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  PURCHASE AND SALE AGREEMENT  

  between  

  MENTOR GRAPHICS CORPORATION, an Oregon corporation (Seller)  

  and  

  IN FOCUS SYSTEMS, INC., an Oregon corporation (Buyer)  

  Property: 28.9 acres of land
 City of Wilsonville, Clackamas County, Oregon  

1

  PURCHASE AND SALE AGREEMENT
 TABLE OF CONTENTS  

	 
	 	 
	 	 
	 	 
	 	 
	 	Page Number

	ARTICLE I.	 	 
	 	 	PROPERTY	 	5
	 	 	A.	 	Land	 	5
	 	 	B.	 	Appurtenances	 	5
	 	 	C.	 	"Property" and "Real Property" Defined	 	5
	 

ARTICLE II.	 
 	 

 
	 	 	PURCHASE PRICE	 	6
	 	 	A.	 	Purchase Price	 	6
	 	 	B.	 	Payment of Purchase Price	 	6
	 	 	C.	 	Forfeiture of Earnest Money Deposit—Liquidated Damages	 	6
	 

ARTICLE III.	 
 	 

 
	 	 	TITLE TO PROPERTY	 	7
	 	 	A.	 	Title to Real Property	 	7
	 	 	B.	 	Title Insurance	 	7
	 

ARTICLE IV.	 
 	 

 
	 	 	CONDITIONS TO CLOSING/DUE DILIGENCE	 	7
	 	 	A.	 	Buyer's Conditions to Closing	 	7
	 	 	 	 	1.  Due Diligence Period	 	7
	 	 	 	 	 	 	a.  Title	 	8
	 	 	 	 	 	 	b.  Physical Characteristics	 	8
	 	 	 	 	 	 	c.  Governmental Permits, Approvals and Regulations	 	8
	 	 	 	 	 	 	d.  Pending Litigation	 	8
	 	 	 	 	 	 	e.  Operations	 	8
	 	 	 	 	 	 	f.  Right of First Refusal	 	8
	 	 	 	 	2.  Due Diligence Items To Be Furnished By Seller to Buyer	 	9
	 	 	 	 	3.  Buyer's Right To Rescind Agreement During Due Diligence Period	 	9
	 	 	 	 	4.  Buyer's Objections To Buffer Zone Agreement and Right of First Refusal	 	9
	 	 	 	 	5.  Buyer's Objections To Title Matters	 	9
	 	 	B.	 	Closing Conditions	 	10
	 	 	 	 	1.	 	Removal of Water Supply Building Moratorium	 	10
	 	 	 	 	2.	 	Approval of CCRs and Development Plan	 	10
	 	 	 	 	3.	 	Representations To Be Correct	 	10
	 	 	 	 	4.	 	No Litigation	 	10
	 	 	 	 	5.	 	Title Insurance	 	10
	 	 	 	 	6.	 	No Material Adverse Change	 	10
	 	 	 	 	7.	 	Performance by Seller	 	10
	 	 	C.  Seller's Conditions to Closing	 	10
	 	 	 	 	1.	 	Right of Approval of Development Plan	 	11
	 	 	 	 	2.	 	Covenants, Conditions and Restrictions	 	11
	 	 	 	 	3.	 	Buffer Zone Agreement	 	11
	 	 	 	 	4.	 	Buyer's Performance	 	12
	 

ARTICLE V.	 
 	 

 
	 	 	CLOSING AND ESCROW	 	12
	 	 	A.  Deposit with Escrow Holder and Escrow Instructions	 	12

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	 	 	B.  Closing	 	12
	 	 	C.  Delivery by Seller	 	12
	 	 	D.  Delivery by Buyer	 	12
	 	 	E.  Deliveries by Buyer and Seller to Escrow Holder	 	13
	 	 	F.  Other Instruments	 	13
	 	 	G.  Costs and Expenses	 	13
	 	 	H.  Close of Escrow	 	13
	 	 	J.  Notification; Closing Statements	 	13
	 	 	K.  Delivery of Documents	 	13
	 

ARTICLE VI.	 
 	 

14
	 	 	A.  Authority of Seller	 	14
	 	 	B.  Litigation	 	14
	 	 	C.  Permits and Other Approvals	 	14
	 	 	D.  Compliance	 	14
	 	 	E.  No Conflict or Violation	 	14
	 	 	F.  Consents	 	14
	 	 	G.  Environmental Matters	 	14
	 	 	H.  Title	 	15
	 	 	I.  Buyer's Acquisition of Actual Knowledge	 	15
	 	 	J.  Definition of Seller's Knowledge	 	15
	 

ARTICLE VII.	 
 	 

 
	 	 	ENVIRONMENTAL MATTERS	 	15
	 	 	A.  Condition of Property	 	15
	 	 	B.  Release from Liability	 	15
	 	 	C.  Obligation to Indemnify, Defend, and Hold Harmless	 	15
	 	 	 	 	1.  Limited Environmental Indemnification	 	15
	 	 	 	 	2.  Environmental Conditions of which Buyer Had No Knowledge	 	16
	 	 	 	 	3.  Recoverable Expenses	 	16
	 	 	D.  Definitions	 	16
	 	 	 	 	1.  Hazardous Material	 	16
	 	 	 	 	2.  Environmental Requirements	 	17
	 	 	 	 	3.  Environmental Damages	 	17
	 

ARTICLE VIII.	 
 	 

 
	 	 	REPRESENTATIONS AND WARRANTIES OF BUYER	 	18
	 	 	A.  Authority of Buyer	 	18
	 	 	B.  Buyer's Independent Investigation	 	18
	 	 	C.  Buyer's Insurance	 	18
	 

ARTICLE IX.	 
 	 

 
	 	 	COVENANTS OF SELLER AND BUYER	 	19
	 	 	A.  Indemnification by Seller	 	19
	 	 	B.  Indemnification by Buyer	 	19
	 

ARTICLE X.	 
 	 

 
	 	 	LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION	 	19
	 

ARTICLE XI.	 
 	 

 
	 	 	POSSESSION; ACCESS	 	20

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ARTICLE XII.	 
 	 

 
	 	 	MISCELLANEOUS	 	20
	 	 	A.  Notices	 	20
	 	 	B.  Brokers and Finders	 	21
	 	 	C.  Successors and Assigns	 	22
	 	 	D.  Amendments	 	22
	 	 	E.  Allocation of Purchase Price	 	22
	 	 	F.  Confidentiality and Return of Documents	 	22
	 	 	G.  Press Releases	 	22
	 	 	H.  Continuation and Survival of Representations and Warranties	 	22
	 	 	I.  Interpretation	 	23
	 	 	J.  Governing Law	 	23
	 	 	K.  Merger of Prior Agreements	 	23
	 	 	L.  Attorneys' Fees	 	23
	 	 	M.  Time of the Essence	 	23
	 	 	N.  Joint Venture	 	23
	 	 	O.  Authority	 	23
	 	 	P.  Further Acts	 	23
	 	 	Q.  Agreement Not to Benefit Third Parties	 	23
	 	 	R.  Severability	 	23
	 	 	S.  Facsimile Signatures	 	24
	 	 	T.  Form 1099-S	 	24
	 	 	U.  Business Days; Deadlines	 	24
	 	 	V.  Counterparts	 	24
	 	 	W.  Survival of Obligations	 	24
	 	 	X.  Governmental Approvals/Permits	 	24
	 	 	Y.  Foreign Investment in Real Property Tax Act	 	24

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  INDEX TO EXHIBITS  

	 
	 	Page No.

	EXHIBIT A—LEGAL DESCRIPTION	 	1, 26-27
	EXHIBIT B—SCHEDULE OF APPURTENANCES	 	1, 28
	EXHIBIT C—STATUTORY WARRANTY DEED	 	1, 29-30
	EXHIBIT D—SELLER'S AFFIDAVIT	 	3, 31
	EXHIBIT E—PRELIMINARY TITLE REPORT	 	4, 32
	EXHIBIT F—COVENANTS, CONDITIONS & RESTRICTIONS	 	8, 33-37
	EXHIBIT G—SCHEDULE OF PENDING LITIGATION	 	12, 38
	EXHIBIT H—SELLER'S NO CONFLICT OF VIOLATION	 	12, 39
	EXHIBIT I—SELLER'S CONSENTS	 	12, 40
	EXHIBIT J—SCHEDULE OF ALLOCATION OF PURCHASE PRICE	 	21, 41
	EXHIBIT K—IRC SECTION 1445 CERTIFICATION OF NON-FOREIGN STATUS FORM	 	25, 42

  PURCHASE AND SALE AGREEMENT  

    THIS AGREEMENT (the "Agreement") is dated as of October      , 1999 by and between MENTOR GRAPHICS
CORPORATION, an Oregon corporation, ("Seller"), and IN FOCUS
SYSTEMS, INC., an Oregon corporation, ("Buyer"), with reference to the following facts:

    A.  Seller is the owner of the Property, as hereinafter defined, located in
Wilsonville, Oregon.

    B.  Buyer desires to purchase from Seller and Seller desires to sell to Buyer the Property on the terms and conditions set forth herein.

    NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements herein set forth, and other valuable consideration, receipt of which is hereby acknowledged, Seller and Buyer agree as follows:

  ARTICLE I.
 PROPERTY  

    Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, subject to the terms and conditions set forth herein, the
following:

    A.  Land. Seller's fee
interest in that certain land (the "Land") located in Wilsonville, Oregon, more particularly described in Exhibit A attached hereto and made a part
hereof.

