part of Parent are necessary to authorize this Agreement or to
         consummate the transactions contemplated hereby, other than the
         approval of this Agreement and the Merger by the stockholders of Parent
         in accordance with the DGCL, if necessary. This Agreement and the
         consummation by Parent and Merger Sub of the transactions contemplated
         hereby have been duly and validly authorized by the Boards of Directors
         of Parent and Merger Sub and by Parent as the sole Stockholder of
         Merger Sub. This Agreement has been duly and validly executed and
         delivered by Parent and Merger Sub and, assuming this Agreement
         constitutes the valid and binding agreement of the Company, constitutes
         the valid and binding agreement of Parent and Merger Sub, enforceable
         against Parent and Merger Sub in accordance with its terms, subject, as
         to enforceability, to bankruptcy, insolvency, reorganization and other
         laws of general applicability relating to or affecting creditors'
         rights and to general principles of equity.

                  (f)      PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS. Neither
         Parent nor any of its Subsidiaries is: (i) in violation of its
         Certificate of Incorporation, by-laws or similar documents; (ii) in
         default in the performance of any obligation, agreement or condition of
         any debt instrument which (with or without the passage of time or the
         giving of notice, or

                                       8
<PAGE>   16

         both) affords to any Person the right to accelerate any indebtedness or
         terminate any right; (iii) in default under or breach of (with or
         without the passage of time or the giving of notice) any other contract
         to which it is a party or by which it or its assets are bound; or (iv)
         in violation of any law, regulation, administrative order or judicial
         order, decree or judgment (domestic or foreign) applicable to it or its
         business or assets, except where any violation, default or breach under
         items (ii), (iii), or (iv) could not reasonably be expected to,
         individually or in the aggregate, have a Material Adverse Effect on
         Parent.

                  (g)      CONSENTS AND APPROVALS; NO VIOLATION. Neither the
         execution and delivery of this Agreement nor the consummation by Parent
         of the transactions contemplated hereby will (i) conflict with or
         result in any breach of any provision of the respective Certificate of
         Incorporation (or other similar documents) or by-laws (or other similar
         documents) of Parent or any of its Subsidiaries; (ii) require any
         consent, approval, authorization or permit of, or registration or
         filing with or notification to, any governmental or regulatory
         authority, in each case, by or on behalf of Parent or any of its
         Subsidiaries, except (A) in connection with the applicable
         requirements, if any, of the Hart-Scott-Rodino Antitrust Improvements
         Act of 1976, as amended (the "HSR Act"), (B) pursuant to the applicable
         requirements of the Securities Act of 1933, as amended, and the rules
         and regulations promulgated thereunder (the "Securities Act") and the
         Securities Exchange Act of 1934, as amended, and the rules and
         regulations promulgated thereunder (the "Exchange Act"), and the NNM,
         (C) the filing of the Certificates of Merger pursuant to the DGCL and
         the GBCC and appropriate documents with the relevant authorities of
         other states in which Parent is authorized to do business, (D) as may
         be required by any applicable state securities laws, (E) the consents,
         approvals, orders, authorizations, registrations, declarations and
         filings required under the antitrust or competition laws of foreign
         countries, or (F) where the failure to obtain such consent, approval,
         authorization or permit, or to make such registration, filing or
         notification, could not reasonably be expected to, individually or in
         the aggregate, have a Material Adverse Effect on Parent or adversely
         affect the ability of Parent to consummate the transactions
         contemplated hereby; (iii) result in a violation or breach of, or
         constitute (with or without notice or lapse of time or both) a default
         (or give rise to any right of termination, cancellation or acceleration
         or lien or other charge or encumbrance) under any of the terms,
         conditions or provisions of any indenture, note, license, lease,
         agreement or other instrument or obligation to which Parent or any of
         its Subsidiaries is a party or by which any of their assets may be
         bound, except for such violations, breaches and defaults (or rights of
         termination, cancellation or acceleration or lien or other charge or
         encumbrance) as to which requisite waivers or consents have been
         obtained or which, individually or in the aggregate, could not
         reasonably be expected to have a Material Adverse Effect on Parent or
         adversely affect the ability of Parent to consummate the transactions
         contemplated hereby; (iv) cause the suspension or revocation of any
         authorizations, consents, approvals or licenses currently in effect
         which, individually or in the aggregate, could reasonably be expected
         to have a Material Adverse Effect on Parent; or (v) assuming the
         consents, approvals, authorizations or permits and registrations,
         filings or notifications referred to in this Section 5.1(g) are duly
         and timely obtained or made, violate any order, writ, injunction,
         decree, statute, rule or regulation applicable to Parent or any of its

                                       9
<PAGE>   17

         Subsidiaries or to any of their respective assets, except for
         violations which, individually or in the aggregate, could not
         reasonably be expected to have a Material Adverse Effect on Parent or
         adversely affect the ability of Parent to consummate the transactions
         contemplated hereby.

                  (h)      LITIGATION. Except as set forth in the Parent SEC
         Reports filed prior to the date hereof or in Schedule 5.1(h) of the
         Parent Disclosure Schedule, there are no actions, suits, claims,
         investigations or proceedings pending or, to the Knowledge of Parent,
         threatened against Parent or any of its Subsidiaries that, individually
         or in the aggregate, could reasonably be expected to result in
         obligations or liabilities of Parent or any of its Subsidiaries that,
         individually or in the aggregate, could reasonably be expected to have
         a Material Adverse Effect on Parent or a Material Adverse Effect on the
         Parties' ability to consummate the transactions contemplated by this
         Agreement. Neither Parent nor any of its Subsidiaries is subject to any
         outstanding judgment, order, writ, injunction or decree which (i) has
         or may have the effect of prohibiting or impairing any business
         practice of Parent or any of its Subsidiaries, any acquisition of
         property (tangible or intangible) by Parent or any of its Subsidiaries,
         the conduct of the business by Parent or any of its Subsidiaries, or
         Parent's ability to perform its obligations under this Agreement or
         (ii), insofar as can be reasonably foreseen, individually or in the
         aggregate, could reasonably be expected to have a Material Adverse
         Effect on Parent.

                  (i)      SEC REPORTS; FINANCIAL STATEMENTS.

                           (i)      Parent has filed all forms, reports and
                  documents with the Securities and Exchange Commission (the
                  "SEC") required or deemed advisable to be filed by it pursuant
                  to the federal securities laws and the SEC rules and
                  regulations thereunder, all of which complied in all material
                  respects with all applicable requirements of the Securities
                  Act and the Exchange Act (collectively, the "Parent SEC
                  Reports"). None of the Parent SEC Reports, including, without
                  limitation, any financial statements or schedules included
                  therein, at the time filed (or if amended or superseded by a
                  filing prior to the date of this Agreement, then on the date
                  of such filing) contained any untrue statement of a material
                  fact or omitted to state a material fact required to be stated
                  therein or necessary in order to make the statements therein,
                  in light of the circumstances under which they were made, not
                  misleading. None of Parent's Subsidiaries is required to file
                  any forms, reports or other documents with the SEC.

                           (ii)     The consolidated balance sheets and the
                  related consolidated statements of income, stockholders'
                  equity (deficit) and cash flows (including the related notes
                  thereto) of Parent included in the Parent SEC Reports
                  (collectively, "Parent Financial Statements") comply as to
                  form in all material respects with applicable accounting
                  requirements and the published rules and regulations of the
                  SEC with respect thereto, have been prepared in accordance
                  with generally accepted accounting principles applied on a
                  basis consistent throughout the periods involved (except as
                  otherwise noted therein or, in the case of unaudited

                                       10
<PAGE>   18

                  interim financial statements, as may be permitted by the SEC
                  on Form 10-Q under the Exchange Act), and present fairly the
                  consolidated financial position of Parent and its consolidated
                  Subsidiaries as of their respective dates, and the
                  consolidated results of their operations and their cash flows
                  for the periods presented therein, except that the unaudited
                  interim financial statements do not include footnote
                  disclosure of the type associated with audited financial
                  statements and were or are subject to normal and recurring
                  year-end adjustments which were not or are not expected to be
                  material in amount.

                           (iii)    Since December 31, 2000, there has not been
                  any material change, by Parent or any of its Subsidiaries, in
                  accounting principles, methods or policies for financial
                  accounting purposes, except as required by concurrent changes
                  in generally accepted accounting principles, or as disclosed
                  in the Company SEC Reports. There are no material amendments
                  or modifications to agreements, documents or other instruments
                  which previously had been filed by Parent with the SEC
                  pursuant to the Securities Act or the Exchange Act, which have
                  not yet been filed with the SEC but which are required to be
                  filed.

                  (j)      NO LIABILITIES. Neither Parent nor any of its
         Subsidiaries has any material indebtedness, obligations or liabilities
         of any kind (whether accrued, absolute, contingent or otherwise, and
         whether due or to become due or asserted or unasserted), and, to the
         Knowledge of Parent, there is no reasonable basis for the assertion of
         any claim with respect to any indebtedness, obligation or liability of
         any nature against Parent or any of its Subsidiaries, except for
         indebtedness, obligations and liabilities (i) which are fully reflected
         in, reserved against or otherwise described in the most recent Parent
         Financial Statements, (ii) which have been incurred after the date of
         the most recent Parent Financial Statements in the ordinary course of
         business, consistent with past practice, (iii) which are obligations to
         perform under executory contracts in the ordinary course of business
         (none of which is a liability resulting from a breach of contract or
         warranty, tort, infringement or legal action), or (iv) which could not
         reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect on Parent.

                  (k)      ABSENCE OF CERTAIN CHANGES OF EVENTS. Except as
         described in the Parent SEC Reports or in Section 5.1(k) of the Parent
         Disclosure Schedule, since December 31, 2000, except with respect to
         the actions contemplated by this Agreement, there has not been (i) any
         Material Adverse Effect on Parent as of the date hereof; (ii) any
         damage, destruction or loss of any assets of Parent or any of its
         Subsidiaries (whether or not covered by insurance) that has had or
         could reasonably be expected to have, individually or in the aggregate,
         a Material Adverse Effect on Parent; (iii) any material change by
         Parent in its accounting methods, principles or practices; (iv) any
         material revaluation by Parent or any of its Subsidiaries of any of its
         assets, including, without limitation, writing down the value of
         capitalized software or inventory or deferred tax assets or writing off
         notes or accounts receivable other than in the ordinary course of
         business; (v) any labor dispute or charge of unfair labor practice
         (other than routine individual grievances), which, individually or in
         the aggregate, has had or could reasonably be expected to have

                                       11
<PAGE>   19
     a Material Adverse Effect on Parent, any activity or proceeding by a labor
     union or representative thereof to organize any employee of Parent or any
     of its Subsidiaries or any campaign being conducted to solicit
     authorization from employees to be represented by such labor union in each
     case which, individually or in the aggregate, has had or could reasonably
     be expected to have a Material Adverse Effect on Parent; or (vi) any waiver
     by Parent or any of its Subsidiaries of any rights of material value.

          (l)     S-4 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS.
     None of the information supplied or to be supplied by Parent for inclusion
     or incorporation by reference in the S-4 Registration Statement or the
     Proxy Statement will (i) in the case of the S-4 Registration Statement, at
     the time it becomes effective or at the Effective Time, contain any untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary in order to make the statements therein not
     misleading, or (ii) in the case of the Proxy Statement, at the time of the
     mailing of the Proxy Statement and at the time of the Company Shareholders
     Meeting and Parent Stockholders Meeting (if necessary) and at the Effective
     Time, contain any untrue statement of a material fact or omit 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 are
     made, not misleading. If at any time prior to the Effective Time any event
     with respect to Parent, Merger Sub or any of their respective affiliates,
     officers and directors or any of its Subsidiaries should occur which is
     required to be described in an amendment of, or a supplement to, the Proxy
     Statement or the S-4 Registration Statement, Parent shall promptly inform
     the Company, such event shall be so described, and such amendment or
     supplement shall be promptly filed with the SEC and, as required by law,
     disseminated to the shareholders of the Company. The S-4 Registration
     Statement will (with respect to Parent and Merger Sub) comply as to form in
     all material respects with the requirements of the Securities Act. The
     Proxy Statement will (with respect to Parent and Merger Sub) comply as to
     form in all material respects with the requirements of the Exchange Act.
     Notwithstanding the foregoing, Parent and Merger Sub make no representation
     or warranty with respect to any information supplied by, or related to, the
     Company or any of its affiliates or advisors which is contained in any of
     the foregoing documents.

         (m)      TAXES.

                  (i)      Except as set forth in Section 5.1(m) of the Parent
         Disclosure Schedule, Parent and each of its Subsidiaries has timely
         filed (after taking into account any extensions to file) all federal,
         state, local and foreign Returns required by applicable Tax law to be
         filed by Parent and each of its Subsidiaries. All Taxes owed by Parent
         or any of its Subsidiaries to a taxing authority, or for which Parent
         or any of its Subsidiaries is liable, whether to a taxing authority or
         to other Persons or entities under a Significant Tax Agreement, as of
         the date hereof, have been paid and, as of the Effective Time, will
         have been paid. All Returns were true and correct in all material
         respects when filed. Other than any reserve for deferred Taxes
         established to reflect timing differences between book and Tax
         treatment, Parent has made accruals for Taxes on the Parent Financial
         Statements

                                       12
<PAGE>   20

          which are adequate to cover any Tax liability of Parent and each of
          its Subsidiaries determined in accordance with generally accepted
          accounting principles through the date of the Parent Financial
          Statements.

                  (ii)     Parent and each of its Subsidiaries have withheld
         with respect to its employees, creditors, independent contractors,
         shareholders or other parties all federal and state income taxes, FICA,
         FUTA and other Taxes required to be withheld.

                  (iii)    Except as set forth in Section 5.1(m) of the Parent
         Disclosure Schedule, there is no Tax deficiency outstanding, assessed,
         or to Parent's Knowledge, proposed against Parent or any of its
         Subsidiaries. Neither Parent nor any of its Subsidiaries have executed
         or requested any waiver of any statute of limitations on or extending
         the period for the assessment or collection of any federal or material
         state Tax that is still in effect. There are no liens for Taxes on the
         assets of Parent or of any of its Subsidiaries other than with respect
         to Taxes not yet due and payable.

                  (iv)     Except as set forth in Section 5.1(m) of the Parent
          Disclosure Schedule, to Parent's Knowledge, no federal or state Tax
          audit or other examination of Parent or any of its Subsidiaries is
          presently in progress, nor has Parent or any of its Subsidiaries been
          notified either in writing or orally of any request for such federal
          or state Tax audit or other examination.

                  (v)      Neither Parent nor any of its Subsidiaries has filed
         any consent agreement under Section 341(f) of the Code or agreed to
         have Section 341(f)(2) of the Code apply to any disposition of a
         subsection (f) asset (as defined in Section 341(f)(4) of the Code)
         owned by Parent.

         (n)      EMPLOYEE BENEFITS.