    B.  Appurtenances. Any and all rights, privileges and easements
appurtenant to the Real Property and owned by Seller, including, without limitation, all of Seller's right,
title and interest in and to all minerals, oil, gas and other substances on and under the Real
Property, including all development rights, air rights, water, water rights and water stock relating to the Real Property and
any other easements, rights-of-way or appurtenances used in connection with the beneficial use and enjoyment of the Real
Property, specifically including those rights described in Exhibit B, attached hereto and made a part hereof, all of
which are collectively referred to as the "Appurtenances."

    C.  "Property" and "Real Property" Defined. All of the items described
in Sections I.A. and I.B. above are hereinafter collectively referred to as the "Property" or "Real
Property." Seller shall convey to Buyer all of Seller'sright, title and interest in
and to the Real Property pursuant to the Statutory Warranty Deed attached hereto as Exhibit C and made a part hereof (the "Warranty Deed").

5

  ARTICLE II.
 PURCHASE PRICE  

    A.  Purchase Price. The purchase price for the Property shall be the amount of
FIVE MILLION TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($5,225,000) (the "Purchase
Price"). The Purchase Price shall be subject to the closing adjustments set forth in this Agreement.

    B.  Payment of Purchase Price. The Purchase
Price shall be paid as follows:

    1.  Upon
the execution and delivery of this Agreement, Buyer shall
deliver to Chicago Title Insurance Company ("Escrow Holder") the sum of FIFTY-TWO THOUSAND
TWO HUNDRED TWENTY-FIVE DOLLARS ($52,225) as a deposit towards the Purchase Price (the
"Deposit").

    2.  On
the Closing Date, a sum equal to the Purchase Price, adjusted by
the amount of the Deposit, the prorations, fifty percent (50%) of the costs of escrow, and other costs and adjustments as set forth in this Agreement, will
be paid by Buyer.

    3.  The  Deposit shall be invested in accordance with instructions reasonably approved by both Buyer and
Seller. All interest on the Deposit shall
accrue for the benefit of Buyer and be credited to the Purchase Price on the Closing Date (as defined herein),
 provided, however, in the event Buyer fails to purchase
the Property for any reason other than the failure of a condition to its performance or a breach of any material provision of this Agreement by Seller, all interest accrued on the Deposit
shall accrue for the benefit of Seller.

    C.  Forfeiture of Earnest Money Deposit—Liquidated Damages.

    Buyer acknowledges that the Property will be removed from the market while this Agreement is in effect, making the
Property unavailable for sale to other qualified buyers. Buyer further acknowledges that if it fails to purchase the Property for any reason other than the
failure of a condition to its performance or a breach of any material provision of this Agreement by Seller, Seller will be entitled to compensation for the detriment resulting from the removal of the Property from the market and entering into this Agreement,
rather than selling to other qualified
buyers. The parties agree that the damages which Seller will sustain as a result of such breach will be substantial, but will be difficult to ascertain.
Therefore, the parties agree that if Buyer fails to purchase the Property for any reason other than a
failure of a condition to its performance or a breach of any material provision of this Agreement by Seller, Seller will be entitled to recover the sum, at the time of the breach, of the Deposit. This sum shall be paid and received as liquidated damages and not as a penalty. The parties acknowledge and agree
that the Deposit is a reasonable estimate of Seller's damages, considering all of the circumstances existing on
the date of this Agreement, including the relationship of the sum to the range of harm to Seller that
reasonably could be anticipated and the expectation that proof of actual damages would be impractical or difficult to ascertain. Factors taken into consideration by the parties include, but are not
limited to: Seller's loss of opportunity to sell the Property to other qualified buyers on better terms
or at a higher price in a rising market; Seller's risk of loss of a bargain if the market turns negative; Seller's damages related to its continuing
obligation for the payment of taxes and insurance; Seller'sloss
of earnings on the amount of the Purchase Price resulting from a deal closing and other expenses if the deal does not close; and consideration for Seller's
having waived its right to sue Buyer for additional damages or for specific performance. By
placing their signatures in the spaces provided below, each party hereby acknowledges the accuracy of the statements made above and the fact that each party was represented by counsel who explained
the consequences of this provision at the time this Agreement was made. Finally, the parties agree that the Deposit shall be liquidated damages
and

6

will
be in lieu of any other monetary or equitable relief to which Seller might otherwise be entitled by virtue of this Agreement or by operation of law or
equity.

	BUYER:	 	ACKNOWLEDGMENT RE: LIQUIDATED DAMAGES
	 

 	 
 	 

IN FOCUS SYSTEMS, INC.,

an Oregon Corporation
	 

 	 
 	 

By:	 
 	 

/s/ JOHN V. HARKER   

	 

 	 
 	 

Its:	 
 	 

John V. Harker, Chairman, President & CEO

	 
 SELLER:	 
 	 
 MENTOR GRAPHICS CORPORATION,

an Oregon corporation,
	 

 	 
 	 

By:	 
 	 

/s/ [ILLEGIBLE]   

	 

 	 
 	 

Its:	 
 	 

EVP

  ARTICLE III.
 TITLE TO PROPERTY  

    A.  Title to Real Property. At Closing, Seller shall convey to the Buyer good and
marketable title to the Real Property, free and clear of all liens and encumbrances except the Permitted
Exceptions, by execution and delivery of the Warranty Deed.

    B.  Title Insurance. At Closing, Seller shall provide to Buyer a standard ALTA
owners policy of title insurance insuring Buyer's fee ownership of the Real Property, free and clear of
all liens and encumbrances except the Permitted Exceptions, in the amount of FIVE MILLION TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS
($5,225,000) which policy shall be issued by Chicago Title Insurance Company (the "Title Company").
Seller shall provide an affidavit in the form of Exhibit D ("Seller's Affidavit") to the Title Company
for the standard ALTA title policy and shall have no obligation to provide any other documents to the Title
Company. Buyer shall have the right, if Buyer so elects, to cause the title
policy to be issued as an extended coverage policy, provided Buyer pays the additional premiums associated therewith.

  ARTICLE IV.
 CONDITIONS TO CLOSING/DUE DILIGENCE  

    A.  Buyer's Conditions to Closing. Buyer's review and approval of the following
matters shall be conditions precedent to Buyer's obligation
to purchase the Property.

    1.  Due Diligence Period. The obligation of Buyer to consummate the sale
contemplated by this Agreement is expressly contingent upon Buyer having sixty (60) days from the
date of execution of this Agreement (the "Contingency Date") (such period between the date of this Agreement
and the Contingency Date being referred to herein as the "Due
Diligence Period") to conduct, at Buyer's sole expense, such due diligence investigation of the Property, and the quality, nature,
adequacy and

7

physical
condition thereof, as Buyer, in its sole discretion, deems appropriate, including but not limited to investigating, reviewing and approving the
following matters:

	a.
	Title. Researching and investigating all matters relating to title to the Property,
including, without limitation, those exceptions to title listed on a preliminary title report issued by the Title Company  as more
particularly described in Exhibit E  attached hereto and made a part hereof (the "Title
Report"), together with copies of the underlying documents referenced in the Title Report, and a copy of the existing survey for
the Real Property  (the "Survey").

	b.
	Physical Characteristics. Researching and investigating all matters related to the quality, nature, adequacy and physical condition
of the Property  including but not limited to performing a comprehensive feasibility study, including appropriate engineering and soil
tests and environmental audit, and researching the availability and proximity of utilities to the Property.

	c.
	Governmental Permits, Approvals and Regulations. Researching and investigating all matters related to governmental permits, licenses,
legal requirements, taxes, assessments and approvals or relating to the operation, use or occupancy of any part of the Property, and all zoning, land
use, subdivision, environmental, and laws and regulations restricting or regulating or otherwise affecting the use, occupancy or enjoyment of the
 Property.

	d.
	Pending Litigation. All materials regarding litigation, administrative or condemnation proceedings or governmental investigations
pending or threatened regarding the Property.

	e.
	Operations. Researching and investigating all other information, agreements, documents, instruments, or the like that are material to
the use, value, operation, repair, maintenance, alteration, or development of the Property.

	f.
	Right of First Refusal. Reviewing and approving the Right of First Refusal, which
 Seller shall submit to Buyer for approval within thirty (30) days
of execution of this Agreement and thereafter record against title to the Real Property.
The Right of First Refusal shall provide that if, after acquiring the Real Property
 from Seller, Buyer desires to
sell any or all of the Real Property to any third party, Buyer must
first offer the Real Property to Seller at the price and pursuant to
such other terms as Buyer intends to offer the Real Property
 to such third party. Seller will have fourteen (14) calendar days in which to determine
its interest in repurchasing the Real Property and respond to Buyer in
writing. If Seller does not exercise its right to repurchase the Real
Property, Buyer may offer the Real Property to
the third party. If such third party does not purchase the Real Property and Buyer
 desires to offer the Real Property to any other party, Buyer
 must again offer the Real Property to Seller
 in accordance with the terms set forth above. Seller's Right of First Refusal
 shall not apply to a sale of any or all of the Real Property by Buyer
 to a third party under which: (a) the third party owns and develops the Real Property, and (b) the
third party agrees to construct one or more buildings on the Real Property, and (c) the third party leases at least one (1) building to Buyer for a term of not less than five (5) years. Buyer agrees to
provide Seller with a copy of the executed lease between Buyer
 and the third party. Seller shall not disclose the terms of such lease to any person, entity or
third party without the express written consent of Buyer. Notwithstanding any other provision herein to the contrary, the Right of First Refusal shall be extinguished in the event that the Seller
 no longer is the owner or lessee (under a lease comparable to the lease described above) of any real property which is adjacent to the Real Property acquired from
Seller.