                  (i)      For purposes hereof, the term "Parent Scheduled
         Plans" means each "employee pension benefit plan" (as such term is
         defined in Section 3(2) of ERISA), "employee welfare benefit plan" (as
         such term is defined in Section 3(1) of ERISA), material personnel or
         payroll policy (including vacation time, holiday pay, service awards,
         moving expense reimbursement programs and sick leave) or material
         fringe benefit, severance agreement or plan or any medical, hospital,
         dental, life or disability plan, pension benefit plan, excess benefit
         plan, bonus, stock option, stock purchase or other incentive plan
         (including any equity or equity-based plan), tuition reimbursement,
         automobile use, club membership, parental or family leave, top hat plan
         or deferred compensation plan, salary reduction agreement,
         change-of-control agreement, employment agreement, consulting
         agreement, or collective bargaining agreement, indemnification
         agreement, retainer agreement, or any other material benefit plan,
         policy, program, arrangement, agreement or contract, whether or not
         written or terminated, with respect to any employee, former employee,
         director, independent

                                       13
<PAGE>   21

          contractor, or any beneficiary or dependent thereof maintained,
          sponsored, adopted or administered by Parent or any current or former
          Parent Plan Affiliate or to which Parent or any current or former
          Parent Plan Affiliate has made contributions to, obligated itself or
          had any liability (whether accrued, absolute, contingent or otherwise,
          and whether due or to become due or asserted or unasserted) with
          respect thereto. A "Parent Plan Affiliate" is each entity which is, or
          has even been, treated as a single employer with Parent pursuant to
          Section 4001 of ERISA or Section 414 of the Code.

                  (ii)     Each Parent Scheduled Plan (1) has been in compliance
         and currently complies in form and in operation with all applicable
         requirements of ERISA and the Code, and any other legal requirements;
         (2) has been and is operated and administered in compliance with its
         terms (except as otherwise required by law); (3) has been and is
         operated in compliance with applicable legal requirements in such a
         manner as to qualify, where appropriate, for both Federal and state
         purposes, for income tax exclusions to its participants, tax-exempt
         income for its funding vehicle, and the allowance of deductions and
         credits with respect to contributions thereto.

                  (iii)    With respect to each Parent Scheduled Plan, there are
         no claims or other proceedings pending or, to the Knowledge of Parent,
         threatened with respect to the assets thereof (other than routine
         claims for benefits).

                  (iv)     With respect to each Parent Scheduled Plan, no
         Person: (1) has entered into any "prohibited transaction," as such term
         is defined in ERISA or the Code and the regulations, administrative
         rulings and case law thereunder that is not otherwise exempt under Code
         Section 4975 or ERISA Section 408 (or any administrative class
         exemption issued thereunder); (2) has breached a fiduciary obligation
         or violated Sections 402, 403, 405, 503, 510 or 511 of ERISA; (3) has
         any liability for any failure to act or comply in connection with the
         administration or investment of the assets of such plans; or (4)
         engaged in any transaction or otherwise acted with respect to such
         plans in such a manner which could subject Parent, or any fiduciary or
         plan administrator or any other Person dealing with any such plan, to
         liability under Section 409 or 502 of ERISA or Sections 4972 or 4976
         through 4980B of the Code.

                  (v)      With respect to any Parent Scheduled Plan which is a
         welfare plan as defined in Section 3(1) of ERISA; (1) each such welfare
         plan which is intended to meet the requirements for tax-favored
         treatment under Subchapter B of Chapter 1 of the Code materially meets
         such requirements; and (2) there is no disqualified benefit (as such
         term is defined in Code Section 4976(b)) which would subject Parent or
         any Parent Plan Affiliate to a tax under Code Section 4976(a).

                  (vi)     Neither Parent nor any current or former Parent Plan
         Affiliate has, or has ever had, any liability (including, but not
         limited to, any contingent

                                       14
<PAGE>   22
         liability) with respect to any plan subject to Title IV of ERISA or
         Section 412 of the Code or any plan maintained by any former Parent
         Plan Affiliate.

         (o)      PARENT INTANGIBLE PROPERTY.

                  (i)      Parent owns, or is licensed, or otherwise possesses
         legally enforceable rights, to use, sell or license, as applicable, all
         Proprietary Rights (excluding in each case Commercial Software) used,
         sold, distributed or licensed in or as a part of the business of Parent
         and its Subsidiaries as currently conducted ("Parent Proprietary
         Rights").

                  (ii)     Except as set forth in Section 5.1(o) of the Parent
         Disclosure Schedule, or except for Commercial Software and Parent
         Embedded Products for which Parent has valid non-exclusive licenses
         that are adequate for the conduct of Parent's business, Parent is the
         sole and exclusive owner of the Parent Proprietary Rights (free and
         clear of any Encumbrances), and has sole and exclusive rights to the
         use and distribution therefor or the material covered thereby in
         connection with the services or products in respect of which such
         Parent Proprietary Rights are currently being used, sold, licensed or
         distributed.

                  (iii)    Except as disclosed in Section 5.1(o) of the Parent
         Disclosure Schedule, (A) Parent has not materially infringed on any
         intellectual property rights of any third Persons and (B) none of the
         Parent Proprietary Rights materially infringes on any intellectual
         property rights of any third Persons.

                  (iv)     Except as disclosed in Section 5.1(o) of the Parent
         Disclosure Schedule, no actions, suits, claims, investigations or
         proceedings with respect to the Parent Proprietary Rights are pending
         or, to the Knowledge of Parent, threatened by any Person, (A) alleging
         that the manufacture, sale, licensing, distributing or use of any
         Parent Proprietary Rights as now manufactured, sold, licensed,
         distributed or used by Parent or any third party infringes on any
         intellectual property rights of any third party or Parent, (B) against
         the use or distribution by Parent or any third party of any technology,
         know-how or computer software used in the business of Parent and its
         Subsidiaries as currently conducted or (iii) challenging the ownership
         by Parent, validity or effectiveness of any such Parent Proprietary
         Rights.

                  (v)      For the purpose of this Section 5.1(o), the following
         terms have the following definitions: (A) the term "Commercial
         Software" means packaged commercially available software programs
         generally available to the public which have been licensed to Parent
         pursuant to end-user licenses that permit the use of such programs
         without a right to modify, distribute or sublicense the same; (B) the
         term "Parent Embedded Products" means all software that are
         incorporated in any existing product or service of Parent; and (C) the
         term "Proprietary Rights" means (1) patents, patent applications,
         patent disclosures and inventions, (2) trademarks, service marks, trade
         dress, trade names, Internet domain names and

                                       15
<PAGE>   23
         corporate names (in their respective state of incorporation) and
         registrations and applications for registration thereof, (3) copyrights
         and registrations and applications for registration thereof, (4) mask
         works and registrations and applications for registration thereof, (5)
         computer software, data and documentation (in both source code and
         object code form), (6) trade secrets and other confidential and
         proprietary information (including, but not limited to, inventions
         (whether patentable or unpatentable), know-how and copyrightable works,
         (7) other confidential and proprietary intellectual property rights,
         (8) copies and tangible embodiments thereof (in whatever form or
         medium) and (9) all renewals, extensions, revivals and resuscitations
         thereof.

                  (p)      AGREEMENTS, CONTRACTS AND COMMITMENTS; MATERIAL
         CONTRACTS. Except as set forth in Section 5.1(m) of the Parent
         Disclosure Schedule, (i) each material agreement, contract, obligation,
         promise or undertaking (whether written or oral and whether express or
         implied) to which Parent is a party or by which Parent or its assets is
         or may become bound (a "Parent Contract") is in full force and effect;
         and (ii) no condition exists or event has occurred that to the
         Knowledge of Parent, (whether with or without notice or lapse of time
         or both, or the happening or occurrence of any other event) would
         constitute a default by Parent or a Subsidiary of Parent or, to the
         Knowledge of Parent, any other party thereto under, or result in a
         right in termination of, any Parent Contract, except as could not,
         individually or in the aggregate, be reasonably expected to result in a
         Material Adverse Effect on Parent.

                  (q)      UNLAWFUL PAYMENTS AND CONTRIBUTIONS. To the Knowledge
         of Parent, neither Parent, any Subsidiary of Parent nor any of their
         respective directors, officers, employees or agents has, with respect
         to the businesses of Parent or its Subsidiaries, (i) used any funds for
         any unlawful contribution, endorsement, gift, entertainment or other
         unlawful expense relating to political activity; (ii) made any direct
         or indirect unlawful payment to any foreign or domestic government
         official or employee; (iii) violated or is in violation of any
         provision of the Foreign Corrupt Practices Act of 1977, as amended; or
         (iv) made any bribe, rebate, payoff, influence payment, kickback or
         other unlawful payment to any Person or entity.

                  (r)      INSURANCE. The insurance policies (including
         "self-insurance" programs) now maintained by Parent (the "Parent
         Insurance Policies") are in full force and effect, Parent is not in
         material default under any of the Parent Insurance Policies and no
         claim for coverage under any of the Parent Insurance Policies has been
         denied. Parent has not received any notice of cancellation or intent to
         cancel or increase or intent to increase premiums with respect to such
         insurance policies nor, to the Knowledge of Parent, is there any basis
         for any such action.

                  (s)      LABOR AND EMPLOYEE RELATIONS. None of the employees
         of Parent or any of its Subsidiaries is represented in his or her
         capacity as an employee of such company by any labor organization.
         Neither Parent nor any of its Subsidiaries has recognized any labor
         organization nor has any labor organization been elected as the
         collective bargaining

                                       16
<PAGE>   24

         agent of any of their employees, nor has Parent or any of its
         Subsidiaries signed any collective bargaining agreement or union
         contract recognizing any labor organization as the bargaining agent of
         any of their employees. To the Knowledge of Parent, there is no active
         or current union organization activity involving the employees of
         Parent or any of its Subsidiaries, nor has there ever been union
         representation involving employees of Parent or any of its
         Subsidiaries. To the Knowledge of Parent, Parent and each of its
         Subsidiaries is in compliance with all Federal, foreign (as
         applicable), and state laws regarding employment practices, including
         laws relating to workers' safety, sexual harassment or discrimination,
         except where the failure to so be in compliance, individually or in the
         aggregate, would not have a Material Adverse Effect on Parent. To the
         Knowledge of Parent, none of the Parent Key Employees has any plans to
         terminate his or her employment with Parent or any of its Subsidiaries.

                  (t)      PERMITS. Parent and each of its Subsidiaries hold all
         licenses, permits, registrations, orders, authorizations, approvals and
         franchises that are required to permit it to conduct its businesses as
         presently conducted, except where the failure to hold such licenses,
         permits, registrations, orders, authorizations, approvals or franchises
         could not reasonably be expected to, individually or in the aggregate,
         have a Material Adverse Effect on Parent. All such licenses, permits,
         registrations, orders, authorizations, approvals and franchises are
         now, and will be after the Closing, valid and in full force and effect,
         except where the failure to be valid and in full force and effect or to
         have the benefit of any such license, permit, registration, order,
         authorization, approval or franchise could not reasonably be expected
         to, individually or in the aggregate, have a Material Adverse Effect on
         Parent. Neither Parent nor any of its Subsidiaries has received any
         notification of any asserted present failure (or past and unremedied
         failure) by it to have obtained any such license, permit, registration,
         order, authorization, approval or franchise, except where such failure
         could not reasonably be expected to, individually or in the aggregate,
         have a Material Adverse Effect on Parent.

         5.2      REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Parent and Merger Sub that the statements
contained in this Section 5.2 are true and correct, except to the extent
specifically set forth on the disclosure schedule delivered contemporaneously
with this Agreement by the Company to Parent and Merger Sub (the "Company
Disclosure Schedule"). The Company Disclosure Schedule shall be arranged in
sections and paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 5.2, and the disclosure in any paragraph shall qualify
only the corresponding paragraph in this Section 5.2 or other paragraphs or
sections to which it is clearly apparent (from a plain reading of the
disclosure) that such disclosure relates.

                  (a)      CORPORATE ORGANIZATION AND QUALIFICATION. Each of the
         Company and its Subsidiaries is a corporation duly organized, validly
         existing and in good standing under the laws of its jurisdiction of
         incorporation and is qualified and in good standing as a foreign
         corporation in each jurisdiction where the properties owned, leased or
         operated, or the business conducted, by it require such qualification,
         except where failure to be so could not, individually or in the
         aggregate, reasonably be expected to have a Material

                                       17
<PAGE>   25

         Adverse Effect on the Company. Each of the Company and its Subsidiaries
         has all requisite power and authority (corporate or otherwise) to own
         its properties and to carry on its business as it is now being
         conducted. All of the Subsidiaries of the Company are set forth in
         Section 5.2(a) of the Company Disclosure Schedule. The Company has
         heretofore made available to Parent complete and correct copies of its
         Articles of Incorporation and by-laws and the charter documents of its
         Subsidiaries, each as amended.

                  (b)      CAPITALIZATION. The authorized capital stock of the
         Company consists of (i) 100,000,000 shares of common stock, no par
         value per share, of which 21,930,551 shares were issued and outstanding
         on the date hereof, and (ii) 20,000,000 shares of preferred stock, no
         par value per share, none of which are issued or outstanding. All of
         the outstanding shares of capital stock of the Company and its
         Subsidiaries have been duly authorized and validly issued and are fully
         paid and nonassessable. The Company has no outstanding stock
         appreciation rights, phantom stock or similar rights. All outstanding
         shares of capital stock or other equity interests of the Subsidiaries
         of the Company are owned by the Company or a direct or indirect
         wholly-owned Subsidiary of the Company, free and clear of all liens,
         pledges, charges, encumbrances, claims and options of any nature.
         Except for options to purchase 3,690,719 Company Shares issued pursuant
         to the Melita International Corporation 1992 Stock Option Plan, as
         amended, the Melita International Corporation 1997 Stock Option Plan,
         as amended, and the eshare Technologies, Inc. Stock Option and
         Restricted Stock Purchase Plan, as amended (collectively, the "Company
         Option Plans"), there are no outstanding or authorized options,
         warrants, calls, rights (including preemptive rights), commitments or
         any other agreements of any character which the Company or any of its
         Subsidiaries is a party to, or may be bound by, requiring it to issue,
         transfer, grant, sell, purchase, redeem or acquire any shares of
         capital stock or any of its securities or rights convertible into,
         exchangeable for, or evidencing the right to subscribe for, any shares
         of capital stock of the Company or any of its Subsidiaries. As of the
         date hereof, no Company Shares have been made available for issuance
         pursuant to the Melita International Corporation Employee Stock
         Purchase Plan (the "ESPP"). There are no shareholder agreements, voting
         trusts or other agreements or understandings to which the Company is a
         party or to which it is bound relating to the voting of any shares of
         the capital stock of the Company. No existing rights with respect to
         the registration of Company Shares under the Securities Act, including,
         but not limited to, demand rights or piggy-back registration rights,
         shall apply with respect to any Parent Shares issuable in connection
         with the Merger or upon exercise of Substitute Options. The Company has
         provided to Parent a list, as of the date hereof of the outstanding
         options and warrants to acquire Company Shares, the name of the holder
         of such option or warrant, the exercise price of such option or
         warrant, the number of shares as to which such option or warrant will
         have vested at such date and whether the exercisability of such option
         or warrant will be accelerated in any way by the transactions
         contemplated by this Agreement and the extent of acceleration, if any,
         and any adjustments to such options or warrants resulting from the
         consummation of the transactions contemplated by this Agreement. Since
         May 29, 2001, no Company Options or other options or warrants
         convertible or exchangeable for Company Shares have been

                                       18
<PAGE>   26

         issued or accelerated or had their terms modified. Szlam has executed
         and delivered the Voting Agreement.

                  (c)      FAIRNESS OPINION. The Board of Directors of the
         Company has received an opinion in writing from Broadview International
         LLC, to the effect that, as of the date hereof and based upon and
         subject to the matters stated therein, the consideration to be received
         by the holders of Company Shares in the Merger is fair to such holders
         from a financial point of view and a copy of such opinion has been
         provided to Parent, and such opinion has not been withdrawn, revoked or
         modified.

                  (d)      AUTHORITY RELATIVE TO THIS AGREEMENT. The Board of
         Directors of the Company has declared the Merger advisable, and the
         Company has the requisite corporate power and authority to approve,
         authorize, execute and deliver this Agreement and to consummate the
         transactions contemplated hereby. This Agreement and the consummation
         by the Company of the transactions contemplated hereby have been duly
         and validly authorized by the Board of Directors of the Company, and no
         other corporate proceedings on the part of the Company are necessary to
         authorize this Agreement or to consummate the transactions contemplated
         hereby (other than the approval of this Agreement and the Merger by the
         shareholders of the Company in accordance with the GBCC). This
         Agreement has been duly and validly executed and delivered by the
         Company and, assuming this Agreement constitutes the valid and binding
         agreement of Parent and Merger Sub, constitutes the valid and binding
         agreement of the Company, enforceable against the Company in accordance
         with its terms, subject, as to enforceability, to bankruptcy,
         insolvency, reorganization and other laws of general applicability
         relating to or affecting creditors' rights and to general principles of
         equity.

                  (e)      PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS. Neither
         the Company nor any of its Subsidiaries is: (i) in violation of its
         Articles of Incorporation or by-laws or similar documents; (ii) in
         default in the performance of any obligation, agreement or condition of
         any debt instrument which (with or without the passage of time or the
         giving of notice, or both) affords to any Person the right to
         accelerate any indebtedness or terminate any right; (iii) in default
         under or breach of (with or without the passage of time or the giving
         of notice) any other contract to which it is a party or by which it or
         its assets are bound; or (iv) in violation of any law, regulation,
         administrative order or judicial order, decree or judgment (domestic or
         foreign) applicable to it or its business or assets, except where any
         violation, default or breach under items (ii), (iii), or (iv) could not
         reasonably be expected to, individually or in the aggregate, have a
         Material Adverse Effect on the Company.

                  (f)      CONSENTS AND APPROVALS; NO VIOLATION. Neither the
         execution and delivery of this Agreement by the Company nor the
         consummation by the Company of the transactions contemplated hereby
         will (i) conflict with or result in any breach of any provision of its
         Certificate of Incorporation or by-laws; (ii) require any consent,
         approval, authorization or permit of, or registration or filing with or
         notification to, any governmental or regulatory authority, in each
         case, by or on behalf of the Company or
<PAGE>   27

         any of its Subsidiaries, except (A) in connection with the applicable
         requirements, if any, of the HSR Act, (B) pursuant to the applicable
         requirements of the Securities Act and the Exchange Act and the NNM,
         (C) the filing of the Certificates of Merger pursuant to the DGCL and
         the GBCC and appropriate documents with the relevant authorities of
         other states in which the Company is authorized to do business, (D) as
         may be required by any applicable state securities laws, (E) such
         consents, approvals, orders, authorizations, registrations,
         declarations and filings as may be required under the antitrust or
         competition laws of any foreign country or (F) where the failure to
         obtain such consent, approval, authorization or permit, or to make such
         registration, filing or notification, could not reasonably be expected
         to, individually or in the aggregate, have a Material Adverse Effect on
         the Company or adversely affect the ability of the Company to
         consummate the transactions contemplated hereby; (iii) result in a
         violation or breach of, or constitute (with or without notice or lapse
         of time or both) a default (or give rise to any right of termination,
         cancellation or acceleration or lien or other charge or encumbrance)
         under any of the terms, conditions or provisions of any indenture,
         note, license, lease, agreement or other instrument or obligation to
         which the Company or any of its Subsidiaries is a party or by which any
         of their assets may be bound, except for such violations, breaches and
         defaults (or rights of termination, cancellation, or acceleration or
         lien or other charge or encumbrance) as to which requisite waivers or
         consents have been obtained or which, individually or in the aggregate,
         could not reasonably be expected to have a Material Adverse Effect on
         the Company or adversely affect the ability of the Company to
         consummate the transactions contemplated hereby; (iv) cause the
         suspension or revocation of any authorizations, consents, approvals or
         licenses currently in effect which, individually or in the aggregate,
         could reasonably be expected to have a Material Adverse Effect on the
         Company; or (v) assuming the consents, approvals, authorizations or
         permits and registrations, filings or notifications referred to in this
         Section 5.2(f) are duly and timely obtained or made, violate any order,
         writ, injunction, decree, statute, rule or regulation applicable to the
         Company or any of its Subsidiaries or to any of their respective
         assets, except for violations which could not reasonably be expected
         to, individually or in the aggregate, have a Material Adverse Effect on
         the Company or adversely affect the ability of the Company to
         consummate the transactions contemplated hereby.

                  (g)      LITIGATION. Except as disclosed in Company SEC
         Reports filed prior to the date hereof, or as set forth in Section
         5.2(g) of the Company Disclosure Schedule, there are no actions, suits,
         claims, investigations or proceedings pending or, to the Knowledge of
         the Company, threatened against the Company or any of its Subsidiaries
         that, individually or in the aggregate, could reasonably be expected to
         result in obligations or liabilities of the Company or any of its
         Subsidiaries that would have, or that would otherwise have,
         individually or in the aggregate, a Material Adverse Effect on the
         Company or a Material Adverse Effect on the Parties' ability to
         consummate the transactions contemplated by this Agreement. Neither the
         Company nor any of its Subsidiaries is subject to any outstanding
         judgment, order, writ, injunction or decree which (i) has or may have
         the effect of prohibiting or impairing any business practice of the
         Company or any of its Subsidiaries, any acquisition of property
         (tangible or

                                       20

<PAGE>   28

         intangible) by the Company or any of its Subsidiaries, the conduct of
         the business by the Company or any of its Subsidiaries, or Company's
         ability to perform its obligations under this Agreement or (ii),
         insofar as can be reasonably foreseen, individually or in the
         aggregate, could reasonably be expected to have a Material Adverse
         Effect on the Company.

                  (h)      SEC REPORTS; FINANCIAL STATEMENTS.

                           (i)      The Company has filed all forms, reports and
                  documents with the SEC required or deemed advisable to be
                  filed by it pursuant to the federal securities laws and the
                  SEC rules and regulations thereunder, all of which complied in
                  all material respects with all applicable requirements of the
                  Securities Act and the Exchange Act (the "Company SEC
                  Reports"). None of the Company SEC Reports, including, without
                  limitation, any financial statements or schedules included
                  therein, at the time filed (or if amended or superseded by a
                  filing prior to the date of this Agreement, then on the date
                  of such filing) contained any untrue statement of a material
                  fact or omitted to state a material fact required to be stated
                  therein or necessary in order to make the statements therein,
                  in 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 other documents with the SEC.

                           (ii)     The consolidated balance sheets and the
                  related statements of income, shareholders' equity or deficit
                  and cash flow (including the related notes thereto) of the
                  Company included in the Company SEC Reports (collectively, the
                  "Company Financial Statements") comply as to form in all
                  material respects with applicable accounting requirements and
                  the published rules and regulations of the SEC with respect
                  thereto, have been prepared in accordance with generally
                  accepted accounting principles applied on a basis consistent
                  throughout the periods involved (except as otherwise noted
                  therein or, in the case of unaudited interim financial
                  statements, as may be permitted by the SEC on Form 10-Q under
                  the Exchange Act), and present fairly the consolidated
                  financial position of the Company and its consolidated
                  Subsidiaries as of their respective dates, and the results of
                  its operations and its cash flow for the periods presented
                  therein, except that the unaudited interim financial
                  statements do not include footnote disclosure of the type
                  associated with audited financial statements and were or are
                  subject to normal and recurring year-end adjustments which
                  were not or are not expected to be material in amount.

                           (iii)    Since December 31, 2000, there has not been
                  any material change, by the Company or any of its Subsidiaries
                  in accounting principles, methods or policies for financial
                  accounting purposes, except as required by concurrent changes
                  in generally accepted accounting principles, or as disclosed
                  in the Company SEC Reports. There are no material amendments
                  or modifications to agreements, documents or other instruments
                  which previously had been filed by

                                       21

<PAGE>   29

                  the Company with the SEC pursuant to the Securities Act or the
                  Exchange Act, which have not been filed with the SEC but which
                  are required to be filed.

                  (i)      NO LIABILITIES. Neither the Company nor any of its
         Subsidiaries has any material indebtedness, obligations or liabilities
         of any kind (whether accrued, absolute, contingent or otherwise, and
         whether due or to become due or asserted or unasserted), and, to the
         Knowledge of the Company, there is no reasonable basis for the
         assertion of any claim with respect to any indebtedness, obligation or
         liability of any nature against the Company or any of its Subsidiaries,
         except for indebtedness, obligations and liabilities (i) which are
         fully reflected in, reserved against or otherwise described in the most
         recent Company Financial Statements, (ii) which have been incurred
         after the most recent company Financial Statements in the ordinary
         course of business, consistent with past practice, (iii) which are
         obligations to perform under executory contracts in the ordinary course
         of business (none of which is a liability resulting from a breach of
         contract or warranty, tort, infringement or legal action) or (iv)
         which, individually or in the aggregate, could not reasonably be
         expected to have a Material Adverse Effect on the Company.

                  (j)      ABSENCE OF CERTAIN CHANGES OF EVENTS. Except as
         described in the Company SEC Reports, since December 31, 2000, except
         with respect to the actions contemplated by this Agreement, the Company
         has conducted its business only in the ordinary course and in a manner
         consistent with past practice and, since such date, there has not been
         (i) any Material Adverse Effect on the Company, (ii) any damage,
         destruction or loss of assets of the Company or any of its Subsidiaries
         (whether or not covered by insurance) that has had or could reasonably
         be expected to have, individually or in the aggregate, a Material
         Adverse Effect on the Company, (iii) any material change by the Company
         in its accounting methods, principles or practices; (iv) any material
         revaluation by the Company or any of its Subsidiaries of any of its
         assets, including, without limitation, writing down the value of
         capitalized software or inventory or deferred tax assets or writing off
         notes or accounts receivable other than in the ordinary course of
         business; (v) any labor dispute or charge of unfair labor practice
         (other than routine individual grievances), which, individually or in
         the aggregate, has had or could reasonably be expected to have a
         Material Adverse Effect on the Company, any activity or proceeding by a
         labor union or representative thereof to organize any employee of the
         Company or any of its Subsidiaries or any campaign being conducted to
         solicit authorization from employees to be represented by such labor
         union in each case which, individually or in the aggregate, has had or
         could reasonably be expected to have a Material Adverse Effect on the
         Company; (vi) any waiver by the Company or any of its Subsidiaries of
         any rights of material value or (vii) any other action or event that
         would have required the consent of Parent pursuant to Section 6.1 had
         such action or event occurred after the date of this Agreement.

                  (k)      BROKERS AND FINDERS. Except for the fees and expenses
         payable to Broadview International LLC, which fees and expenses are
         determined pursuant to its agreement with the Company, a true and
         complete copy of which (including all amendments) has

                                       22

<PAGE>   30

         been furnished to Parent, neither the Company nor any of its
         Subsidiaries has employed any investment banker, broker, finder,
         consultant or intermediary in connection with the transactions
         contemplated by this Agreement which would be entitled to any
         investment banking, brokerage, finder's or similar fee or commission in
         connection with this Agreement or the transactions contemplated hereby.

                  (l)      S-4 REGISTRATION STATEMENT AND PROXY
         STATEMENT/PROSPECTUS. None of the information supplied or to be
         supplied by the Company for inclusion or incorporation by reference in
         the S-4 Registration Statement or the Proxy Statement will (i) in the
         case of the S-4 Registration Statement, at the time it becomes
         effective or at the Effective Time, contain any untrue statement of a
         material fact or omit to state any material fact required to be stated
         therein or necessary in order to make the statements therein not
         misleading, or (ii) in the case of the Proxy Statement, at the time of
         the mailing of the Proxy Statement, at the time of the Company
         Shareholders Meeting and Parent Stockholders Meeting (if necessary),
         and at the Effective Time, contain any untrue statement of a material
         fact or omit 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 are made, not misleading. If at any time
         prior to the Effective Time any event with respect to the Company, its
         officers and directors or any of its Subsidiaries should occur which is
         required to be described in an amendment of, or a supplement to, the
         Proxy Statement or the S-4 Registration Statement, the Company shall
         promptly inform Parent so that such event may be so described and such
         amendment or supplement promptly filed with the SEC and, as required by
         law, disseminated to the shareholders of the Company. The S-4
         Registration Statement will (with respect to the Company) comply as to
         form in all material respects with the requirements of the Securities
         Act. The Proxy Statement will (with respect to the Company) comply as
         to form in all material respects with the requirements of the Exchange
         Act. Notwithstanding the foregoing, the Company makes no representation
         or warranty with respect to any information supplied by, or related to,
         Parent or Merger Sub or any of their affiliates or advisors which is
         contained in any of the foregoing documents.

                  (m)      TAXES.

                           (i)      Except as set forth in Section 5.2 (m) of
                  the Company Disclosure Schedule, the Company and each of its
                  Subsidiaries has timely filed (after taking into account any
                  extensions to file) all federal, state, local and foreign
                  Returns required by applicable Tax law to be filed by the
                  Company and each of its Subsidiaries. All Taxes owed by the
                  Company or any of its Subsidiaries to a taxing authority, or
                  for which the Company or any of its Subsidiaries is liable,
                  whether to a taxing authority or to other Persons or entities
                  under a Significant Tax Agreement, as of the date hereof, have
                  been paid and, as of the Effective Time, will have been paid.
                  All Returns were true and correct in all material respects
                  when filed. Other than any reserve for deferred Taxes
                  established to reflect timing differences between book and Tax
                  treatment, the Company has made accruals for Taxes on the
                  Company Financial Statements which are

                                       23

<PAGE>   31

                  adequate to cover any Tax liability of the Company and each of
                  its Subsidiaries determined in accordance with generally
                  accepted accounting principles through the date of the Company
                  Financial Statements.

                           (ii)     The Company and each of its Subsidiaries
                  have withheld with respect to its employees, creditors,
                  independent contractors, shareholders or other parties all
                  federal and state income taxes, FICA, FUTA and other Taxes
                  required to be withheld.

                           (iii)    There is no Tax deficiency outstanding,
                  assessed, or to the Company's Knowledge, proposed against the
                  Company or any of its Subsidiaries. Neither the Company nor
                  any of its Subsidiaries have executed or requested any waiver
                  of any statute of limitations on or extending the period for
                  the assessment or collection of any federal or material state
                  Tax that is still in effect. There are no liens for Taxes on
                  the assets of Company or of any of its Subsidiaries other than
                  with respect to Taxes not yet due and payable.

                           (iv)     No federal or state Tax audit or other
                  examination of the Company or any of its Subsidiaries is
                  presently in progress, nor has the Company or any of its
                  Subsidiaries been notified either in writing or orally of any
                  request for such federal or state Tax audit or other
                  examination.

                           (v)      Neither the Company nor any of its
                  Subsidiaries has filed any consent agreement under Section
                  341(f) of the Code or agreed to have Section 341(f)(2) of the
                  Code apply to any disposition of a subsection (f) asset (as
                  defined in Section 341(f)(4) of the Code) owned by the
                  Company.

                           (vi)     Neither the Company nor any of its
                  Subsidiaries is a party to (A) any agreement with a party
                  other than the Company or any of its Subsidiaries providing
                  for the allocation or payment of Tax liabilities or payment
                  for Tax benefits with respect to a consolidated, combined or
                  unitary Return which Return includes or included the Company
                  or any Subsidiary or (B) any Significant Tax Agreement other
                  than any Significant Tax Agreement described in (A).

                           (vii)    Except for the group of which the Company
                  and its Subsidiaries are now presently members, neither the
                  Company nor any of its Subsidiaries has ever been a member of
                  an affiliated group of corporations within the meaning of
                  Section 1504 of the Code. There is no excess loss account,
                  deferred intercompany gain or loss, or intercompany items as
                  such terms are defined in the regulations promulgated under
                  the Code, that exist with respect to the Company or any of its
                  Subsidiaries.