8

 

    2.  Due Diligence Items To Be Furnished By Seller to Buyer. Seller shall, within ten (10) days of mutual execution of this Agreement, deliver
copies of the following items to Buyer for review (to the extent that Seller has the
same in its possession or under its control or can reasonably obtain the same):

	a.
	All
inspection reports, surveys, engineering studies, soil and substrata studies, land use studies, and any other documents regarding the quality, nature and physical condition of
the Property.

	b.
	The
most recent tax statements showing real property taxes, personal property taxes, and special assessments affecting the Property,
together with any notices of proposed tax reassessment of the Property, if any have been received by Seller.

	c.
	All
environmental surveys, assessments or audits, remediation plans, and any and all other reports, studies or information regarding any underground tanks, sumps or piping on
the Property, or the existence or use of any Hazardous Materials on
the Property by Seller, its tenants, or any previous occupants or
owners, or any cleanup, removal or remediation of any such materials.

	d.
	All
permits, orders, approvals and other documents issued for or with respect to the Property by any governmental or
quasi-governmental authority, or relating to the zoning and permitted uses of the Property.

    3.  Buyer's Right To Rescind Agreement During Due Diligence Period. In the event Buyer determines, in its sole and absolute discretion, after researching and investigating
the matters set forth in Article V A(1)(b) through
(e) above, that the quality, nature or physical condition of the Property, and/or the development potential of the Property, is not suitable for
Buyer's intended use, Buyer shall have the right to rescind this Agreement by giving written notice of
rescission to Seller at any time during the Due Diligence Period. Seller acknowledges and agrees that
Buyer shall be the sole and exclusive judge, and shall have absolute
discretion, in determining whether the Property is suitable for Buyer's intended use and whether the
contingencies set forth in Article V A(1)(b) through (e) have been satisfied. In the event Buyer rescinds this Agreement during the Due Diligence Period, there shall be no Closing of this Agreement and this Agreement shall be
deemed null and void and have no further binding force and effect. The parties shall, in such event, be released from all further obligations hereunder and the Escrow
Holder shall promptly refund the Deposit, and all interest accrued thereon to Buyer.

    4.  Buyer's Objections To Buffer Zone Agreement and Right of First Refusal. In the event Buyer, in its sole and absolute discretion, objects to Buffer
Zone Agreement or the terms and conditions
of the Right of First Refusal that Seller proposes to record against the Property, Buyer shall provide written notice of its objections to Seller (the "Disapproved Matters") during the Due Diligence
Period. Within five (5) business days after Buyer notifies Seller of the Disapproved
Matters, Seller shall notify Buyer in
writing of any such Disapproved Matters which Seller is willing and able to cure as of or prior to the Closing (the "Cure Notice"). Except as so identified in the Cure
Notice, Seller shall be deemed to have elected not to cure such Disapproved
Matters. Buyer may, by giving written notice to Seller on or before the third
(3rd) business day after receipt of the Cure Notice, terminate this Agreement in its entirety if Seller does
not give a Cure Notice with regard to all Disapproved
Matters in which event this Agreement shall be deemed null and void and of no further binding force and effect and the Escrow Holder
shall promptly refund the Deposit, and all interest accrued thereon, to Buyer. If Buyer does not elect within
such three (3) business day period to cause such
termination, then Buyer shall be deemed to have waived its disapproval of the Disapproved Matters except
those as to which the Cure Notice has been given.

    5.  Buyer's Objections To Title Matters. Buyer shall have the right to disapprove any title exceptions disclosed by the Title Report or matters disclosed by the Survey or otherwise disclosed to 

9

Buyer (the "Disapproved Encumbrances"), by providing written notification to Seller of any Disapproved Encumbrances on or before the thirtieth (30) day after the date of
execution of this Agreement. All title exceptions disclosed to Buyer and not disapproved within the
period described above shall constitute "Permitted Exceptions." Within five (5) business days after Buyer notifies Seller of the Disapproved Encumbrances, Seller shall notify Buyer in
writing of any such Disapproved
Encumbrances which Seller is willing and able to cure as of or prior to the Closing (the "Title Cure
Notice"). Except as so identified in the Title Cure
Notice and as provided in the preceding sentence, Seller shall be deemed to have elected not to cure such Disapproved Encumbrances.
Buyer may, by giving written notice to Seller on or before the third (3rd) business day after the expiration of the five (5) business day period
described above, terminate this Agreement in its entirety if Seller does not give a Title Cure
Notice with regard to all Disapproved Encumbrances. This Agreement shall, in
such event, be deemed null and void and of no further binding force and effect and the Escrow Holder shall promptly refund the Deposit, and all accrued
interest thereon, to Buyer. If Buyer does not elect to terminate within such three (3) business day period, then Buyer shall be
deemed to have waived its disapproval of the Disapproved Encumbrances (except to those as to which a Title Cure
Notice has been given) and such title exceptions shall then be deemed to be "Permitted Exceptions." Seller shall be deemed to have
"cured" a Disapproved Encumbrance if (i) the title exception is
actually cured and the Disapproved Encumbrance is removed from the Title Policy, (ii) the Disapproved
Encumbrance is otherwise removed from the Title Policy in a manner satisfactory to Buyer in its reasonable discretion, although
the title defect is not actually cured, or (iii) the Disapproved Encumbrance is insured against by the Title
Company in a manner satisfactory to Buyer in its reasonable discretion.

    B. Closing Conditions.  The obligations of Buyer to consummate the
transaction in this Agreement shall further be contingent on the following, as of the Closing Date:

     1. Removal of Water Supply Building Moratorium. By Ordinances No. 497, 504 and 506, the City of Wilsonville
extended its previously adopted moratorium on development in the city ("Water Supply Moratorium"). Section I (13) of that ordinance
provides that the moratorium shall expire immediately upon a long-term water source being planned and funded and an adequate interim water supply being available or on January 5,
2000, unless as otherwise extended in accordance with state law. The obligation of Buyer to consummate the sale contemplated by this Agreement is contingent
upon the Water Supply Moratorium having expired or been removed by the City of
Wilsonville.

     2. Approval of CCRs and Development Plan. Seller shall have approved Buyer's CCRs and Development Plan for the Real Property.

     3. Representations To Be Correct. All representations and warranties of Seller shall be true and correct as of the Closing Date.

     4. No Litigation. No action by any governmental authority shall have been instituted or threatened in writing which
questions the validity or legality of the transactions contemplated hereby.

     5. Title Insurance. The Title Company shall be prepared to issue to Buyer title insurance in the amount of the Purchase Price, subject only to Permitted Exceptions with coverage, reinsurance and other such endorsements as Buyer shall
reasonably
require.

     6. No Material Adverse Change. There shall have been no material adverse change after the Contingency Date in the
condition of the Property.

     7. Performance by Seller. Seller shall have performed all of its
obligations pursuant to this Agreement.

    C. Seller's Conditions to Closing.  The following conditions are precedent to Seller's obligation to close the
transaction:

10

     1. Right of Approval of Development Plan. Prior to Closing, Buyer shall prepare a conceptual development plan for the
Real Property (the
"Development Plan") which shall include a construction and occupancy schedule for the site; plans for development on the Real
Property for occupancy by Buyer; plans for development on the Real Property for
occupancy by third parties and any plans for the sale of all or any part of the Real Property to a third party. Buyer shall submit to Seller the Development Plan for
approval within sixty (60) days of execution of this Agreement. Buyer shall obtain Seller's input
and work with Seller in preparing the Development Plan so as to increase the value and viability of the Real Property and the adjacent property owned by Seller. Seller will promptly review the Development Plan and
advise
Buyer in writing as to any objections that Seller has therewith. Seller will not unreasonably object to any
element of the plan that Buyer believes meet its facility
requirements and Seller recognizes that the approved plan will be conceptual only and subject to revision by Buyer. Seller and Buyer will work with each other in a
timely and reasonable manner to attempt to resolve Seller's objections, if any, to the Development Plan.
In the event Seller and Buyer cannot mutually resolve Seller's objections, if any, to the Development Plan prior to December 13, 1999, there shall be
no Closing of this transaction, and this Agreement shall be deemed null and void and of no further
binding force and effect; and the parties shall be released of all further obligations hereunder, and the Escrow Holder shall promptly refund the Deposit,
and all interest accrued thereon to Buyer. Buyer agrees that the initial development of the Real Property
will be on the south end of the
Real Property and this covenant by Buyer shall survive and be enforceable in accordance with its terms
following the consummation of this transaction and shall not be merged with or into the Warranty Deed delivered by Seller to Buyer.

     2. Covenants, Conditions and Restrictions. Seller's approval of the Covenants, Conditions and Restrictions (the
"CCRs"), which Seller shall record against title to the Real
Property before Closing. Buyer shall obtain Seller's input and work with Seller in developing the CCRs, including provisions comparable to those
listed in the attached Exhibit F. Buyer shall submit the proposed CCRs to Seller for approval within
thirty (30) days of execution of this Agreement. Seller will promptly
review same and within ten (10) business days of Seller's receipt, advise Buyer in writing as to any objections that Seller has therewith. Seller will not unreasonably object to any provision that Buyer believes meet its facility requirements. Seller and
Buyer will work with each other in a timely and reasonable manner to attempt to resolve Seller's
objections, if any, to the CCRs. In the event Seller and Buyer cannot mutually resolve Seller' s objections,
if any, to the CCRs prior to November 30, 1999, there shall be no Closing of this transaction, and this Agreement shall be deemed null and void
and of no
further binding force and effect and the parties shall be released of all further obligations hereunder, and the Escrow Holder shall promptly refund the Deposit, and all interest accrued thereon to Buyer.

     3. Buffer Zone Agreement. Seller shall submit to Buyer for approval
within thirty (30) days of execution of this Agreement and thereafter, before Closing, record against title to the Real
Property. The Buffer Zone Agreement shall provide more stringent restrictions than the CCRs including set backs, parking, roadways,
pathways, ingress/egress, landscaping, signage, lighting and utilities. Buyer will promptly review same and advise Seller in writing as to any objections
that Buyer has therewith. Buyer will not unreasonably object to any buffer zone restrictions
Seller has included which are comparable to those contained in the Buffer Zone Agreement between Sellerand
Tektronix, Inc., recorded at fee no. 88052582 on December 16, 1988. Seller and Buyer will work with each other in a timely and reasonable
manner to attempt to resolve Buyer's objections, if any, to the Buffer Zone Agreement. In
the event Seller and Buyer cannot mutually resolve Buyer's objections, if any, to the Buffer Zone Agreement prior to November 30, 1999, there shall
be no Closing of this transaction, and this Agreement shall be deemed null and void and of no further
binding force and effect and the parties shall be released of all further obligations hereunder, and the Escrow Holder shall promptly refund the Deposit,
and all interest accrued thereon to Buyer.

11

     4. Buyer's Performance. Buyer having performed all obligations to be performed by Buyer under the terms of this Agreement.

  ARTICLE V.
 CLOSING AND ESCROW  

    A. Deposit with Escrow Holder and Escrow Instructions.  Upon execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with Escrow Holder and this instrument shall serve as the instructions to Escrow
Holder for consummation of
the purchase and sale contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be necessary or appropriate to enable the Escrow Holder to comply with the terms of this Agreement; provided,
however, that if the provisions of this Agreement conflict with any supplementary
escrow instructions, the terms of this Agreement shall control.

B. Closing.

     1. The  Closing of the transaction (the "Closing") shall be on
December 15, 1999, provided, however, in the event all conditions precedent to Closing have been satisfied by such date, except for expiration or
removal of the Water Supply Moratorium, Buyer may, in Buyer's sole and absolute discretion, elect to either
(i) close the sale on December 16, 1999, or (ii) terminate this Agreement, effective December 16, 1999, in which event this Agreement
shall be null and void and
of no further force and effect and the Escrow Holder shall promptly refund the Deposit, and all interest
accrued thereon to Buyer. Delivery of all items to be made at the Closing under the terms of this Agreement
shall be made by mail or courier, to the extent possible, but if Buyer and Seller determine that an "in person" Closing is necessary or desirable, then such in person Closing shall be held at a mutually agreeable location. The documents shall be executed and exchanged by the
parties subject to the recording of
documents and disbursement of funds by Escrow Holder on the following business day (the "Closing Date").
All documents shall be deemed delivered on the date the Warranty Deed is recorded.

    2.  If
the Closing does not occur on or before the Closing Date, Escrow Holder shall, unless it is notified by
either party to the contrary within five (5) days after the Closing
Date, return to the depositor thereof all items which it may have deposited hereunder. Any such return shall not relieve either party hereto of any liability it may have for
its wrongful failure to close and nothing contained herein shall affect Seller's rights to the Deposit.

C. Delivery by Seller.

     1. At
Closing, Seller shall deliver the following to Buyer:

       a. A
resolution relating to Seller's authority to complete this transaction in a form mutually
agreeable to Buyer and Seller;

     2. Buyer may waive Seller's obligation to deliver any of the items
described in this Section, but such waiver shall only be effective if it is in writing, executed by Buyer, and delivered to Seller no later than five (5)
 days prior to the Closing.

D. Delivery by Buyer.

     1. At
Closing, Buyer shall deliver the following to Seller:

       a. A
resolution relating to Buyer's authority to complete this transaction in a form mutually agreeable
to Buyer and Seller;

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     2. Seller may waive Buyer's obligation to deliver any of the items
described in this section, but such waiver shall only be effective if it is in writing, executed by Seller, and delivered to Buyer no later than five (5)
 days prior to the Closing.

    E. Deliveries by Buyer and Seller to Escrow Holder.  At the Closing, Seller
shall deliver the Warranty Deed to Escrow Holder together with the
Seller's Affidavit to Title Company and Buyer shall
deposit the Purchase Price (as adjusted pursuant to the terms of this Agreement) with Escrow Holder to be
held and disbursed by Escrow Holder pursuant to instructions given to Escrow Holder in accordance with this Agreement and in a form mutually agreeable to Buyer and Seller.

    F. Other Instruments. Seller and Buyer shall each execute or deliver or deposit such other instruments as are
reasonably required to close the escrow and consummate the
purchase of the Property in accordance with the terms of this Agreement.

    G. Costs and Expenses. Seller and Buyer shall each pay one-half the premium for the ALTA owner's insurance policy
and Buyer shall pay any premium for extended coverage and for any and all special title insurance endorsements. Seller shall also pay the cost of any
documentary or other real property transfer taxes applicable to the sale of the Real
Property. Seller shall at Closing pay a commission only to Seller's agent,
Trammell Crow Company, pursuant to its separate agreement with such agent. Buyer shall pay a commission to its agent, Corporate
Property Services, pursuant to its separate
agreement with such agent. Buyer and Seller shall share equally all costs and charges of the escrow for
the sale. Except as expressly provided herein, each party shall pay its own expenses incurred in connection with this Agreement and the transactions
contemplated herein.

    H. Close of Escrow.  If (i) Buyer or Escrow Holder, as the case may be,
has received the documents, items and funds described herein, (ii) Escrow
Holder has not received prior written notice from either party that an agreement of either party made hereunder has not been performed, or to the effect that any condition set
forth herein has not been satisfied or waived, or that Buyer has elected to terminate its rights and obligations pursuant to the terms of this Agreement,
and (iii) the Title Company has issued or is unconditionally prepared and committed to
issue to Buyer the Title Policy, then Escrow Holder is authorized and instructed at the opening of
business or as soon thereafter as may be possible on the Closing Date to:

     1. Record
the Warranty Deed with the County Recorder of Clackamas County, State of Oregon; and

     2. Deliver
the Purchase Price, as adjusted pursuant to this Agreement,
to Seller.

    J. Notification; Closing Statements.  If Escrow Holder cannot comply
with the instructions herein and to be provided, Escrow Holder is not authorized to record the foregoing documents. If Escrow
Holder is unable to record, Escrow Holder shall notify James T. Dunn, Esq. at (503) 224-3113, Karen Thomson
at (503) 685-1193, Robert R. Griffith, Esq. at (503) 228-3939 and Tim Carlson, Esq. at (503) 685-8742, without delay. Immediately prior to and
immediately after the Closing Date, Escrow Holder shall deliver to Seller a true, correct and complete copy
of the Seller's Closing Statement, in a form customarily
prepared by Escrow Holder and shall deliver to Buyer a true, correct and complete copy of Buyer's Closing Statement, in a form customarily prepared by Escrow Holder.

    K. Delivery of Documents.  Upon the Close of Escrow, all instruments and documents to be delivered to Buyer shall be delivered
to In Focus Systems, Inc., 27700B S.W. Parkway Avenue, Wilsonville, Oregon 97070, Attn: Tim Carlson, Esq., with a copy
to Robert R. Griffith, Esq., Garvey, Schubert & Barer, Eleventh Floor, 121 S.W. Morrison Street, Portland, Oregon 97204. Upon the Close of Escrow, all statements and documents to be delivered
to Seller shall be delivered to Mentor Graphics Corporation, 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777, Attn: Larry

13

Gardner,
with a copy to Martin Bischoff et. al. LLP, 888 S.W. Fifth Avenue, Suite 900, Portland, Oregon 97204, Attn: James T. Dunn, Esq.

  ARTICLE VI.
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER  

    Seller makes no representation or warranties, express or implied, except as specifically set forth in this Agreement. Seller  hereby represents and warrants to, and covenants with
Buyer, now and as of the Closing Date, as follows:

    A. Authority of Seller. Seller is a corporation duly organized and validly existing
under the laws of the State of Oregon, and is duly qualified to conduct business in the State of Oregon and has full power and authority to conduct its business as presently being conducted and to own
and lease its properties and assets. This Agreement and all documents executed by Seller which are to be
delivered to Buyer at the Closing are, or at the time of Closing will be, duly authorized, executed, and
delivered by Seller, and are, or at the time of
Closing will be legal, valid, and binding obligations of Seller enforceable against Seller in accordance with
their terms.

    B. Litigation.  Except as set forth on Exhibit G attached hereto
and made a part hereof, there is no action, order, writ, injunction, judgment or decree outstanding or claim, suit, litigation, proceeding, arbitration proceeding or written notice of an investigation
involving the Property pending, or to Seller's Knowledge, threatened in writing, against or affecting
any of the Property.

    C. Permits and Other Approvals.  To the best of Seller's Knowledge, Seller has
provided to Buyer all documents in Seller'spossession
regarding licenses, permits, approvals, easements and rights of way, including proof of dedication, required from all governmental authorities having jurisdiction over the Property or from private
parties for the normal use and operation of the Property and to ensure ingress
to and egress from the Property as required to permit the normal intended usage of the Property by the
tenants thereof, their invitees and customers.

    D. Compliance.  Except as set forth on Exhibit G, attached hereto
and made a part hereof, to the best of Seller's knowledge, Seller and the Property are in substantial
compliance with all applicable laws, statutes, ordinances and regulations. Except as disclosed to Buyer in writing, Seller has not received any written
notice to the effect that, nor otherwise been
advised that, it is not in compliance with any such statutes, regulations, orders, ordinances or other laws.