                           (viii)   Neither the Company nor any of its
                  Subsidiaries is a party to any joint venture, partnership or
                  other arrangement or contract which could be treated as a
                  partnership for federal income tax purposes.

                                       24

<PAGE>   32

                           (ix)     Neither the Company nor any of its
                  Subsidiaries has agreed to make nor is it required to make any
                  adjustment under Section 481(a) of the Code by reason of a
                  change in accounting method or otherwise which have not yet
                  been taken into account.

                           (x)      There is no contract, agreement, plan or
                  arrangement covering any individual or entity treated as an
                  individual included in the business or assets of the Company
                  or its Subsidiaries that, individually or collectively, could
                  give rise to the payment by the Company, a Subsidiary, Merger
                  Sub or Parent of an amount that would not be deductible by
                  reason of Sections 280G or 162(m) of the Code or similar
                  provisions of Tax law.

                           (xi)     The Company is not, and has not at any time
                  been, a "United States real property holding corporation"
                  within the meaning of Section 897 (c)(2) of the Code.

         (n)      EMPLOYEE BENEFITS.

                  (i)      For purposes hereof, the term "Company Scheduled
         Plans" means each "employee pension benefit plan" (as such term is
         defined in Section 3(2) of ERISA), "employee welfare benefit plan" (as
         such term is defined in Section 3(1) of ERISA), material personnel or
         payroll policy (including vacation time, holiday pay, service awards,
         moving expense reimbursement programs and sick leave) or material
         fringe benefit, severance agreement or plan or any medical, hospital,
         dental, life or disability plan, pension benefit plan, excess benefit
         plan, bonus, stock option, stock purchase or other incentive plan
         (including any equity or equity-based plan), tuition reimbursement,
         automobile use, club membership, parental or family leave, top hat plan
         or deferred compensation plan, salary reduction agreement,
         change-of-control agreement, employment agreement, consulting
         agreement, or collective bargaining agreement, indemnification
         agreement, retainer agreement, or any other material benefit plan,
         policy, program, arrangement, agreement or contract, whether or not
         written or terminated, with respect to any employee, former employee,
         director, independent contractor, or any beneficiary or dependent
         thereof maintained, sponsored, adopted or administered by the Company
         or any current or former Company Plan Affiliate or to which the Company
         or any current or former Company Plan Affiliate has made contributions
         to, obligated itself or had any liability (whether accrued, absolute,
         contingent or otherwise, and whether due or to become due or asserted
         or unasserted) with respect thereto. A "Company Plan Affiliate" is each
         entity which is, or has even been, treated as a single employer with
         the Company pursuant to Section 4001 of ERISA or Section 414 of the
         Code. The Company has provided Parent with copies of all employee
         manuals of the Company and its Subsidiaries that include personnel
         policies applicable to any of their respective employees.

                                       25

<PAGE>   33

                  (ii)     The Company has made available to Parent a complete
         and accurate copy of each written Company Scheduled Plan, together
         with, if applicable, a copy of audited financial statements, actuarial
         reports and Form 5500 Annual Reports (including required schedules), if
         any, for the three (3) most recent plan years, the most recent IRS
         determination letter or IRS recognition of exemption; each other
         material letter, ruling or notice issued by a governmental body with
         respect to each such plan, a copy of each trust agreement, insurance
         contract or other funding vehicle, if any, with respect to each such
         plan, the current summary plan description and summary of material
         modifications thereto with respect to each such plan and Form 5310.
         Section 5.2(n) of the Company Disclosure Schedule contains a
         description of the material terms of any unwritten Company Scheduled
         Plan as comprehended to the Closing Date. There are no negotiations,
         demands or proposals which are pending or threatened which concern
         matters now covered, or that would be covered, by the foregoing types
         of unwritten Company Scheduled Plans.

                  (iii)    Each Company Scheduled Plan (1) has been in
         compliance and currently complies in form and in operation with all
         applicable requirements of ERISA and the Code, and any other legal
         requirements; (2) has been and is operated and administered in
         compliance with its terms (except as otherwise required by law); (3)
         has been and is operated in compliance with applicable legal
         requirements in such a manner as to qualify, where appropriate, for
         both Federal and state purposes, for income tax exclusions to its
         participants, tax-exempt income for its funding vehicle, and the
         allowance of deductions and credits with respect to contributions
         thereto. Each Company Scheduled Plan which is intended to be qualified
         under Section 401(a) of the Code has received a favorable determination
         letter or recognition of exemption from the Internal Revenue Service on
         which the Company can rely.

                  (iv)     With respect to each Company Scheduled Plan, there
         are no claims or other proceedings pending or, to the Knowledge of the
         Company, threatened with respect to the assets thereof (other than
         routine claims for benefits).

                  (v)      With respect to each Company Scheduled Plan, no
         Person: (1) has entered into any "prohibited transaction," as such term
         is defined in ERISA or the Code and the regulations, administrative
         rulings and case law thereunder that is not otherwise exempt under Code
         Section 4975 or ERISA Section 408 (or any administrative class
         exemption issued thereunder); (2) has breached a fiduciary obligation
         or violated Sections 402, 403, 405, 503, 510 or 511 of ERISA; (3) has
         any liability for any failure to act or comply in connection with the
         administration or investment of the assets of such plans; or (4)
         engaged in any transaction or otherwise acted with respect to such
         plans in such a manner which could subject Parent, or any fiduciary or
         plan administrator or any other Person dealing with any such plan, to
         liability under Section 409 or 502 of ERISA or Sections 4972 or 4976
         through 4980B of the Code.

                                       26

<PAGE>   34

                  (vi)     Each Company Scheduled Plan (other than any stock
         option plan) may be amended, terminated, modified or otherwise revised
         by the Company or Parent, on and after the Closing, without further
         liability to the Company or Parent (other than ordinary administrative
         expenses or routine claims for benefit plans).

                  (vii)    None of the Company or any current or former Company
         Plan Affiliate has at any time participated in, made contributions to
         or had any other liability with respect to any Company Scheduled Plan
         which is a "multi-employer plan" as defined in Section 4001 of ERISA, a
         "multi-employer plan" within the meaning of Section 3(37) of ERISA, a
         "multiple employer plan" within the meaning of Section 413(c) of the
         Code, a "multiple employer welfare arrangement" within the meaning of
         Section 3(40) of ERISA or a plan that is subject to Title IV of ERISA.

                  (viii)   No Company Scheduled Plan provides, or reflects or
         represents any liability to provide retiree health coverage to any
         person for any reason, except as may be required by COBRA or applicable
         state insurance laws, and neither the Company nor any Company Plan
         Affiliate has any liability (whether accrued, absolute, contingent or
         otherwise, and whether due or to become due to asserted or unasserted)
         to any current or former employee, consultant or director (either
         individually or as a group) to provide retiree health coverage, except
         to the extent required by applicable continuation coverage statutes.

                  (ix)     Neither the Company nor a Company Plan Affiliate has
         any liability for any excise tax imposed by Code Sections 4971, 4972,
         4977, or 4979.

                  (x)      With respect to any Company Scheduled Plan which is a
         welfare plan as defined in Section 3(1) of ERISA; (1) each such welfare
         plan which is intended to meet the requirements for tax-favored
         treatment under Subchapter B of Chapter 1 of the Code materially meets
         such requirements; and (2) there is no disqualified benefit (as such
         term is defined in Code Section 4976(b)) which would subject the
         Company or any Company Plan Affiliate to a tax under Code Section
         4976(a).

                  (xi)     Each Company Scheduled Plan that has been adopted or
         maintained by the Company or any Company Plan Affiliate, whether
         informally or formally, or with respect to which the Company or any
         Company Plan Affiliate will or may have any liability, for the benefit
         of the Company Employees who perform services outside the United States
         (the "Company International Employee Plans") has been established,
         maintained and administered in compliance with its terms and conditions
         and with the requirements prescribed by any and all statutory or
         regulatory laws that are applicable to such Company International
         Employee Plan. Furthermore, no Company International Employee Plan has
         unfunded liabilities, that, as of the Effective Time, will not be
         offset by insurance or fully accrued. Except as required by law, no
         condition exists that would

                                       27

<PAGE>   35

          prevent the Company or any Company Plan Affiliate from terminating or
          amending any Company International Employee Plan at any time for any
          reason without liability to the Company or any Company Plan Affiliate
          (other than ordinary administration expenses or routine claims for
          benefits).

                  (xii)    Neither the Company nor any current or former Company
         Plan Affiliate has, or has ever had, any liability (including, but not
         limited to, any contingent liability) with respect to any plan subject
         to Title IV of ERISA or Section 412 of the Code or any plan maintained
         by any former Company Plan Affiliate.

                  (xiii)   Other than by reason of actions taken following the
         Closing, neither the execution of this Agreement nor the consummation
         of the transactions contemplated by this Agreement will (1) entitle any
         current or former employee of the Company to severance pay,
         unemployment compensation or any other payment, (2) accelerate the time
         of payment or vesting of any payment (other than for a terminated or
         frozen tax-qualified plan, pursuant to a requirement herein to freeze
         or terminate such plan), cause the forgiveness of any indebtedness, or
         increase the amount of any compensation due to any such employee or
         former employee, (3) result in any prohibited transaction described in
         Section 406 of ERISA or Section 4975 of the Code for which an exemption
         is not available, or (4) give rise to the payment of any amount that
         would not be deductible pursuant to the terms of Section 280G of the
         Code.

                  (xiv)    The Company has not entered into any contract,
         agreement or arrangement covering any employee that gives rise to the
         payment of any amount that would not be deductible pursuant to the
         terms of Section 162(m) of the Code.

                  (xv)     The Company Option Plans and the ESPP are
         "broadly-based plans" as defined under the rules and regulations of the
         NNM and have been approved by Company shareholders at duly convened
         shareholders meetings with respect to which the Company solicited
         proxies in favor of each of the Company Option Plans and the ESPP.

         (o)      COMPANY INTANGIBLE PROPERTY.

                  (i)      Except as set forth in Section 5.2(o) of the Company
         Disclosure Schedule, the Company owns, or is licensed, or otherwise
         possesses legally enforceable rights, to use, sell or license, as
         applicable, all Proprietary Rights (excluding in each case Commercial
         Software) used, sold, distributed or licensed in or as a part of the
         business of the Company and its Subsidiaries as currently conducted
         (the "Company Proprietary Rights"). Except as disclosed in Section
         5.2(o) of the Company Disclosure Schedule, the Company has licenses for
         all copies of Commercial Software used in its business and the Company
         does not have any obligation to pay fees, royalties and other amounts
         at any time pursuant to any such license.

                                       28

<PAGE>   36

                  (ii)     Except for Commercial Software and Company Embedded
         Products for which the Company has valid non-exclusive licenses that
         are adequate for the conduct of the Company's business, the Company is
         the sole and exclusive owner of the Company Proprietary Rights (free
         and clear of any Encumbrances), and has sole and exclusive rights to
         the use and distribution therefor or the material covered thereby in
         connection with the services or products in respect of which such
         Company Proprietary Rights are currently being used, sold, licensed or
         distributed. The Company is not contractually obligated to pay
         compensation to any third party with respect to the use or distribution
         of any Company Proprietary Rights, except pursuant to the Contracts set
         forth in Section 5.2(o) of the Company Disclosure Schedule.

                  (iii)    Except as disclosed in Section 5.2(o) of the Company
         Disclosure Schedule, (A) the Company has not materially infringed on
         any intellectual property rights of any third Persons and (B) none of
         the Company Proprietary Rights materially infringes on any intellectual
         property rights of any third Persons.

                  (iv)     Except as disclosed in Section 5.2(o) of the Company
         Disclosure Schedule, no actions, suits, claims, investigations or
         proceedings with respect to the Company Proprietary Rights are pending
         or, to the Knowledge of the Company, threatened by any Person, (A)
         alleging that the manufacture, sale, licensing, distributing or use of
         any Company Proprietary Rights as now manufactured, sold, licensed,
         distributed or used by the Company or any third party infringes on any
         intellectual property rights of any third party or the Company, (B)
         against the use or distribution by the Company or any third party of
         any technology, know-how or computer software used in the business of
         the Company and its Subsidiaries as currently conducted or (iii)
         challenging the ownership by the Company, validity or effectiveness of
         any such Company Proprietary Rights.

                  (v)      Except as disclosed in Section 5.2(o) of the Company
         Disclosure Schedule, the Company has not entered into any agreement,
         contract or commitment under which the Company is restricted, and the
         Company is not otherwise restricted, from (A) selling, licensing or
         otherwise distributing any products to any class or type of customers
         or directly or through any type of channel in any geographic area or
         during any period of time, or (B) combining, incorporating, embedding
         or bundling or allowing others to combine, incorporate, embed or bundle
         any of its products with those of another party, as each such
         restriction may effect any product currently being developed, marketed
         or sold by the Company or that otherwise would have a Material Adverse
         Effect on the Company.

                  (vi)     The Company has taken reasonable security measures to
         safeguard and maintain its rights in all of the Company Proprietary
         Rights. To the

                                       29

<PAGE>   37

          Company's Knowledge, except as set forth in Section 5.2(o) of the
          Company Disclosure Schedule, all copies of the source code to Company
          Software and Company trade secrets are physically in the control of
          the Company at the Company's facilities. All officers, employees and
          consultants of the Company who have access to proprietary information
          have executed and delivered to the Company an agreement regarding the
          protection of proprietary information, and the assignment to or
          ownership by the Company of all Company Proprietary Rights arising
          from the services performed for the Company by such Persons. To the
          Knowledge of the Company, no current or prior officers, employees or
          consultants of the Company claim, and the Company is not aware of any
          grounds to assert a claim to, any ownership interest in any Company
          Proprietary Right as a result of having been involved in the
          development of such property while employed by or consulting to the
          Company or otherwise.

                  (vii)    All authors of the software included in the Company
         Proprietary Rights (the "Company Software") or any other Person who
         participated in the development of the Company Software or any portion
         thereof or performed any work related to the Company Software (such
         authors and other persons or entities are collectively referred to as
         the "Company Software Authors") made his or her contribution to the
         Company Software within the scope of employment with the Company, as a
         "work made for hire," and was directed by the Company to work on the
         Company Software, or as a consultant who assigned all rights to such
         products to the Company. Except as set forth in Section 5.2(o) of the
         Company Disclosure Schedule, the Company Software and every portion
         thereof are an original creation of the Company Software Authors and do
         not contain any source code or portions of source code (including any
         "canned program") created by any persons other than the Company
         Software Authors. The Company has not, by any of its acts or omissions,
         or by acts or omissions of its affiliates, directors, officers,
         employees, agents, or representatives caused any of its proprietary
         rights in the Company Software, including copyrights, trademarks, and
         trade secrets to be transferred, diminished, or adversely affected to
         any material extent.

                  (viii)   There are no material defects in the Company's
         software products, and such products shall perform in substantial
         accordance with related documentation and promotional material supplied
         by Company, and there are no material errors in any documentation,
         specifications, manuals, user guides, promotional material, internal
         notes and memos, technical documentation, drawings, flow charts,
         diagrams, source language statements, demo disks, benchmark test
         results, and other written materials related to, associated with or
         used or produced in the development of the Company's software products.
         Except as disclosed in Section 5.2(o) of the Company Disclosure
         Schedule, computer software included in the Company Proprietary Rights
         does not contain any "back door," "time bomb," "Trojan horse," "worm,"
         "drop dead device," "virus" (as these terms are commonly used in the
         computer software industry), or

                                       30

<PAGE>   38

          other software routines designed to permit unauthorized access, to
          disable or erase software or data, or to perform any other similar
          type of functions.