    E. No Conflict or Violation.  Except as set forth on Exhibit H,
attached hereto and made a part hereof, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in (i) a breach of, or default under, any term or provision of any contract, agreement, indebtedness, lease, encumbrance, commitment, license, franchise, permit,
authorization or concession to which Seller is a party or affecting any of the Property, (ii) a
violation by Seller of any statute, rule, regulation, ordinance, code, order, judgment, writ, injunction, decree or award, or (iii) the creation
of any encumbrance against any of the Property.

    F. Consents.  Except as set forth on Exhibit I, attached hereto
and made a part hereof, no consent, approval or authorization of, or declaration, filing or registration with any governmental or regulatory authority, or any other person or entity, is required to be
made or obtained by Seller in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby.

    G. Environmental Matters.  To Seller's Knowledge, the Property is in compliance
in all material respects with all applicable Environmental Requirements. Seller has not received written or other notification from any governmental
authority or regulatory agency stating that any of the Property is (i) targeted for cleanup or remediation of any Hazardous Materials, or
(ii) otherwise not in compliance

14

with
applicable Environmental Requirements. To Seller's Knowledge, except as otherwise disclosed in the Environmental
Reports, provided by Seller to Buyer prior to expiration of the Due Diligence period, the only Hazardous
Materials present on, in or under the Property are those substances (a) the presence of which would not have a material
adverse effect on the Property and (b) those substances which have been handled and stored in a manner complying with all applicable Environmental Requirements.

    H. Title. Seller is the legal and beneficial fee simple titleholder of the Property and
has good, marketable, and insurable title to the Property, and such title will, as of the Closing Date,
be free and clear of all liens, encumbrances, claims, covenants, conditions, restrictions, easements, rights of way, options, judgments, or other matters, except for the Permitted Encumbrances.

    I. Buyer's Acquisition of Actual Knowledge.  If, prior to the Closing
Date, Buyer acquires actual knowledge of any specific information inconsistent with the representations and warranties of Seller
under this Agreement, Buyer shall provide such
information to Seller; and, if Buyer nevertheless elects not to terminate this Agreement, then Buyer shall not be entitled to rely on any representations or warranties which are
inconsistent with such information.

    J. Definition of Seller's Knowledge.  The term "Seller's Knowledge"shall
be defined as the actual knowledge of any corporate officer of Seller and Larry C. Gardner, Director of Worldwide Facilities.

  ARTICLE VII.
 ENVIRONMENTAL MATTERS  

    A. Condition of Property. Buyer acknowledges that Buyer will have an
opportunity to commission an independent investigation as to the environmental condition of the Property. Except as specifically set forth in this Agreement,
 Seller makes no representations or
warranties to Buyer as to the condition of the Property, any restrictions related to the development of
the Property, the applicability of any presently existing or future governmental law, regulation or requirement pertaining to the Property, including, but
not limited to, regulations concerning zoning, land use, or the suitability of the Property for any purpose whatsoever. Buyer acknowledges that Seller has no expertise concerning Hazardous Materials and that, except as otherwise provided in this Agreement,
Buyer is not relying upon any
representation, or the lack of same, with respect to Hazardous Materials as they apply to conditions on the Property. Further, except for Seller's representations and warranties contained in this Agreement and such warranties that may arise by law under the Warranty Deed, Buyer acknowledges that it
is acquiring the Property in an "AS IS" condition and shall assume the risk that adverse physical conditions may exist on the Property.

    B. Release from Liability. Buyer hereby waives, unconditionally releases, covenants not
to sue, acquits and forever discharges (i) Seller, its successors, assigns, affiliates, agents, lenders and guarantors and
(ii) Seller's directors, officers, shareholders, employees, and partners, from and against any and all claims, actions, causes of action,
demands, rights, damages, costs, expenses, or compensation whatsoever, direct or indirect, known or unknown, foreseeable or unforeseeable, present and future, for Environmental
Damages to Buyer or the Property, arising out of any violation or alleged
violation of Environmental Requirements or the presence of Hazardous Materials on, under, or about the Property. This covenant by Buyer shall survive and be enforceable in accordance with its terms following
the consummation of this transaction and shall not be merged with or into the Warranty Deed delivered by Seller to Buyer.

C. Obligation to Indemnify, Defend, and Hold Harmless.

    1.  Limited Environmental Indemnification. Buyer, its successors, assigns and guarantors, agree to indemnify, defend,
reimburse, and hold harmless Seller, its successors, assigns, affiliates, agents, lenders, and guarantors, and Seller's directors, officers, shareholders,
employees, and partners, from and against

15

any
and all Environmental Damages arising as follows: (i) from the presence of Hazardous
Materials upon, about, or beneath, or migrating to or from, the Property before Closing, or the violation or alleged violation of
any Environmental Requirements pertaining to the Property and the activities thereon, of which environmental condition or violation Buyer had knowledge
before Closing; or (ii) from the presence of Hazardous Materials upon, about, or beneath, or
migrating to or from, the Property after Closing, as a result of the activities of Buyer, its successors,
assigns, affiliates, agents, or third parties, or the violation or alleged violation of any Environmental
Requirements pertaining to the Property and the activities thereon which occur after Closing. The parties agree Buyer shall have the burden of proving in any litigation that the
environmental condition or violation giving rise to the Environmental Damages existed prior to the date of Closing.

    2.  Environmental Conditions of which Buyer Had No Knowledge. Notwithstanding any provision in this Agreement to the
contrary, except as limited in Article XII. H., for a period of one year from the date of Closing, if Buyer or the Property,
 or either of them, incurs any Environmental
Damages arising from the presence of Hazardous Materials upon, about, or beneath the Property or migrating to or from the
Property, or arising in any manner whatsoever out of the violation
or alleged violation of any Environmental Requirements pertaining to the Property and the activities
thereon, which Environmental Damages were caused by Seller or Seller's predecessors in interest in the
Property and of which Buyer had no knowledge at the time of Closing, Seller, its successors and assigns,
agree to indemnify, defend, reimburse, and hold harmless
(i) Buyer, its successors, assigns, affiliates, agents, lenders, and guarantors and
(ii) Buyer's directors, officers, shareholders, employees, and partners, from and against any such Environmental Damages.
Seller's obligations under this paragraph shall not be merged into the Warranty Deed or other transfer or closing documents but shall survive the Closing and expire automatically
on, and be of no further force nor effect on or after, the first anniversary of the Closing
Date. A condition precedent to the enforceability of Seller's obligations under this
paragraph is that Buyer will give Seller written notice of any claim made under this paragraph within
twelve (12) months of the Closing Date and in the manner set forth in Article XII. A.

    3.  Recoverable Expenses. These obligations shall include, but are not limited to, the burden and expense of defending
all claims, suits, and administrative proceedings (with counsel reasonably approved by the indemnified party), even if such claims, suits, or proceedings are groundless, false, or fraudulent, and
conducting all negotiations of any description, and paying and discharging, when and as the same become due, any and all judgments, penalties or other sums due against such indemnified persons or
parties.

D. Definitions.

    1.  Hazardous Material. "Hazardous Material" means any substance:

    (i)  the
presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action, policy, or common law;
or

    (ii) which
is or becomes defined as a "hazardous waste," "hazardous substance," "hazardous material," "solid waste," pollutant, or contaminant under any federal, state,
or local statute, regulation, rule, or ordinance or amendments thereto including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §
9601 et seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.);
or

    (iii) which
is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency, or instrumentality of the United States, the State of Oregon or any political subdivision thereof; or

16

    (iv) the
presence of which on the Property causes or threatens to cause a nuisance upon the Property or to adjacent properties or poses or threatens to pose a hazard
to the health or safety of persons on or about the Property; or

    (v) the
presence of which on adjacent properties could constitute a trespass; or

    (vi) which
contains gasoline, diesel fuel, or other petroleum hydrocarbons; or

    (vii) which
contains polychlorinated biphenyls (PCBs), asbestos, urea formaldehyde foam insulation, or radon gas.

    2.  Environmental Requirements. "Environmental Requirements" means all
applicable present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, and similar items, of all
governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, State of Oregon, and political subdivisions thereof and all applicable judicial,
administrative, and regulatory decrees, judgments, and orders relating to the protection of human health or the environment, including, without limitation:

    (i)  all
requirements, including but not limited to those pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges,
releases, or threatened releases of Hazardous Materials; and

    (ii) all
requirements pertaining to the protection of the health and safety of employees or the public.

    3.  Environmental Damages. "Environmental Damages" means all claims,
judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs, and expenses of investigation and defense of any claim, whether or not such claim is
ultimately defeated, and of any good faith settlement of judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation
reasonable attorneys' fees and disbursements and consultants' fees, any of which are incurred at any time as a result of the existence of Hazardous
Materials upon, about, beneath the Property or migrating or threatening to migrate to or from the Property, or the existence of a
violation of Environmental Requirements pertaining to the Property, regardless of whether the existence of such Hazardous
Materials or the violation of Environmental Requirements arose prior to the Seller's ownership or operation of the Property, and including, without limitation:

    (i)  damages
for personal injury, or injury to property or natural resources occurring upon or off of the Property,
foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, the cost of demolition and reb uilding of any improvements on real property, interest and penalties;

    (ii) fees
incurred for the services of attorneys, consultants, contractors, experts, and laboratories and all other costs incurred in connection with the investigation
or remediation of such Hazardous Materials or violation of Environmental Requirements including, but not
limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remediation, removal, response, abatement, containment, closure, restoration, or monitoring work
required by any federal, state, or local governmental agency or political subdivision, or reasonably necessary to make full economic use of the Property or any other property or otherwise expended
in connection with such conditions, and including without limitation any attorneys'
fees, costs, and expenses incurred in enforcing this Agreement or collecting any sums due hereunder; and

    (iii) liability
to any third person or governmental agency to indemnify such person or agency for costs expended in connection with the items referenced in subparagraph
(ii) herein.