                  (ix)     No government funding or university or college
         facilities were used in the development of the computer software
         programs or applications owned by the Company.

                  (x)      For the purpose of this Section 5.2(o), the following
         terms have the following definitions: (A) the term "Commercial
         Software" means packaged commercially available software programs
         generally available to the public which have been licensed to the
         Company pursuant to end-user licenses that permit the use of such
         programs without a right to modify, distribute or sublicense the same;
         (B) the term "Company Embedded Products" means software that are
         incorporated in any existing product or service of the Company; and (C)
         the term "Proprietary Rights" means (1) patents, patent applications,
         patent disclosures and inventions, (2) trademarks, service marks, trade
         dress, trade names, Internet domain names and the Company's corporate
         name (in its state of incorporation) and registrations and applications
         for registration thereof, (3) copyrights and registrations and
         applications for registration thereof, (4) mask works and registrations
         and applications for registration thereof, (5) computer software, data
         and documentation (in both source code and object code form), (6) trade
         secrets and other confidential and proprietary information (including,
         but not limited to, inventions (whether patentable or unpatentable),
         know-how and copyrightable works, (7) other confidential and
         proprietary intellectual property rights, (8) copies and tangible
         embodiments thereof (in whatever form or medium) and (9) all renewals,
         extensions, revivals and resuscitations thereof.

         (p)      AGREEMENTS, CONTRACTS AND COMMITMENTS; MATERIAL CONTRACTS.
Except as set forth in Section 5.2(p) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is a party to or is bound by:

                  (i)      any contract relating to the borrowing of money, the
         guaranty of another Person's borrowing of money, or the creation of an
         encumbrance or lien on the assets of the Company or any of its
         Subsidiaries and with outstanding obligations in excess of $500,000;

                  (ii)     any employment or consulting agreement, contract or
         commitment with any officer or director level employee or member of the
         Company's Board of Directors or any other employee who is one of the
         fifty (50) most highly compensated employees, including base salary and
         bonuses (the "Company Key Employees"), other than those that are
         terminable by the Company or any of its Subsidiaries on no more than
         thirty (30) days notice without liability or financial obligation or
         benefits generally available to employees of the Company, except to the
         extent general principles of wrongful termination law may limit the
         Company's or any of its Subsidiaries' ability to terminate employees at
         will;

                                       31

<PAGE>   39

                  (iii)    any agreement of indemnification or guaranty by the
         Company or any of its Subsidiaries not entered into in the ordinary
         course of business other than indemnification agreements between the
         Company or any of its Subsidiaries and any of its officers or directors
         in standard forms as filed by the Company with the SEC;

                  (iv)     any agreement, contract or commitment containing any
         covenant limiting the freedom of the Company or any of its Subsidiaries
         to engage in any line of business or conduct business in any
         geographical area, compete with any person or granting any exclusive
         distribution rights or limits the use or exploitation of the Company
         Intellectual Property Rights;

                  (v)      any contract for capital expenditures in excess of
         $1,000,000;

                  (vi)     any agreement, contract or commitment currently in
         force relating to the disposition or acquisition of assets not in the
         ordinary course of business; or

                  (vii)    any agreement, contract or commitment for the
         purchase of any ownership interest in any corporation, partnership,
         joint venture or other business enterprise for consideration in excess
         of $500,000, in any case, which includes all escrow and earn-out
         agreements with outstanding obligations.

                  A true and complete copy (including all material amendments)
         of each agreement, contract, obligation, promise or undertaking
         (whether written or oral and whether express or implied) to which the
         Company is a party or by which the Company or its assets is or may
         become bound (a "Company Contract"), or a summary of each oral
         contract, has been made available to Parent. Each Company Contract is
         in full force and effect. No condition exists or event has occurred
         that, (whether with or without notice or lapse of time or both, or the
         happening or occurrence of any other event) would constitute a default
         by the Company or a Subsidiary of the Company or, to the Knowledge of
         the Company, any other party thereto under, or result in a right in
         termination of, any Company Contract, except as could not, individually
         or in the aggregate, be reasonably expected to result in a Material
         Adverse Effect on the Company.

                  (q)      UNLAWFUL PAYMENTS AND CONTRIBUTIONS. To the Knowledge
         of the Company, neither the Company, any Subsidiary of the Company nor
         any of their respective directors, officers, employees or agents has,
         with respect to the businesses of the Company or its Subsidiaries, (i)
         used any funds for any unlawful contribution, endorsement, gift,
         entertainment or other unlawful expense relating to political activity;
         (ii) made any direct or indirect unlawful payment to any foreign or
         domestic government official or employee; (iii) violated or is in
         violation of any provision of the Foreign Corrupt Practices Act of
         1977, as amended; or (iv) made any bribe, rebate, payoff, influence
         payment, kickback or other unlawful payment to any Person or entity.

                  (r)      LISTINGS. The Company's securities are not listed, or
         quoted, for trading on any U.S. domestic or foreign securities
         exchange, other than the NNM.

                                       32

<PAGE>   40

                  (s)      ENVIRONMENTAL MATTERS. Except as disclosed in the
         Company SEC Reports filed prior to the date hereof, the Company and its
         Subsidiaries and the operations, assets and properties thereof are in
         material compliance with all Environmental Laws; (ii) there are no
         judicial or administrative actions, suits, proceedings or
         investigations pending or, to the Knowledge of the Company, threatened
         against the Company or any Subsidiary of the Company alleging the
         violation of any Environmental Law and neither the Company nor any
         Subsidiary of the Company has received notice from any governmental
         body or Person alleging any violation of or liability under any
         Environmental Laws, in either case which could reasonably be expected
         to result in material Environmental Costs and Liabilities; (iii) to the
         Knowledge of the Company, there are no facts, circumstances or
         conditions relating to, arising from, associated with or attributable
         to the Company or its Subsidiaries or any real property currently or
         previously owned, operated or leased by the Company or its Subsidiaries
         that could reasonably be expected to result in material Environmental
         Costs and Liabilities; and (iv) to the Knowledge of the Company,
         neither the Company nor any of its Subsidiaries has ever generated,
         transported, treated, stored, handled or disposed of any Hazardous
         Material at any site, location or facility in a manner that could
         create any material Environmental Costs and Liabilities under any
         Environmental Law, and no such Hazardous Material has been or is
         currently present on, in, at or under any real property owned or used
         by the Company or any of its Subsidiaries in a manner that could create
         any material Environmental Costs and Liabilities (including without
         limitation, containment by means of any underground or aboveground
         storage tank). For the purpose of this Section 5.2(s), the following
         terms have the following definitions: (X) "Environmental Costs and
         Liabilities" means any losses, liabilities, obligations, damages,
         fines, penalties, judgments, actions, claims, costs and expenses
         (including, without limitation, fees, disbursements and expenses of
         legal counsel, experts, engineers and consultants and the costs of
         investigation and feasibility studies, remedial or removal actions and
         cleanup activities) arising from or under any Environmental Law; (Y)
         "Environmental Laws" means any applicable federal, state, local or
         foreign law (including common law), statute, code, ordinance, rule,
         regulation or other requirement relating to the environment, natural
         resources, or public or employee health and safety; and (Z) "Hazardous
         Material" means any substance, material or waste regulated by federal,
         state or local government, including, without limitation, any
         substance, material or waste which is defined as a "hazardous waste,"
         "hazardous material," "hazardous substance," "toxic waste" or "toxic
         substance" under any provision of Environmental Law and including but
         not limited to petroleum and petroleum products.

                  (t)      TITLE TO PROPERTIES; LIENS; CONDITION OF PROPERTIES.
         The Company and its Subsidiaries have good and marketable title to, or
         a valid leasehold interest in, the real and personal property, shown on
         the most recent Company Financial Statement or acquired after the date
         thereof. None of the property owned or used by the Company or any of
         its Subsidiaries is subject to any mortgage, pledge, deed of trust,
         lien (other than for taxes not yet due and payable), conditional sale
         agreement, security title, encumbrance, or other adverse claim or
         interest of any kind. Since December 31, 2000, there has not been any
         sale, lease, or any other disposition or distribution by the Company or
         any of its Subsidiaries of any of its assets or properties material to
         the

                                       33

<PAGE>   41

         Company and its Subsidiaries, taken as a whole, except transactions in
         the ordinary course of business, consistent with past practices.

                  (u)      INSURANCE. All insurance policies (including
         "self-insurance" programs) now maintained by the Company (the "Company
         Insurance Policies") are in full force and effect, the Company is not
         in default under any of the Company Insurance Policies, and no claim
         for coverage under any of the Company Insurance Policies has been
         denied. The Company has not received any notice of cancellation or
         intent to cancel or increase or intent to increase premiums with
         respect to such insurance policies nor, to the Knowledge of the
         Company, is there any basis for any such action.

                  (v)      LABOR AND EMPLOYEE RELATIONS.

                           (i)      Except as set forth in Section 5.2(v) of the
                  Company Disclosure Schedule, (A) None of the employees of the
                  Company or any of its Subsidiaries is represented in his or
                  her capacity as an employee of such company by any labor
                  organization; (B) neither the Company nor any of its
                  Subsidiaries has recognized any labor organization nor has any
                  labor organization been elected as the collective bargaining
                  agent of any of their employees, nor has the Company or any of
                  its Subsidiaries signed any collective bargaining agreement or
                  union contract recognizing any labor organization as the
                  bargaining agent of any of their employees; and (C) to the
                  Knowledge of the Company, there is no active or current union
                  organization activity involving the employees of the Company
                  or any of its Subsidiaries, nor has there ever been union
                  representation involving employees of the Company or any of
                  its Subsidiaries.

                           (ii)     The Company has made available to Parent a
                  description of all written employment policies under which the
                  Company and each of its Subsidiaries is operating.

                           (iii)    The Company and each of its Subsidiaries is
                  in compliance with all Federal, foreign (as applicable), and
                  state laws regarding employment practices, including laws
                  relating to workers' safety, sexual harassment or
                  discrimination, except where the failure to so be in
                  compliance, individually or in the aggregate, would not have a
                  Material Adverse Effect on the Company.

                           (iv)     To the Knowledge of the Company, none of the
                  Company Key Employees has any plans to terminate his or her
                  employment with the Company or any of its Subsidiaries.

                  (w)      PERMITS. The Company and each of its Subsidiaries
         hold all licenses, permits, registrations, orders, authorizations,
         approvals and franchises that are required to permit it to conduct its
         businesses as presently conducted, except where the failure to hold
         such licenses, permits, registrations, orders, authorizations,
         approvals or franchises could not reasonably be expected to,
         individually or in the aggregate, have a Material Adverse Effect on the
         Company. All such licenses, permits, registrations, orders,
         authorizations,

                                       34

<PAGE>   42

         approvals and franchises are now, and will be after the Closing, valid
         and in full force and effect, and Surviving Corporation shall have full
         benefit of the same, except where the failure to be valid and in full
         force and effect or to have the benefit of any such license, permit,
         registration, order, authorization, approval or franchise could not
         reasonably be expected to, individually or in the aggregate, have a
         Material Adverse Effect on the Company or Surviving Corporation.
         Neither the Company nor any of its Subsidiaries has received any
         notification of any asserted present failure (or past and unremedied
         failure) by it to have obtained any such license, permit, registration,
         order, authorization, approval or franchise, except where such failure
         could not reasonably be expected to, individually or in the aggregate,
         have a Material Adverse Effect on the Company or Surviving Corporation.

                  (x)      TRANSACTIONS WITH AFFILIATES. Except as set forth in
         the Company SEC Reports filed prior to the date of this Agreement,
         since the date of Company's last proxy statement to its shareholders,
         no event has occurred that would be required to be reported by Company
         as a Certain Relationship or Related Transaction, pursuant to Item 404
         of Regulation S-K promulgated by the SEC.

                                   ARTICLE VI

                       ADDITIONAL COVENANTS AND AGREEMENTS

         6.1      CONDUCT OF BUSINESS OF THE COMPANY. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms and the Effective Time, the Company (which
for the purposes of this Section 6.1 shall include the Company and each of its
Subsidiaries) agrees, except to the extent that Parent shall otherwise consent
in writing (which consent shall not be unreasonably withheld or delayed), to
carry on its business and to cause each of its Subsidiaries to carry on its
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, and to use and cause each of its Subsidiaries to
use all commercially reasonable efforts consistent with past practices and
policies to preserve intact its present business organizations, keep available
the services of its present officers and employees and preserve its
relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with the Company or any such Subsidiaries, to
the end that the goodwill and ongoing businesses of Company and each of its
Subsidiaries be unimpaired at the Effective Time. Except as expressly provided
for by this Agreement, the Company shall not, and shall not permit any of its
Subsidiaries to, prior to the Effective Time or earlier termination of this
Agreement pursuant to its terms, without the prior written consent of Parent
(which consent shall not be unreasonably withheld or delayed):

                  (a)      Except as provided in this Agreement, accelerate,
         amend or change the period of exercisability of options or restricted
         stock, or reprice options granted under the Company Option Plans or
         authorize cash payments in exchange for any options granted under any
         of such plans;

                                       35

<PAGE>   43

                  (b)      Enter into any material partnership arrangements,
         joint development agreements or strategic alliances;

                  (c)      Except as provided in the benefit plans and
         agreements of the Company or any of its Subsidiaries listed in Section
         5.2(n)(i) of the Company Disclosure Letter, or as required by law,
         grant any severance or termination pay (i) to any executive officer or
         (ii) to any other employee except payments made in connection with the
         termination of employees who are not executive officers in amounts
         consistent with Parent's policies and past practices or pursuant to
         written agreements outstanding, or policies existing, on the date
         hereof and as previously disclosed in writing to Parent or pursuant to
         written agreements consistent with the past agreements of the Company
         or any of its Subsidiaries under similar circumstances;

                  (d)      Transfer or license to any person or entity or
         otherwise extend, amend or modify any rights to the Company
         Intellectual Property Rights (including rights to resell or relicense
         the Company Intellectual Property Rights) or enter into grants to
         future patent rights, other than on standard forms of the Company or
         any of its Subsidiaries entered into in the ordinary course of business
         consistent with past practices; PROVIDED, HOWEVER, that such standard
         forms shall provide for a non-exclusive license of Company Intellectual
         Property Rights terminable at will by the Company on no more than
         thirty days' notice.

                  (e)      Commence any material litigation other than (i) for
         the routine collection of bills, (ii) for software piracy, or (iii) in
         such cases where the Company in good faith determines that failure to
         commence suit would result in the material impairment of a valuable
         aspect of the business of the Company or any of its Subsidiaries,
         provided that the Company consults with the Parent prior to the filing
         of such a suit and keeps Parent advised of the status and details of
         such litigation (except that the Company shall not require the approval
         of, and shall not be required to consult with, Parent with respect to
         any claim, suit or proceeding by the Company against Parent or any of
         its affiliates);

                  (f)      Declare or pay any dividends on or make any other
         distributions (whether in cash, stock or property) in respect of any of
         its capital stock, or split, combine or reclassify any of its capital
         stock or issue or authorize the issuance of any other securities in
         respect of, in lieu of or in substitution for shares of capital stock
         of the Company;

                  (g)      Repurchase or otherwise acquire, directly or
         indirectly, any shares of its capital stock except from former
         employees, directors and consultants in accordance with agreements
         existing as of the date hereof and listed in Section 5.2(n)(i) of the
         Company Disclosure Letter requiring the repurchase of shares in
         connection with any termination of service to the Company or any of its
         Subsidiaries;

                  (h)      Issue, deliver, sell or authorize or propose the
         issuance, delivery, grant or sale of, any shares of its capital stock
         of any class or securities convertible into, or any subscriptions,
         rights, warrants or options to acquire, or enter into other agreements
         or commitments of any character obligating it to issue any such shares
         or other convertible

                                       36

<PAGE>   44

         securities, other than (i) the issuance of Company Shares pursuant to
         the exercise of Company stock options or warrants therefor outstanding
         as of the date of this Agreement, and (ii) Company Shares issuable to
         participants in the ESPP consistent with the terms of that Plan;

                  (i)      Cause, permit or propose any amendments to the
         Company's Certificate of Incorporation or Bylaws;

                  (j)      Sell, lease, license, encumber or otherwise dispose
         of any of the properties or assets of the Company or any of its
         Subsidiaries, except in the ordinary course of business consistent with
         past practice;

                  (k)      Incur any material indebtedness for borrowed money
         (other than ordinary course trade payables or pursuant to existing
         credit facilities in the ordinary course of business) or guarantee any
         such prohibited indebtedness or issue or sell any debt securities or
         warrants or rights to acquire debt securities of the Company or any of
         its Subsidiaries or guarantee any debt securities of others;

                  (l)      Except as required by law, adopt or amend any Company
         Scheduled Plan or increase the salaries or wage rates of any of its
         employees (except for wage increases in the ordinary course of business
         and consistent with past practices), including but not limited to (but
         without limiting the generality of the foregoing), the adoption or
         amendment of any stock purchase or option plan, the entering into of
         any employment contract or the payment of any special bonus or special
         remuneration to any director or employee;

                  (m)      Revalue any of the assets of the Company or any of
         its Subsidiaries, including without limitation writing down the value
         of inventory, writing off notes or accounts receivable, other than in
         the ordinary course of business consistent with past practice;

                  (n)      Except as set forth in the Company Disclosure
         Schedule, pay, discharge or satisfy in an amount in excess of $100,000
         (in any one case) or $250,000 (in the aggregate), any claim, liability
         or obligation (absolute, accrued, asserted or unasserted, contingent or
         otherwise), including, without limitation, under any employment
         contract or with respect to any bonus or special remuneration, other
         than the payment, discharge or satisfaction in the ordinary course of
         business of liabilities of the type reflected or reserved against in
         the Company Financial Statements (or reflected in the notes thereto);

                  (o)      Except as required by applicable Tax law, make or
         change any material election in respect of Taxes, adopt or change in
         any material respect any accounting method in respect of Taxes, file
         any material Return or any amendment to a material Return, enter into
         any closing agreement, settle any claim or assessment in respect of
         Taxes (except settlements effected solely through payment of immaterial
         sums of money), or consent to any extension or waiver of the limitation
         period applicable to any claim or assessment in respect of Taxes; or

                                       37

<PAGE>   45

                  (p)      Take, or agree in writing or otherwise to take, any
         of the actions described in Section 6.1(a) through (o) above, or any
         action which would cause or would be reasonably likely to cause any of
         the conditions to the Merger set forth in Sections 7.1 or 7.3, not to
         be satisfied.

         6.2      NO SOLICITATION.

                  (a)      From and after the date of this Agreement until the
         Effective Time or the earlier termination of this Agreement in
         accordance with its terms, the Company will not, and will not permit
         any of its Subsidiaries or its or their respective directors, officers,
         investment bankers, affiliates, representatives and agents to, (i)
         solicit, initiate, or encourage (including by way of furnishing
         unsolicited information), or take any other action to facilitate, any
         inquiries or proposals that constitute, or could reasonably be expected
         to lead to, any Company Acquisition Proposal, or (ii) engage in, or
         enter into, any negotiations or discussions concerning any Company
         Acquisition Proposal. Notwithstanding the foregoing, in the event that,
         notwithstanding compliance with the preceding sentence, the Company
         receives a Company Acquisition Proposal that is or may reasonably be
         expected to lead to a Company Superior Proposal, the Company may, to
         the extent that the Board of Directors of the Company determines in
         good faith (in reliance on the opinion of its outside counsel) that
         such action would, in the absence of the foregoing proscriptions, be
         required by its fiduciary duties, participate in discussions regarding
         any Company Acquisition Proposal in order to be informed and make a
         determination with respect thereto. In such event, the Company shall,
         (i) promptly inform Parent of the material terms and conditions of such
         Company Acquisition Proposal, including the identity of the Person
         making such Company Acquisition Proposal and (ii) promptly keep Parent
         informed of the status including any material change to the terms of
         any such Company Acquisition Proposal. As used herein, the term
         "Company Acquisition Proposal" shall mean any bona fide inquiry,
         proposal or offer relating to any (i) merger, consolidation, business
         combination, or similar transaction involving the Company or any
         Subsidiary of the Company, (ii) sale, lease or other disposition,
         directly or indirectly, by merger, consolidation, share exchange or
         otherwise, of any assets of the Company or any Subsidiary of the
         Company in one or more transactions, (iii) issuance, sale, or other
         disposition of (including by way of merger, consolidation, share
         exchange or any similar transaction) securities (or options, rights or
         warrants to purchase such securities, or securities convertible into
         such securities) of the Company or any Subsidiary of the Company, (iv)
         liquidation, dissolution, recapitalization or other similar type of
         transaction with respect to the Company or any Subsidiary of the
         Company, (v) tender offer or exchange offer for Company securities; in
         the case of (i), (ii), (iii), (iv) or (v) above, which transaction
         would result in a third party (or its shareholders) acquiring more than
         fifty percent (50%) of the voting power of the Company or the assets
         representing more than fifty percent (50%) of the net income, net
         revenue or assets of the Company on a consolidated basis, (vi)
         transaction which is similar in form, substance or purpose to any of
         the foregoing transactions, or (vii) public announcement of an
         agreement, proposal, plan or intention to do any of the foregoing,
         PROVIDED, HOWEVER, that the term "Company Acquisition Proposal" shall
         not include the

                                       38

<PAGE>   46

         Merger and the transactions contemplated thereby. For purposes of this
         Agreement, "Company Superior Proposal" means any offer not solicited
         after the date of this Agreement by the Company, or by other persons in
         violation of the first sentence of this Section 6.2(a), and made by a
         third party to consummate a tender offer, exchange offer, merger,
         consolidation or similar transaction which would result in such third
         party (or its shareholders) owning, directly or indirectly, more than
         fifty percent (50%) of the Company Shares then outstanding (or of the
         surviving entity in a merger) or all or substantially all of the assets
         of Company and its Subsidiaries, taken together, and otherwise on terms
         which the Board of Directors of the Company determines in good faith
         (based on its consultation with a financial advisor of nationally
         recognized reputation and considering such other matters that it deems
         relevant) would, if consummated, result in a transaction more favorable
         to the Company's shareholders from a financial point of view than the
         Merger and, taking into account, in the reasonable good faith judgment
         of the Board of Directors of the Company after consultation with its
         financial advisor, the availability to the person or entity making such
         Company Superior Proposal of the financial means to conclude such
         transaction. The Company will immediately cease any and all existing
         activities, discussions or negotiations with any parties conducted
         heretofore with respect to any of the foregoing.

                  (b)      Neither the Board of Directors of the Company nor any
         committee thereof shall, except as required by their fiduciary duties
         as determined in good faith (in reliance on the opinion of its outside
         counsel), (i) withdraw or modify, or propose to withdraw or modify, in
         a manner adverse to Parent or Merger Sub, the approval or
         recommendation by the Board of Directors of the Company or such
         committee of this Agreement or the Merger, (ii) approve, recommend, or
         otherwise support or endorse any Company Acquisition Proposal, or (iii)
         cause the Company to enter into any letter of intent, agreement in
         principle, acquisition agreement or similar agreement with respect to
         any Company Acquisition Proposal. Nothing contained in this Section 6.2
         shall prohibit the Company from taking and disclosing to its
         shareholders a position contemplated by Rule 14d-9 or 14e-2 promulgated
         under the Exchange Act or from making any disclosure to the Company's
         shareholders if, in the good faith judgment of the Board of Directors
         of the Company (in reliance upon the opinion of its outside counsel),
         such disclosure is necessary for the Board of Directors to comply with
         its fiduciary duties under applicable law; PROVIDED, HOWEVER, that,
         except as required by their fiduciary duties as determined in good
         faith and in reliance upon the opinion of its outside counsel, neither
         the Company nor its Board of Directors nor any committee thereof shall
         withdraw or modify, or propose publicly to withdraw or modify, its
         position with respect to this Agreement or the Merger or approve or
         recommend or propose publicly to approve or recommend, a Company
         Acquisition Proposal.

                  (c)      In addition to the obligations of the Company set
         forth in paragraphs (a) and (b) of this Section 6.2, the Company will
         promptly (and in any event within twenty-four (24) hours) advise
         Parent, orally and in writing, if any Company Acquisition Proposal is
         made or, to its Knowledge, proposed to be made or any information or
         access to properties, books or records of the Company is requested in
         connection with a Company

                                       39

<PAGE>   47

         Acquisition Proposal, the principal terms and conditions of any such
         Company Acquisition Proposal or potential Company Acquisition Proposal
         or inquiry (and will disclose any written materials received by the
         Company in connection with such Company Acquisition Proposal, potential
         Company Acquisition Proposal or inquiry) and the identity of the party
         making such Company Acquisition Proposal, potential Company Acquisition
         Proposal or inquiry. The Company will keep Parent advised of the status
         and details (including amendments and proposed amendments) of any such
         request or Company Acquisition Proposal.

         6.3      MEETING OF SHAREHOLDERS.

                  (a)      Promptly after the date hereof, the Company shall
         take all action necessary in accordance with the GBCC and its Articles
         of Incorporation and by-laws to convene a meeting of shareholders
         ("Company Shareholders Meeting") to be held as promptly as practicable
         after the S-4 Registration Statement is declared effective by the SEC
         for the purposes of voting upon this Agreement and the Merger. Neither
         the Board of Directors of the Company nor any committee thereof shall,
         except as required by their fiduciary duties as determined in good
         faith (in reliance on the opinion of its outside counsel), withdraw or
         modify, or propose to withdraw or modify, in a manner adverse to
         Parent, the approval or recommendation by the Board of Directors of the
         Company or such committee of this Agreement or the Merger. Nothing
         contained in this Section 6.3(a) shall prohibit the Company from making
         any disclosure to the Company's shareholders if, in the good faith
         judgment of the Board of Directors of the Company (in reliance upon the
         opinion of its outside counsel), such disclosure is necessary for the
         Board of Directors to comply with its fiduciary duties under applicable
         law. The Company shall deliver to Parent, concurrent with the execution
         and delivery of this Agreement, the Voting Agreement executed by Szlam.

                  (b)      If necessary, Parent shall take all action necessary
         in accordance with the DGCL and its Certificate of Incorporation and
         by-laws to convene a meeting of stockholders (the "Parent Stockholders
         Meeting") to be held as promptly as practicable after the S-4
         Registration Statement is declared effective by the SEC for the
         purposes of voting upon this Agreement and the Merger. Neither the
         Board of Directors of Parent nor any committee thereof shall, except as
         required by their fiduciary duties as determined in good faith (in
         reliance on the opinion of its outside counsel), withdraw or modify, or
         propose to withdraw or modify, in a manner adverse to the Company, the
         approval or recommendation by the Board of Directors of Parent or such
         committee of this Agreement or the Merger. Nothing contained in this
         Section 6.3(b) shall prohibit Parent from making any disclosure to
         Parent's stockholders if, in the good faith judgment of the Board of
         Directors of Parent (in reliance upon the opinion of its outside
         counsel), such disclosure is necessary for the Board of Directors to
         comply with its fiduciary duties under applicable law.

         6.4      REGISTRATION STATEMENT. Parent will, as promptly as
practicable, prepare and file with the SEC a registration statement on Form S-4
(the "S-4 Registration Statement"), containing

                                       40

<PAGE>   48

a proxy statement/prospectus and a form of proxy, in connection with the
registration under the Securities Act of the Parent Shares issuable upon
conversion of the Company Shares and the other transactions contemplated hereby.
The Company and Parent will, as promptly as practicable, prepare and file with
the SEC a proxy statement that will be the same proxy statement/prospectus
contained in the S-4 Registration Statement and a form of proxy, in connection
with the vote of the Company's (and Parent's, if necessary) shareholders, or
stockholders, as applicable, with respect to the Merger (such proxy
statement/prospectus, together with any amendments thereof or supplements
thereto, in each case in the form or forms mailed to the Company's (and
Parent's, if necessary) shareholders, or stockholders, as applicable, is herein
called the "Proxy Statement"). The Company and Parent will, and will cause their
accountants and lawyers to, use their reasonable efforts to have or cause the
S-4 Registration Statement declared effective as promptly as practicable
thereafter, including, without limitation, causing their accountants to deliver
necessary or required instruments such as opinions, consents and certificates,
and will take any other action required or necessary to be taken under federal
or state securities laws or otherwise in connection with the registration
process, it being understood and agreed that Morris, Manning & Martin, LLP,
counsel to the Company, will render the tax opinion referred to in Section 6.12
below on the date the preliminary Proxy Statement is first filed with the SEC.
The Company and Parent (if necessary) will use its reasonable efforts to cause
the Proxy Statement to be mailed to its shareholders, or stockholders, as
applicable, at the earliest practicable date and the Company and Parent (if
necessary) shall each use its commercially reasonable efforts to hold the
Company Shareholders Meeting and the Parent Stockholders Meeting, as the case
may be, as soon as practicable after the S-4 Registration Statement is declared
effective by the SEC. Parent shall also take any action required to be taken
under state blue sky or other securities laws in connection with the issuance of
Parent Shares in the Merger.

         6.5      REASONABLE EFFORTS. The Parties shall: (a) promptly make their
respective filings and thereafter make any other required submissions under all
applicable laws with respect to the Merger and the other transactions
contemplated hereby; and (b) use their reasonable efforts to promptly take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable.

         6.6      ACCESS TO INFORMATION. Upon reasonable notice, Parent, on the
one hand, and the Company, on the other, shall (and shall cause each of their
Subsidiaries to) afford to officers, employees, counsel, accountants and other
authorized representatives of the other such party (the "Authorized
Representatives") reasonable access, during normal business hours throughout the
period prior to the Effective Time, to their properties, assets, books and
records and, during such period, shall (and shall cause each of their
Subsidiaries to) furnish promptly to such Authorized Representatives all
information concerning their business, properties, assets and personnel as may
reasonably be requested for purposes of appropriate and necessary due diligence,
provided that no investigation pursuant to this Section 6.6 shall affect or be
deemed to modify any of the representations or warranties made by the Parties.
The Parties each agree to treat (and cause their Authorized Representatives to
treat) any and all information provided pursuant to this Section 6.6 in strict
compliance with the terms of that certain Confidentiality Agreement, entered

                                       41

<PAGE>   49

by and between the Company and Parent, dated March 30, 2001 (the
"Confidentiality Agreement").

         6.7      PUBLICITY. The Parties agree that they will consult with each
other concerning any proposed press release or public announcement pertaining to
the Merger in order to agree upon the text of any such press release or the
making of such public announcement, which agreement shall not be unreasonably
withheld, except as may be required by applicable law or by obligations pursuant
to any listing agreement with a national securities exchange or national
automated quotation system, in which case the party proposing to issue such
press release or make such public announcement shall use reasonable efforts to
consult in good faith with the other party before issuing any such press release
or making any such public announcement.

         6.8      AFFILIATES OF THE COMPANY AND PARENT. The Company has
identified the Persons listed on Section 6.8 of the Company Disclosure Schedule
as "affiliates" of the Company for purposes of Rule 145 promulgated under the
Securities Act (each, a "Company Affiliate") and the Company will use its
reasonable efforts to obtain as promptly as practicable from each Company
Affiliate written agreements in the form attached hereto as EXHIBIT B (the
"Company Affiliate Letter") that such Company Affiliate will not sell, pledge,
transfer or otherwise dispose of any Parent Shares issued to such Company
Affiliate pursuant to the Merger, except in compliance with Rule 145 promulgated
under the Securities Act or an exemption from the registration requirements of
the Securities Act.