17

  ARTICLE VIII.
 REPRESENTATIONS AND WARRANTIES OF BUYER  

    Buyer hereby represents and warrants to Seller as follows:

    A. Authority of Buyer. Buyer is duly organized and validly existing under the laws of
the State of Oregon and is in good standing under the laws of the State of Oregon. This Agreement and all documents executed by Buyer which are to be
delivered to Seller at the Closing are or at the time of Closing will be duly authorized, executed, and
delivered
by Buyer, and are or at the Closing will be legal, valid and binding obligations of Buyer, and do not and at
the time of Closing will not violate any provisions of any agreement or
judicial order to which Buyer is a part, or to which it is subject.

B. Buyer's Independent Investigation.

    1.  Buyer acknowledges and agrees that it will be given a full opportunity to inspect and investigate the Property, either independently or through agents of Buyer's choosing. The closing of escrow for the
purchase of the Property by Buyer shall conclusively constitute Buyer's approval of each and every
aspect of the Property. Except as otherwise set forth herein, no investigation by Buyer shall obviate,
limit or diminish any of the representations, warranties or covenants of Seller set forth in this Agreement, or affect the remedies of Buyer for Seller's breach of this Agreement.

    2.  EXCEPT
AS SPECIFICALLY PROVIDED IN THIS AGREEMENT AND WARRANTIES ARISING BY LAW UNDER THE WARRANTY DEED, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS, WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS
SPECIFICALLY
PROVIDED IN THIS AGREEMENT, AND WARRANTIES ARISING BY LAW UNDER THE WARRANTY DEED, BUYER IS NOT RELYING
ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER OR ITS AGENTS OR BROKERS AS TO ANY MATTERS CONCERNING THE
PROPERTY, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality,
nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, and physical
condition of utilities serving the Property, (iv) the development
potential of the Property, and the use, habitability, merchantability, fitness, suitability, value or adequacy of the Property for any particular purpose,
(v) the zoning or other legal status of the Property or any
other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of
any governmental or quasi-governmental entity or of any other person or entity, and (vii) the presence of Hazardous Materials on, under or about
the Property or the adjoining or neighboring property,

    C. Buyer's Insurance. Buyer shall maintain commercial general liability insurance
insuring Buyer and its contractors, consultants and agents against any liability arising out of or in connection with any entry or inspection of the Property and all areas appurtenant thereto prior to the Closing Date. Such insurance shall be in the
amount of not less than ONE MILLION DOLLARS ($1,000,000) combined single limit for injury to or death of one or more persons in an occurrence, and for damage to tangible property (including loss of
use) in an occurrence. The policy shall insure the contractual liability of Buyer covering the indemnities herein and shall (i) name Seller as an
additional insured, (ii) contain a cross-liability provision, and (iii) contain a provision that "the insurance provided by Buyer hereunder shall be primary and non-contributing with any other
insurance available to Seller." Buyer shall provide Seller with evidence of
such insurance coverage prior to any entry or inspection of the Property.

18

 

  ARTICLE IX.
 COVENANTS OF SELLER AND BUYER  

    Seller and Buyer covenant and agree as follows:

    A. Indemnification by Seller.  Subject to Article XII.H., Seller hereby
agrees to protect and indemnify Buyer and hold Buyer harmless from and against any and all claims, demands, liabilities, liens, costs expenses, penalties,
damages and losses, including, without
limitation, reasonable attorneys' fees and costs suffered by Buyer as a direct result of any breach by Seller of any of Seller's representations, warranties or covenants herein, which breaches are raised in
writing to Seller within twelve (12) months of the Closing Date.

    B. Indemnification by Buyer. Buyer hereby agrees to protect and indemnify Seller and hold Seller harmless from and against any and all claims, demands, liabilities, liens, costs,
expenses, penalties, damages and losses, including, without limitation, reasonable attorneys' fees and costs suffered by Seller as a direct or indirect
result of any breach by Buyer of any of Buyer's representations, warranties or covenants herein.
Further, Buyer shall indemnify and hold Seller harmless from and against any and all damages, demands,
claims, losses, liabilities, injuries, penalties, fines, liens, judgments, suits, actions, investigations, proceedings, costs or expenses whatsoever, (including, without limitation, reasonable
attorneys' and experts' fees and costs and, in the event of any release of Hazardous Materials caused by Buyer, investigation and remediation costs) arising
out of or relating to any physical harm, physical damage or personal injury or death caused by entry
on the Property by Buyer or its agents, employees or contractors prior to the Closing Date in the course of
performing the inspections, testings or inquiries provided for in this Agreement. Without limiting the generality of the foregoing indemnity, Buyer shall
remove any mechanic's
lien or other lien which may be recorded against the Property, or any portion thereof, by any party providing labor, materials or services at the
request of Buyer. The foregoing indemnity shall survive beyond the Closing, or, if the sale is not
consummated, beyond the termination of this Agreement.

  ARTICLE X.
 LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION  

    If, prior to Closing, the Property is destroyed or a Material Part is
damaged, or if condemnation proceedings are threatened or commenced against a Material
Part or all of the Property, Buyer shall have the right, exercisable by giving
notice of such decision to Seller within five (5) business days after receiving written notice from Seller of such damage, destruction or condemnation
proceedings, to terminate this Agreement, in which
case, this Agreement shall be deemed null and void, neither party shall have any further rights or obligations hereunder, and the Escrow Holder shall
promptly refund the Deposit, and all interest accrued thereon, to Buyer. The term "Material Part" shall be
deemed to mean any damage, destruction, or condemnation the
cost of repair or replacement of which is fifty percent (50%) or more of the Purchase Price. If Buyer elects to accept the Property in its then condition, all proceeds of insurance or
condemnation awards payable to Seller by reason of such damage, destruction or condemnation shall be paid or assigned to Buyer. Buyer shall be bound to purchase the Property for
the full Purchase Price as required by the terms hereof, without regard to the occurrence or effect of any such non-material damage to the Property or
non-material destruction of any improvements thereon or non-material condemnation of any portion of the
Property, provided that: (a) upon the Closing, there shall be a credit against the Purchase Price equal
to the amount of any insurance proceeds or condemnation awards collected by Seller as a result of any such damage or destruction or condemnation, less any sums expended by Seller prior to the Closing towards the restoration or repair
of the Property as a result of such casualty or condemnation; and (b) insurance or condemnation proceeds available to Buyer together with restoration
or repairs performed by Seller are sufficient to cover the cost of
restoration. If the proceeds or awards have not been collected as of the Closing, then

19

such
proceeds or awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for
sums it expended prior to the Closing to repair or restore the Property.

  ARTICLE XI.
 POSSESSION; ACCESS  

    Possession of the Property shall be delivered to Buyer on the Closing Date, provided, however, that without limiting any other provisions of this Agreement, Seller shall afford authorized representatives of Buyer reasonable access upon prior written notice to
the Property for the purpose of satisfying Buyer with respect to the representations, warranties, and
covenants of Seller contained herein and with respect to satisfaction of any conditions precedent to the Closing contained herein, except that Buyer shall not be allowed to perform invasive testing activities
on the Property, including but not limited to, soil borings or monitoring well installations, except as necessary to conduct reasonable environmental
audits and soil studies with respect to the Property. Buyer shall immediately provide the results of
such audits or studies to Seller. Buyer shall maintain as strictly confidential the results of such
audits and studies. Seller agrees to allow Buyer and its agents or representatives reasonable access to
the Property (during regular business hours or such other times agreed upon by the parties) for the purpose of physical inspections of the Property, subject
to, and in accordance with, the terms and conditions of this Agreement. All such
inspections shall be at Buyer's sole expense and Buyer assumes all risks associated with such entry. In
connection with any entry by Buyer, or its agents, employees, consultants or contractors onto the Property for the purpose of Buyer's review and inspection of the Property, Buyer shall give Seller
reasonable advance
written request of Buyer's request for entry and shall conduct such entry and any inspections in connection therewith so as to minimize, to the greatest
extent possible, disruption at the Property or interference with Seller's business and otherwise in a
manner reasonably acceptable to Seller.

  ARTICLE XII.
 MISCELLANEOUS  

    A.  Notices. Any notice required or permitted to be given under this Agreement shall be in writing and sent by Federal Express or other recognized overnight courier, hand
delivery, or United States mail (certified mail,
postage prepaid, return receipt requested) and addressed as follows, and shall be

20

deemed
to have been given upon the date of delivery (or refusal to accept delivery) as indicated on the return receipt or other evidence of delivery or attempted delivery provided by the delivery
service:

	If to Seller:	 	 	 	Mentor Graphics Corporation

8005 SW Boeckman Road

Wilsonville, Oregon 97070-7777

Attn: Larry Gardner
	 

with a copy to:	 
 	 

(a	 
)	 

Mentor Graphics Corporation

8005 SW Boeckman Road

Wilsonville, Oregon 97070-7777

Attn: Karen Thomson, Esq.
	 