         6.9      MAINTENANCE OF INSURANCE. Between the date hereof and through
the Effective Time, the Company will maintain in full force and effect all of
its and its Subsidiaries presently existing policies of insurance or insurance
comparable to the coverage afforded by such policies.

         6.10     REPRESENTATIONS AND WARRANTIES. Each of the Company and Parent
shall give prompt notice to the other of any circumstances that would cause any
of its representations and warranties set forth in Section 5.1 or 5.2, as the
case may be, that are qualified as to materiality or Material Adverse Effect not
to be true and correct, and those that are not so qualified not to be true and
correct in all material respects, in each case at and as of the Effective Time.

         6.11     FILINGS; OTHER ACTION. Subject to the terms and conditions
herein provided, the Parties shall: (a) promptly make their respective filings
and thereafter make any other required submissions under the HSR Act, the
Securities Act and the Exchange Act, and comparable foreign laws, rules and
regulations, with respect to the Merger; (b) cooperate in the preparation of
such filings or submissions under the HSR Act and comparable foreign laws, rules
and regulations; and (c) use reasonable efforts promptly to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement as
soon as practicable. Notwithstanding anything to the contrary contained herein,
nothing in this Agreement will require Parent, whether pursuant to an order of
the Federal Trade Commission or the United States Department of Justice or
otherwise, to dispose of any assets, lines of business or equity interests in
order to obtain the consent of the Federal Trade Commission or the United States
Department of Justice to the transactions contemplated by this Agreement.

                                       42

<PAGE>   50

         6.12     TAX-FREE REORGANIZATION TREATMENT. Prior to the Effective
Time, the Parties shall use their commercially reasonable efforts to cause the
Merger to be treated as a reorganization within the meaning of Section 368(a) of
the Code and shall not knowingly take or fail to take any action which action or
failure to act would jeopardize the qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code. So long as the
Merger qualifies as a reorganization described in Section 368(a) of the Code,
each of Parent, Merger Sub, and the Company (i) shall not file any Return or
take any position inconsistent with the treatment of the Merger as a
reorganization described in Section 368(a) of the Code, and (ii) shall comply
with the recordkeeping and information-reporting requirements set forth in
Treas. Reg. Section 1.368-3. Furthermore, prior to the Effective Time, the
Parties shall use their commercially reasonable efforts to obtain the tax
opinions specified in Section 7.1(f) of the Agreement.

         6.13     COMPANY EMPLOYEE STOCK PURCHASE PLAN. The Company shall not
commence any "purchase periods" under the ESPP after April 1, 2001, and shall
apply all amounts deducted and withheld thereunder to purchase Company Shares in
accordance with the provisions thereof.

         6.14     NASDAQ LISTING. Parent agrees to authorize for listing on the
NNM the shares of Parent Common Stock issuable in connection with the Merger,
upon official notice of issuance.

         6.15     INDEMNIFICATION.

                  (a)      From and after the Effective Time, the Surviving
         Corporation will fulfill and honor in all respects the obligations of
         the Company to indemnify and hold harmless the Company's and its
         Subsidiaries' present and former directors, officers, employees, and
         agents and their heirs, executors and assigns (collectively, the
         "Indemnified Personnel"). The Certificate of Incorporation and by-laws
         of the Surviving Corporation will contain provisions with respect to
         indemnification and elimination of liability for monetary damages at
         least as favorable to the Indemnified Personnel as those set forth in
         the current Articles of Incorporation and by-laws of the Company, and
         for a period of six years from the Effective Time, those provisions
         will not be repealed or amended or otherwise modified in any manner
         that would adversely affect the rights thereunder of the Indemnified
         Personnel, except to the extent, if any, that such modification is
         required by applicable law.

                  (b)      For a period of six years after the Effective Time,
         the Surviving Corporation will either (i) maintain in effect, if
         available, directors' and officers' liability insurance covering those
         persons who are currently covered by the Company's directors' and
         officers' liability insurance policy on terms comparable to those
         applicable to the current directors and officers of the Company;
         PROVIDED, HOWEVER, that in no event will the Surviving Corporation be
         required to expend in excess of 150% of the annual premium currently
         paid by the Company for such coverage (or such coverage as is available
         for such 150% of such annual premium), or (ii) if mutually agreed
         between the Company and the Surviving Corporation, purchase a
         directors' and officers' liability insurance policy on terms comparable
         to those applicable to the current directors and officers of the
         Company covering all periods prior to the Effective Time.

                                       43

<PAGE>   51

         6.16     AUDITORS' LETTERS. The Company shall use its best efforts to
cause to be delivered to Parent a letter of Arthur Andersen LLP, independent
auditors to the Company, dated a date within two business days before the date
on which the Registration Statement becomes effective, and addressed to the
Company, in form and substance reasonably satisfactory to Parent and customary
in scope and substance for letters delivered by independent public accountants
in connection with registration statements similar to the Registration
Statement. The Parent shall use its best efforts to cause to be delivered to the
Company a letter of KPMG, LLP, independent auditors to Parent, dated a date
within two business days before the date on which the Registration Statement
becomes effective, and addressed to Parent, in form and substance reasonably
satisfactory to the Company and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.

         6.17     SALE OF COMPANY SOFTWARE PRODUCTS. Concurrently with the
execution and delivery of this Agreement, Parent and the Company have entered
into a Software Distribution Agreement in the form attached as EXHIBIT C hereto
(the "Software Distribution Agreement") pursuant to which the Company will grant
Parent a license to market, sell, distribute, license and sublicense certain
software products sold by the Company on the terms specified in the Software
Distribution Agreement.

         6.18     ISSUANCE OF OPTION GRANTS. Promptly after the Effective Time,
Parent shall grant options to purchase shares of Parent Common Stock
representing 13% of the aggregate amount of Parent Shares issued pursuant to the
conversion rights contained in Section 4.1(a) to persons serving as employees of
the Company immediately prior to the Effective Time. These options will have an
exercise price per share equal to the closing sale price per share of the Parent
Common Stock as reported on the NNM on the trading day immediately prior to the
date of grant of the options, shall vest in three equal installments with the
first installment vesting on the date of grant and the second and third
installments vesting on the second and third annual anniversaries of the date of
grant, and shall otherwise be subject to such terms and conditions commonly
provided under Parent's 2001 Stock Incentive Plan.

         6.19     SELF TENDER OFFER PROHIBITION. Parent shall not commence or
otherwise engage in a "self tender offer" pursuant to Section 13e-4 of the
Exchange Act prior to the Closing Date.

                                  ARTICLE VII

                                   CONDITIONS

         7.1      CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each Party to consummate the Merger are subject to the
satisfaction or waiver by each of the Parties of the following conditions:

                  (a)      this Agreement and the Merger shall have been
         approved and adopted by the requisite vote under applicable law of the
         shareholders of the Company and stockholders of Parent (if necessary);

                                       44

<PAGE>   52

                  (b)      the SEC shall have declared the S-4 Registration
         Statement effective; no stop order suspending the effectiveness of the
         S-4 Registration Statement or any part thereof shall have been issued
         and no proceeding for that purpose, and no similar proceeding in
         respect of the Proxy Statement, shall have been initiated or threatened
         in writing by the SEC; and all requests for additional information on
         the part of the SEC shall have been complied with to the reasonable
         satisfaction of the Parties;

                  (c)      no judgment, order, decree, statute, law, ordinance,
         rule or regulation, entered, enacted, promulgated, enforced or issued
         by any court or other Governmental Entity of competent jurisdiction or
         other legal restraint or prohibition preventing the consummation of the
         Merger or making the Merger illegal (collectively, "Restraints") shall
         be in effect, and there shall not be pending any suit, action or
         proceeding by any Governmental Entity preventing the consummation of
         the Merger; PROVIDED, HOWEVER, that each of the Parties shall have used
         reasonable efforts to prevent the entry of such Restraints and to
         appeal as promptly as possible any such Restraints that may be entered;

                  (d)      the waiting period(s) under the HSR Act and all
         applicable material foreign antitrust, competition and merger laws, if
         any, shall have expired or been terminated;

                  (e)      the Parent Shares issuable to shareholders and other
         securityholders of the Company pursuant to this Agreement shall have
         been authorized for listing on the NNM upon official notice of
         issuance; and

                  (f)      Parent and the Company shall each have received
         written opinions from their respective tax counsel (Katten Muchin Zavis
         and Morris, Manning & Martin, LLP, respectively), in form and substance
         reasonably satisfactory to them, to the effect that for federal income
         tax purposes the Merger will constitute a reorganization within the
         meaning of Section 368(a) of the Code and such opinions shall not have
         been withdrawn; provided, however, that if the counsel to either Parent
         or Company does not render such opinion, this condition shall
         nonetheless be deemed to be satisfied with respect to such Party if
         counsel to the other Party renders such opinion to such Party. The
         Parties to this Agreement agree to make such reasonable representations
         as requested by such counsel for the purpose of rendering such
         opinions.

         7.2      CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company to consummate the Merger are subject to the fulfillment at or
prior to the Effective Time of the following conditions, any or all of which may
be waived in whole or in part by the Company to the extent permitted by
applicable law:

                  (a)      the representations and warranties of Parent set
         forth in Section 5.1 that are qualified as to materiality or Material
         Adverse Effect shall be true and correct and those that are not so
         qualified shall be true and correct in all material respects, in each
         case as of the date of this Agreement, and as of the Effective Time
         with the same force and effect as if made on and as of the Effective
         Time (except to the extent expressly made as of an earlier date, in
         which case as of such date), in each case except as permitted or
         contemplated by this Agreement (it being understood that for purposes
         of determining the

                                       45

<PAGE>   53

         accuracy of such representations and warranties any update or
         modification to the Parent's Disclosure Schedule made or purported to
         have been made without the Company's written consent thereto shall be
         disregarded);

                  (b)      Parent shall have performed or complied in all
         material respects with its agreements and covenants required to be
         performed or complied with under this Agreement as of or prior to the
         Effective Time; and

                  (c)      Parent shall have delivered to the Company a
         certificate to the effect that each of the conditions specified in
         Section 7.1 (as it relates to Parent) and clauses (a) and (b) of this
         Section 7.2 has been satisfied in all respects.

         7.3      CONDITIONS TO THE OBLIGATIONS OF PARENT. The obligation of
Parent to consummate the Merger is subject to the fulfillment at or prior to the
Effective Time of the following conditions, any or all of which may be waived in
whole or in part by Parent to the extent permitted by applicable law:

                  (a)      the representations and warranties of the Company set
         forth in Section 5.2 that are qualified as to materiality or Material
         Adverse Effect, or in Sections 5.2(a), (b) or (d) shall be true and
         correct and those that are not so qualified shall be true and correct
         in all material respects, in each case as of the date of this
         Agreement, and as of the Effective Time with the same force and effect
         as if made on and as of the Effective Time (except to the extent
         expressly made as of an earlier date, in which case as of such date),
         in each case except as permitted or contemplated by this Agreement (it
         being understood that for purposes of determining the accuracy of such
         representations or warranties any update or modifications to the
         Company's Disclosure Schedule made or purported to have been made
         without Parent's written consent thereto shall be disregarded);

                  (b)      the Company shall have performed or complied with in
         all material respects its agreements and covenants required to be
         performed or complied with under this Agreement as of or prior to the
         Effective Time;

                  (c)      the Company shall have delivered to Parent a
         certificate of its Chief Executive Officer and Chief Financial Officer
         to the effect that each of the conditions specified in Section 7.1 (as
         it relates to the Company) and clauses (a) and (b) of this Section 7.3
         has been satisfied in all respects;

                  (d)      to the extent the option agreement or option plan
         governing any Company Option does not currently permit the Company to
         take any of the actions contemplated by Section 4.1(c) hereof, the
         Company shall have entered into agreements with the holders of such
         Company Options which allow the Company to take the actions
         contemplated by Section 4.1(c) hereof, which agreements shall be in
         form and substance reasonably acceptable to Parent; and

                  (e)      the Company shall have received all written consents,
         assignments, waivers, authorizations or other certificates necessary to
         provide for the continuation in full force

                                       46

<PAGE>   54

         and effect of any and all material contracts and leases of the Company
         and for the Company to consummate the transactions contemplated hereby.

                                  ARTICLE VIII

                                   TERMINATION

         8.1      TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, before or after gaining the requisite approval of the shareholders of the
Company and the stockholders of Parent (if necessary), by the mutual written
consent of the Company and Parent.

         8.2      TERMINATION BY EITHER THE COMPANY OR PARENT. This Agreement
may be terminated and the Merger may be abandoned by action of the Board of
Directors of either the Company or Parent if:

                  (a)      the Merger shall not have been consummated by
         December 31, 2001; PROVIDED, HOWEVER, that the right to terminate this
         Agreement under this Section 8.2(a) shall not be available to any party
         whose failure to fulfill any obligation under this Agreement has been
         the principal cause of or resulted in the failure of the Merger to
         occur on or before such date and such action or failure to act
         constitutes a material breach of this Agreement;

                  (b)      if any Restraint shall be in effect and shall have
         become final and nonappealable;

                  (c)      at the duly held Company Shareholders Meeting
         (including any adjournments thereof), the requisite approval of the
         Company's shareholders shall not have been obtained; PROVIDED, HOWEVER,
         that the Company's right to terminate this Agreement under this Section
         8.2(c) shall not be available to the Company if the Company has not
         complied with its obligations under Sections 6.2 and 6.3(a); or

                  (d)      if necessary, at the duly held Parent Stockholders
         Meeting (including any adjournments thereof) the requisite approval of
         Parent's stockholders shall not have been obtained; PROVIDED, HOWEVER,
         that Parent's right to terminate this Agreement under this Section
         8.2(d) shall not be available to Parent if Parent has not complied with
         its obligations under Section 6.3(b).

         8.3      TERMINATION BY THE COMPANY. This Agreement may be terminated
by the Company upon written notice to Parent and the Merger may be abandoned at
any time prior to the Effective Time, before or after the approval by holders of
the Company Shares, by action of the Board of Directors of the Company, if:

                  (a)      Parent shall have breached or failed to perform any
         of the representations, warranties, covenants or other agreements
         contained in this Agreement, or if any representation or warranty shall
         have become untrue, in either case such that (i) the

                                       47

<PAGE>   55

         conditions set forth in Section 7.2(a) or (b) would not be satisfied as
         of the time of such breach or as of such time as such representation or
         warranty shall have become untrue and (ii) such breach or failure to be
         true has not been or is incapable of being cured within twenty (20)
         business days following receipt by Parent of notice of such failure to
         comply;

                  (b)      the Parent Stockholders Meeting is necessary, the
         Board of Directors of Parent or any committee thereof, shall have
         withdrawn or modified in a manner adverse to the Company its approval
         or recommendation of the Merger or this Agreement, or Parent shall have
         failed to include in the Proxy Statement the recommendation of the
         Board of Directors of Parent in favor of approval of the Merger and
         this Agreement; or

                  (c)      on any date after the date the S-4 Registration
         Statement is declared effective by the SEC, but prior to the date of
         the Company Shareholders Meeting, if as of the date on which notice of
         termination pursuant to this Section 8.3(c) is given, the Parent Share
         Rolling Average shall be less than $1.00.