 	 
 	 

(b	 
)	 

Martin Bischoff et. al. LLP

888 S.W. Fifth Avenue

Suite 900

Portland, Oregon 97204

Attn: James T. Dunn, Esq.
	 
 If to Buyer:	 
 	 

 	 
 	 

IN FOCUS Systems, Inc.

27700B S.W. Parkway Avenue

Wilsonville, Oregon 97070

Attn: Tim Carlson,Esq.
	 

with a copy to:	 
 	 

(a	 
)	 

IN FOCUS Systems, Inc.

27700B S.W. Parkway Avenue

Wilsonville, Oregon 97070

Attn: Sharon Hayes
	 

 	 
 	 

(b	 
)	 

Garvey, Schubert & Barer

Eleventh Floor

121 S.W. Morrison Street

Portland, Oregon 97204

Attn: Robert R. Griffith, Esq.

or
such other address as either party may from time to time specify in writing to the other in the manner specified above.

    B.  Brokers and Finders. In connection with the transaction contemplated by this Agreement, Seller has agreed to
pay a brokerage commission to Trammell Crow
Company in accordance with the terms of its separate agreement with Seller, with respect to the sale of the Property. Buyer has agreed to pay a commission to Buyer's agent, Corporate Property Services pursuant to its Separate Agreement with
said agent.
Buyer and Seller represent and warrant that there are no other brokers or finders involved in this
transaction and agree to indemnify and hold each other harmless for any claims by any other brokers or finders that arise out of the indemnifying party's own conduct.

21

    C.  Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors, heirs, administrators and assigns, except that Buyer's interest under this Agreement may not be assigned, encumbered or otherwise transferred, whether voluntarily,
involuntarily, by operation of law or otherwise, without the prior written consent of Seller, which consent Seller may withhold in its sole
discretion.

    D.  Amendments. This Agreement may be amended or modified only by a
written instrument executed by both parties.

    E.  Allocation of Purchase Price. Buyer and Seller agree to allocate the Purchase
Price pursuant to the schedule affixed to this Agreement as Exhibit J (the "Allocation Schedule"). The
Seller and the Buyer agree to report an allocation of the Purchase
Price for the Property in a manner entirely consistent with the Allocation Schedule, and Seller and Buyer agree to act in accordance with the Allocation Schedule in the preparation of financial
statements and the filing of all tax returns (including the filing of federal income tax returns for the taxable year that includes the Closing Date)
and in the course of any tax audit, tax review or tax litigation relating thereto.

    F.  Confidentiality and Return of Documents. Buyer and Seller shall each maintain as strictly confidential
any and all material or information about the other or, in the case of Buyer and its agents, employees, consultants and contractors, about the Property,
including results of
any on-site studies or testing, which is not publicly known or generally available at the time of disclosure, and shall not disclose such information to any third party, except, in the
case of information about the Property, to Buyer's lender or prospective lenders, insurance and
reinsurance firms, attorneys, or environmental assessment firms, as may be reasonably required for the consummation of the transaction contemplated hereunder; provided, however, that Buyer shall inform
such parties as to the confidentiality of such materials and Buyer shall cause such
parties to abide by the confidentiality provisions of this Agreement. Further, Buyer agrees not to use
or to allow to be used any such information for any purpose other than to determine whether to proceed with the contemplated purchase or to obtain a loan in connection therewith or to obtain
insurance. This provision shall survive the Closing or any termination of this Agreement. If the Closing does
not occur for any reason, Buyer shall return to Seller all agreements, documents, studies, reports and other materials or information pertaining to
the Property delivered by Seller or Seller's agents to Buyer
pursuant hereto.

    G.  Press Releases. Buyer and Seller and their Brokers agree not to make any public announcement or issue
any press release concerning the contemplated purchase of the Property, the signing of this Agreement or the Closing, except a joint announcement, in
mutually
acceptable form.

    H.  Continuation and Survival of Representations and Warranties. All covenants, representations and warranties by the
respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall remain true and correct as of the time of
the Closing Date. All covenants, representations, warranties and indemnities by the respective parties set forth herein or made in writing pursuant to
this Agreement are intended to and shall survive the execution and delivery of this Agreement, the
delivery and recording of the Warranty Deed, and the transfer of title. If Buyer closes the purchase of the Property in accordance with this Agreement, Buyer shall
be deemed to have released, covenanted not to sue, and waived any rights or claims against Seller arising out of any inaccuracy in the representations
and warranties contained in this Agreement if Buyer had actual knowledge of such inaccuracy prior to the Closing Date. Seller shall have no liability to Buyer for any breach of any of the representations and warranties contained herein except to the extent that
the aggregate amount of all
claims of Buyer under this Agreement exceeds ONE HUNDRED THOUSAND DOLLARS ($100,000) and only in the
event that such claims are made by written notice given to Seller within twelve (12) months of the Closing
Date. Notwithstanding the foregoing, Buyer agrees that, in the event Buyerasserts
a breach of one or more of the representations or warranties regarding title for the Property set forth in this Agreement, then Buyer shall not commence an action

22

against
Seller for such breach but shall instead pursue such claims against the Title Company which have
issued a title policy for this transaction.

    I.  Interpretation. Whenever used herein, the term "including" shall be deemed to be followed by the words "without
limitation." Words used in the singular number shall include the plural, and vice-versa, and any gender shall be deemed to include each other gender. The captions and headings of the
Articles and Sections of this Agreement are for convenience of reference only, and shall not be deemed to define or limit the provisions hereof.

    J.  Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon.

    K.  Merger of Prior Agreements. This Agreement (including the exhibits
hereto) constitutes the entire Agreement between the parties with respect to the purchase and sale of the Property, supersedes all prior and contemporaneous
agreements and understandings between the parties hereto relating to the subject matter hereof, and
is a completely integrated contract.

    L.  Attorneys' Fees. In the event either party brings any suit or other proceeding with respect to the subject matter or
enforcement of this Agreement or with respect to a breach of a representation or warranty hereunder, the prevailing party (as determined by the court,
agency or other authority before which such suit or proceeding is commenced) shall, in addition to such other relief as may be awarded, be entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred (including, without limitation, attorneys' fees, expenses and costs of investigation incurred in appellate proceedings, costs incurred in establishing the right to
indemnification, or in any action or participation in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code, 11 United States Code Sections 101 et seq., or any
successor statutes).

    M. Time of the Essence. Time is of the essence of this Agreement.

    N.  Joint Venture. By entering into this Agreement the Buyer and Seller do not intend to, and nothing contained in this Agreement shall, create any partnership, joint venture or other agreement between Buyer and
Seller. No term or provision of this Agreement is intended to be, or shall be, for the benefit of any
person, firm, organization or corporation not a party hereto, and no such other person, firm, organization or corporation shall have any right or cause of action hereunder.

    O.  Authority. The parties signing below represent and warrant that they have the requisite authority to bind the
entities on whose behalf they are signing.

    P.  Further Acts. Each party shall, at the request of the other, execute, acknowledge (if appropriate) and deliver
whatever additional documents, and do such other acts, as may be reasonably required in order to accomplish the intent and purposes of this Agreement.

    Q.  Agreement Not to Benefit Third Parties. This Agreement is made for
the sole benefit of Seller and Buyer, and no other person or entity shall be deemed to have any privity
of contract under this Agreement nor any right to rely on this Agreement to any extent for any purpose
whatsoever, nor have any right of action of any kind on this Agreement nor be deemed to be a third party beneficiary under this Agreement.

    R.  Severability. If any provision of this Agreement or its application
to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to
other persons or circumstances, other than those to which it is held invalid, shall not be
affected thereby and shall be enforced to the furthest extent permitted by law; provided that the invalidity of such provision does not materially adversely affect the benefits accruing to any party
hereunder.

23

    S.  Facsimile Signatures. Buyer and Seller (i) have agreed to
permit the use, from time to time and where appropriate, of telecopied signatures in order to expedite the transaction contemplated by this Agreement,
(ii) each intend to be bound by their respective telecopied signatures, (iii) are aware that the other will rely on the telecopied signature, and (iv) acknowledge such reliance
and waive any defenses to the enforcement of the documents effecting the transaction contemplated by this Agreement based on the fact that a signature
was sent by telecopy.

    T.  Form 1099-S. For the purpose of complying with Section 6045 of the Internal Revenue Code
of 1986, as amended, Escrow Holder shall be deemed the "person responsible for closing the transaction," and shall be responsible for obtaining
information necessary to file with the Internal Revenue Service Form 1099-S (Statement for Recipients of Proceeds From Real Estate, Broker and Barter Exchange Transactions).

    U.  Business Days; Deadlines. As used in this Agreement and any document
executed by any party hereto, the term "days" means calendar days and "business days" means all days of the year except Saturdays, Sundays, and federal holidays recognized by the Federal Reserve Bank
of San Francisco. If a deadline provided in this Agreement, or any document executed by any party hereto to another party hereto at the Closing, falls on a
day other than a business day, such deadline shall be extended until the first business day thereafter.

    V.  Counterparts. This agreement may be executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.

    W.  Survival of Obligations. The provisions of this Agreement shall not
be deemed to have merged into the Warranty Deed or other transfer or closing documents, but shall survive the Closing and continue in full force and
effect. Al l covenants, warranties, representations, agreements and indemnities contained in this Agreement shall be deemed to have been made as of the
date of the execution hereof, and also as of the date of Closing. No provision of this section or this Agreement shall extend the scope or term of such
warranties and representations. All items and covenants to be performed after Closing shall survive the Closing and transfer of title to Buyer.