         8.4      TERMINATION BY PARENT. This Agreement may be terminated by
Parent upon written notice to the Company and the Merger may be abandoned at any
time prior to the Effective Time, before or after any action of the Board of
Directors of Parent, if:

                  (a)      the Company shall have breached or failed to perform
         any of the representations, warranties, covenants or other agreements
         contained in this Agreement, or if any representation or warranty shall
         have become untrue, in either case such that (i) the conditions set
         forth in Section 7.3(a) or (b) would not be satisfied as of the time of
         such breach or as of such time as such representation or warranty shall
         have become untrue and (ii) such breach or failure to be true has not
         been or is incapable of being cured within twenty (20) business days
         following receipt by the breaching party of notice of such failure to
         comply;

                  (b)(i)   the Board of Directors of the Company or any
         committee thereof, shall have withdrawn or modified in a manner adverse
         to Parent its approval or recommendation of the Merger or this
         Agreement, (ii) the Company shall have failed to include in the Proxy
         Statement the recommendation of the Board of Directors of the Company
         in favor of approval of the Merger and this Agreement, (iii) in
         connection with a Rule 14d-9 disclosure, the Board of Directors of the
         Company shall have taken any action other than a rejection of a Rule
         14d-9 proposal, (iv) the Board of Directors of the Company or any
         committee thereof shall have recommended any Company Acquisition
         Proposal, (v) the Company or any of its officers or directors shall
         have entered into discussions or negotiations in violation of Section
         6.2, (vi) the Board of Directors of the Company or any committee
         thereof shall have resolved to do any of the foregoing or (vii) any
         Company Acquisition Proposal is consummated or an agreement with
         respect to any Company Acquisition Proposal is signed; or

                  (c)      if Szlam has breached the Voting Agreement in any
         material respect, or if the Voting Agreement has been determined to be
         unenforceable.

                                       48

<PAGE>   56

         8.5      EFFECT OF TERMINATION; TERMINATION FEE.

                  (a)      Except as set forth in this Section 8.5, in the event
         of termination of this Agreement by either Parent or the Company as
         provided in this Article VIII, this Agreement shall forthwith become
         void and there shall be no liability or obligation on the part of the
         Parties or their respective affiliates, officers, directors or
         shareholders except (x) with respect to the treatment of confidential
         information pursuant to Section 6.6, the payment of expenses pursuant
         to Section 9.1, and Article IX generally, (y) to the extent that such
         termination results from the willful breach of a Party of any of its
         representations or warranties, or any of its covenants or agreements or
         (z) with respect to any intentional or knowing misrepresentations in
         connection with or pursuant to this Agreement or the transactions
         contemplated hereby.

                  (b)      In the event that (i) this Agreement is terminated by
         either the Company or Parent (x) pursuant to Section 8.2(a) due to the
         Company Shareholders Meeting not occurring as a result of a Company
         Acquisition Proposal or (y) pursuant to Section 8.2(c), or (ii) this
         Agreement is terminated by Parent pursuant to Sections 8.4(a), 8.4(b)
         or 8.4(c), then the Company shall promptly, but in no event later than
         the date of such termination, pay Parent a fee equal to $2,000,000 (the
         "Termination Fee"), payable by wire transfer of same day funds. The
         Company acknowledges that the agreements contained in this Section
         8.5(b) are an integral part of the transactions contemplated by this
         Agreement, and that, without these agreements, Parent would not enter
         into this Agreement, and accordingly, if the Company fails promptly to
         pay the amount due pursuant to this Section 8.5(b), and, in order to
         obtain such payment, Parent commences a suit which results in a
         judgment against the Company for the fee set forth in this Section
         8.5(b), the Company shall pay to Parent its costs and expenses
         (including reasonable attorneys' fees and expenses) in connection with
         such suit, together with interest on the amount of the fee at the prime
         rate of Citibank, N.A. in effect on the date such payment was required
         to be made.

                  (c)      In the event that this Agreement is terminated by the
         Company pursuant to Sections 8.3(a) or 8.3(b), then Parent shall
         promptly, but in no event later than the date of such termination, pay
         the Company a fee equal to the Termination Fee, payable by wire
         transfer of same day funds. Parent acknowledges that the agreements
         contained in this Section 8.5(c) are an integral part of the
         transactions contemplated by this Agreement, and that, without these
         agreements, the Company would not enter into this Agreement, and
         accordingly, if Parent fails promptly to pay the amount due pursuant to
         this Section 8.5(c), and, in order to obtain such payment, the Company
         commences a suit which results in a judgment against Parent for the fee
         set forth in this Section 8.5(b), Parent shall pay to the Company its
         costs and expenses (including reasonable attorneys' fees and expenses)
         in connection with such suit, together with interest on the amount of
         the fee at the prime rate of Citibank, N.A. in effect on the date such
         payment was required to be made.

                                       49

<PAGE>   57

                  (d)      In the event both Parent and the Company would
         otherwise be entitled to receive the Termination Fee under this Section
         8.5 in connection with the termination of this Agreement, neither party
         shall be required to make any payment under this Section 8.5.

                  (e)      If this Agreement is terminated under circumstances
         in which Parent or the Company is entitled to receive the Termination
         Fee, (i) the obligation to pay the Termination Fee shall survive the
         termination of this Agreement and (ii) the payment of the Termination
         Fee shall be the sole and exclusive remedy available to Parent or the
         Company, as applicable, except in the event of (A) a willful breach by
         the defaulting party of any provision of this Agreement or (B) an
         intentional or knowing misrepresentation in connection with this
         Agreement or the transactions contemplated hereby, in which event the
         party entitled to the Termination Fee shall have all rights, powers and
         remedies against the other party that may be available at law or in
         equity. All rights, powers and remedies provided under this Agreement
         or otherwise available in respect hereof at law or in equity shall be
         cumulative and not alternative, and the exercise of any such right,
         power or remedy by any Party shall not preclude the simultaneous or
         later exercise of any other such right, power or remedy by such Party.

                                   ARTICLE IX

                            MISCELLANEOUS AND GENERAL

         9.1      PAYMENT OF EXPENSES. Whether or not the Merger shall be
consummated, each Party shall pay its own expenses incident to preparing for,
entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby (the "Transaction Expenses").

         9.2      NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in Sections 5.1 and 5.2 hereof shall not
survive beyond the Effective Time or a termination of this Agreement, except to
the extent a willful breach of such representation or intentional or knowing
misrepresentation formed the basis for such termination. This Section 9.2 shall
not limit any covenant or agreement of the Parties which by its terms
contemplates performance after the Effective Time or after termination of this
Agreement pursuant to Article VIII, including the payment of any Termination
Fee.

         9.3      MODIFICATION OR AMENDMENT. Subject to the applicable
provisions of the DGCL and GBCC, at any time prior to the Effective Time, the
Parties, by resolution of their respective Board of Directors, may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective Parties; provided, however, that after
approval of the Merger by the shareholders of the Company is obtained, no
amendment which requires further shareholder approval shall be made without such
approval of shareholders.

         9.4      WAIVER OF CONDITIONS. The conditions to each of the Parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.

                                       50

<PAGE>   58

         9.5      COUNTERPARTS. For the convenience of the Parties, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.

         9.6      GOVERNING LAW; JURISDICTION.

                  (a)      This Agreement shall be governed by and construed in
         accordance with the laws of the State of Delaware, without giving
         effect to the principles of conflicts of law thereof.

                  (b)      Each of Parent, Merger Sub and the Company hereby
         irrevocably submits in any suit, action or proceeding arising out of or
         related to this Agreement or any other instrument, document or
         agreement executed or delivered in connection herewith and the
         transactions contemplated hereby and thereby, whether arising in
         contract, tort, equity or otherwise, to the exclusive jurisdiction of
         any state or federal court located in the State of Delaware and waives
         any and all objections to jurisdiction that it may have under the laws
         of the United States or of any state.

                  (c)      Each of Parent, Merger Sub and the Company waives any
         objection that it may have (including, without limitation, any
         objection of the laying of venue or based on FORUM NON CONVENIENS) to
         the location of the court in any proceeding commenced in accordance
         with this Section 9.6.

         9.7      NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party to the other Parties shall be deemed delivered
upon actual receipt and shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, reputable overnight courier, or
by facsimile transmission (with a confirming copy sent by reputable overnight
courier), as follows:

                  (a)      if to Parent or Merger Sub, to:

                           divine, inc.
                           1301 North Elston Avenue
                           Chicago, Illinois 60622
                           Attention: Jude Sullivan, Esq.
                           Facsimile: (773) 394-6603

                           with a copy to:
                           Katten Muchin Zavis
                           525 West Monroe Street
                           Suite 1600
                           Chicago, Illinois 60661-3693
                           Attention: Jeffrey R. Patt, Esq.
                           Facsimile: (312) 577-8864

                                       51

<PAGE>   59

                  (b)      if to the Company, to:

                           eshare communications, Inc.
                           5051 Peachtree Corners Circle
                           Norcross, Georgia 30092
                           Attention: Glen Shipley
                           Facsimile: (770) 239-4445

                           with a copy to:
                           Morris, Manning & Martin, LLP
                           1600 Atlanta Financial Center
                           3343 Peachtree Road
                           Atlanta, Georgia 30326
                           Attention: Larry W. Shackelford, Esq.
                           Facsimile: (404) 365-9532

or to such other Persons or addresses as may be designated in writing by the
party to receive such notice.

         9.8      ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, including the
Exhibits and Disclosure Schedules, together with the Confidentiality Agreement,
(i) constitutes the entire agreement among the Parties with respect to the
subject matter hereof and supersedes all other prior or contemporaneous
agreements and understandings, both written and oral, among the Parties or any
of them with respect to the subject matter hereof, and (ii) shall not be
assigned by operation of law or otherwise (and any attempt to do so shall be
void).

         9.9      PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and assigns. Nothing in this Agreement, express or implied, other than the right
to receive the consideration payable in the Merger pursuant to Article IV
hereof, is intended to or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

         9.10     Certain Definitions. As used herein:

                  (a)      "Average Market Value" means the arithmetic average
         (rounded to the nearest five decimal places) of the closing sale price
         per share of the Parent Shares as reported on the NNM for the ten (10)
         consecutive trading days ending two trading days prior to the Closing
         Date.

                  (b)      "Encumbrance" means any claim, lien, pledge, charge,
         security interest, equitable interest, option, right of first refusal
         or preemptive right, condition, or other restriction of any kind,
         including any restriction on use, voting (in the case of any security),
         transfer, receipt of income, or exercise of any other attribute of
         ownership.

                  (c)      "ERISA" means the Employee Retirement Income Security
         Act of 1974, as amended.

                                       52

<PAGE>   60

                  (d)      "Governmental Entity" means the United States or any
         state, local or foreign government, or instrumentality, division,
         subdivision, agency, department or authority of any thereof.

                  (e)      "Knowledge" with respect to a party hereto shall mean
         the actual knowledge of any of the executive officers of such party.

                  (f)      "Material Adverse Effect" shall mean any adverse
         change in the business, operations, liabilities (contingent or
         otherwise), results of operations or financial performance, condition
         or prospects of Parent or any of its Subsidiaries or the Company or any
         of its Subsidiaries, as the case may be, which is material to Parent
         and its Subsidiaries, taken as a whole, or the Company and its
         Subsidiaries, taken as a whole, as the case may be; provided, however,
         that in no event shall any of the following, in and of themselves,
         constitute a Material Adverse Effect: (i) any change in or effect on
         the business of Parent or any of its Subsidiaries or the Company or any
         of its Subsidiaries, as applicable, caused by, relating to or resulting
         from, directly or indirectly, the transactions contemplated by this
         Agreement or the announcement thereof; (ii) any change in the market
         price or trading volume of the Company Shares or Parent Shares, as
         applicable, on or after the date of this Agreement; or (iii) any
         adverse change, effect or occurrence attributable to the United States
         economy as a whole, the industries in which Parent or the Company, as
         applicable, compete or the foreign economies in any non-United States
         locations where Parent or the Company, as applicable, have material
         operations or sales.

                  (g)      "Parent Share Rolling Average" means the arithmetic
         average (rounded to the nearest five decimal places) of the closing
         sale price per share of the Parent Shares as reported on the NNM for
         the ten (10) consecutive trading days ending on the trading day
         immediately prior to the date on which such value is being calculated.

                  (h)      "Person" means any individual, sole proprietorship,
         partnership, joint venture, trust, unincorporated association,
         corporation, entity or Governmental Entity.

                  (i)      "Returns" means all returns, declarations, reports,
         statements and other documents required to be filed in respect of
         Taxes, and any claims for refund for Taxes, including any amendments or
         supplements to any of the foregoing.

                  (j)      "Significant Tax Agreement" is any agreement to which
         the Company or any Subsidiary of the Company is a party under which the
         Company or any Subsidiary could reasonably be expected to be liable to
         another party under such agreement in an amount in excess of $25,000 in
         respect of Taxes payable by such other party to any taxing authority.

                  (k)      "Subsidiary" shall mean, when used with reference to
         any entity, (i) any entity of which fifty percent (50%) or more of the
         outstanding voting securities or interests or (ii) any entity of which
         50% of the economic interests, in the case of partnerships or limited
         liability companies, are owned directly or indirectly by such former
         entity.

                                       53

<PAGE>   61

                  (l)      "Tax" or "Taxes" refers to any and all federal,
         state, local and foreign, taxes, assessments and other governmental
         charges, duties, impositions and liabilities relating to taxes,
         including without limitation taxes based upon or measured by gross
         receipts, income, profits, sales, use and occupation, and value added,
         ad valorem, transfer, franchise, net worth, capital stock, withholding,
         payroll, recapture, employment, excise and property taxes, together
         with all interest, penalties and additions imposed with respect to such
         amounts and including any liability for taxes of a predecessor entity;
         provided, however, that the term "Tax" or "Taxes" shall not be deemed
         to include claims by any governmental authority under an escheat,
         unclaimed property, or similar provision of applicable law.

         9.11     SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or unenforceable, all other provisions of this Agreement
shall remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially
adverse to any party.

         9.12     SPECIFIC PERFORMANCE. The Parties acknowledge that irreparable
damage would result if this Agreement were not specifically enforced, and they
therefore consent that the rights and obligations of the Parties under this
Agreement may be enforced by a decree of specific performance issued by a court
of competent jurisdiction. Such remedy shall, however, not be exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.

         9.13     RECOVERY OF ATTORNEY'S FEES. In the event of any litigation
between the Parties relating to this Agreement, the prevailing party shall be
entitled to recover its reasonable attorney's fees and costs (including court
costs) from the non-prevailing party, provided that if both Parties prevail in
part, the reasonable attorney's fees and costs shall be awarded by the court in
such manner as it deems equitable to reflect the relative amounts and merits of
the Parties' claims.

         9.14     CAPTIONS. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.

         9.15     NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be used against any party
hereto.

                                [END OF DOCUMENT;
                             SIGNATURE PAGE FOLLOWS]

                                       54

<PAGE>   62

         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the Parties hereto and shall be effective as
of the date first hereinabove written.

                                      DIVINE, INC.

                                      By:       /s/ Jude Sullivan
                                           ------------------------------------

                                      Name:         Jude Sullivan
                                           ------------------------------------

                                      Its:      Senior Vice-President
                                           ------------------------------------

                                      DES ACQUISITION COMPANY

                                      By:      /s/ Jude Sullivan
                                           ------------------------------------

                                      Name:        Jude Sullivan
                                           ------------------------------------

                                      Its:          President
                                           ------------------------------------

                                      ESHARE COMMUNICATIONS, INC.

                                      By:       /s/ George W. Landgrebe
                                           ------------------------------------

                                      Name:         George W. Landgrebe
                                           ------------------------------------

                                      Its:        Chief Operating Officer
                                           ------------------------------------

                                       55

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