    X.  Governmental Approvals/Permits. Prior to the Closing Date,
Seller agrees to cooperate with Buyer and join in executing any applications reasonably required by Buyer in connection with
Buyer's attempts to obtain building or other necessary governmental permits and
approvals for the construction of an office and manufacturing facility on the Property.

    Y.  Foreign Investment in Real Property Tax Act. Seller is not a "foreign person" as such term is defined in IRC
Section 1445, and Seller will deliver at Closing a certification of non-foreign status in form required by IRS Regulations as set forth in Exhibit K.

    THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND
REGULATIONS, WHICH, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH
LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND EXISTENCE OF FIRE
PROTECTION FOR STRUCTURES.

24

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	SELLER:	 	MENTOR GRAPHICS CORPORATION,

an Oregon Corporation,
	 

 	 
 	 

By:	 
 	 

/s/ [ILLEGIBLE]   

	 

 	 
 	 

Its:	 
 	 

EVP

	 
 BUYER:	 
 	 
 IN FOCUS SYSTEMS, INC.,

an Oregon Corporation
	 

 	 
 	 

By:	 
 	 

/s/ JOHN V. HARKER   

	 

 	 
 	 

Its:	 
 	 

John V. Harker, Chairman, President & CEO

25

QuickLinks

PURCHASE AND SALE AGREEMENT

between

MENTOR GRAPHICS CORPORATION, an Oregon corporation (Seller)

and

IN FOCUS SYSTEMS, INC., an Oregon corporation (Buyer)

Property: 28.9 acres of land City of Wilsonville, Clackamas County, Oregon

PURCHASE AND SALE AGREEMENT TABLE OF CONTENTS

INDEX TO EXHIBITS

PURCHASE AND SALE AGREEMENT

ARTICLE I. PROPERTY

ARTICLE II. PURCHASE PRICE

ARTICLE III. TITLE TO PROPERTY

ARTICLE IV. CONDITIONS TO CLOSING/DUE DILIGENCE

ARTICLE V. CLOSING AND ESCROW

ARTICLE VI. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

ARTICLE VII. ENVIRONMENTAL MATTERS

ARTICLE VIII. REPRESENTATIONS AND WARRANTIES OF BUYER

ARTICLE IX. COVENANTS OF SELLER AND BUYER

ARTICLE X. LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION

ARTICLE XI. POSSESSION; ACCESS

ARTICLE XII. MISCELLANEOUS<PAGE>

                      METAPATH SOFTWARE INTERNATIONAL, INC.

                            SHAREHOLDERS AGREEMENT
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                           PAGE
                                                                           ----
<S>                                                                         <C>
1.  Preemptive Rights.........................................................1

    1.1   Notice..............................................................1
    1.2   Exercise of Preemptive Rights.......................................2
    1.3   Sale to Third Parties...............................................2
    1.4   Exceptions..........................................................2

2.  Transfers by Shareholder..................................................3

    2.1   Right of First Offer................................................3
    2.2   Co-Sale Right.......................................................5
    2.3   Transfer Restrictions...............................................6

3.  Election of Directors.....................................................6

    3.1   Board Representation................................................6
    3.2   Mechanics of Designation............................................7
    3.3   Appointment of Directors............................................7
    3.4   Removal.............................................................7
    3.5   No Revocation.......................................................8
    3.6   Change in Number of Directors.......................................8

4.  Information Rights........................................................8

    4.1   Delivery of Financial Statements....................................8
    4.2   Inspection..........................................................8
    4.3   Nondisclosure Agreement.............................................8

5.  Covenant of Shareholders..................................................8

6.  Termination...............................................................8

    6.1   Termination Events..................................................8
    6.2   Termination With Respect to a Particular Shareholder................9
    6.3   Removal of Legend...................................................9

7.  Miscellaneous.............................................................9

    7.1   Successors and Assigns..............................................9
    7.2   Amendments and Waivers..............................................9
    7.3   Notices.............................................................9
    7.4   Severability........................................................9
    7.5   Governing Law......................................................10

</TABLE>
                                     -i-

<PAGE>

                                TABLE OF CONTENTS

                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----

   <S>                                                                      <C>
    7.6   Counterparts.......................................................10
    7.7   Titles and Subtitles...............................................10
    7.8   Partners, Members and Affiliates...................................10
</TABLE>
                                      -ii-
<PAGE>

                    METAPATH SOFTWARE INTERNATIONAL, INC.
                           SHAREHOLDERS AGREEMENT

     This Shareholders Agreement (the "AGREEMENT") is made and entered into
as of December 4, 1998 by and among Metapath Software International, Inc., a
California corporation (the "COMPANY"), the former holders of capital stock
of Metapath Software Corporation, a Delaware corporation ("METAPATH"), listed
on Exhibit A hereto (the "METAPATH SHAREHOLDERS") and the former holders of
capital stock of Mobile Systems International Holdings Limited, a company
incorporated under the laws of England and Wales ("MSIH"), listed on
Exhibit B hereto (the "MSIH SHAREHOLDERS," and together with the Metapath
Shareholders, the "SHAREHOLDERS").

                                  RECITALS

     A.  MSIH, Metapath and the Company have entered into an Agreement and
Plan of Reorganization dated September 21, 1998 (the "REORGANIZATION
AGREEMENT"), which provides for transactions resulting in MSIH and Metapath
becoming wholly-owned subsidiaries of the Company (the "TRANSACTIONS") and
the issuance by the Company to the shareholders of MSIH and Metapath of
shares of the Company's Common Stock in exchange for the shares of Metapath
and MSIH capital stock.

     B.  As a condition to the closing of the Transactions, the Shareholders
and the Company have agreed to certain restrictions on transfer of shares of,
or securities convertible into or exercisable for shares of, any class of the
Company's capital stock ("SECURITIES") held by the Shareholders, certain
rights of first refusal, certain rights of co-sale, certain representation
rights with respect to the Company's board of directors (the "BOARD OF
DIRECTORS") and certain information rights, all according to the terms and
subject to the conditions set forth in this Agreement.

                                  AGREEMENT

     The parties agree as follows:

     1.  PREEMPTIVE RIGHTS. Subject to the terms and conditions specified in
this Section 1, the Company hereby grants to each Shareholder a right of
first offer with respect to sales by the Company of Securities ("New
Securities") after the Effective Time (as defined in the Reorganization
Agreement). Each time the Company proposes to offer any New Securities, the
Company shall first make an offering of such New Securities to each
Shareholder in accordance with the following provisions:

         1.1  NOTICE.  The Company shall deliver a notice (a "NEW ISSUANCE
NOTICE") to the Shareholders stating (a) its bona fide intention to offer
such New Securities, (b) the number of such

<PAGE>

New Securities to be offered and (c) the price and terms upon which it
proposes to offer such New Securities.

         1.2  EXERCISE OF PREEMPTIVE RIGHTS.  Within ten (10) calendar days
after delivery of the New Issuance Notice, a Shareholder may, by written
notice to the Company, elect to purchase, at the price and on the terms
specified in the New Issuance Notice, up to that portion of such New
Securities which equals the proportion that the number of Securities then
held by such Shareholder on an as-converted basis bears to the aggregate
number of Securities held by all Shareholders. The Company shall promptly, in
writing, inform each Shareholder purchasing all the shares available to it
(each, a "FULLY-EXERCISING SHAREHOLDER") of any other Shareholders' failure
to do likewise (an "OVERALLOTMENT NOTICE"). During the five (5)-day period
commencing after the date of delivery the Overallotment Notice (the
"OVERALLOTMENT PERIOD"), each Fully-Exercising Shareholder shall be entitled
to obtain that portion of the New Securities for which Shareholders were
entitled to subscribe but which were not subscribed for by the Shareholders
that is equal to the proportion that the number of Securities held by such
Fully-Exercising Shareholder bears to the aggregate number of Securities held
by all Fully-Exercising Shareholders.

          1.3  SALE TO THIRD PARTIES.  The Company may, during the ninety
(90)-day period following the expiration of the Overallotment Period (the
"THIRD PARTY PERIOD"), offer New Securities not purchased by Shareholders
pursuant to Section 1.2 to any person or persons at a price not less than and
upon terms no more favorable to the offeree than those specified in the New
Issuance Notice. If the Company does not enter into an agreement for the sale
of the New Securities within the Third Party Period, or if such agreement is
not consummated within ninety (90) days of the execution thereof, the right
provided by this Section 1 shall be deemed to be revived and such New
Securities shall not be sold to a third party unless first reoffered to the
Shareholders in accordance with this Section 1.

          1.4  EXCEPTIONS.  The term "New Securities" shall exclude, and the
preemptive rights in this Section 1 shall not be applicable to, (a) up to
[X shares where X = the number of shares required to cover existing MSIH and
Metapath options assumed or substituted in the Transactions + 2,000,000]
shares (as adjusted for stock splits, dividends and combinations), or such
greater number as is approved by the Board of Directors, of the Company's
Common Stock (or options therefor) granted to employees, consultants and
directors, pursuant to plans or agreements approved by the Board of Directors
for the primary purpose of soliciting or retaining such employees',
consultants'  and directors' services; (b) shares of the Company's Common
Stock sold to the public pursuant to or in conjunction with a registration
statement filed with and declared effective under the Securities Act of 1933,
as amended; (c) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities that were (1) outstanding as of the
Effective Time or (2) where the issuance of the convertible or exercisable
securities was subject to and made in compliance with this Section 1; (d)
securities issued in connection with a bona fide business acquisition by the
Company provided that (1) the aggregate value of the securities issued (as
determined by the Board of Directors of the Company) is not more than Five
Million Dollars ($5,000,000), or (2) the acquisition

                                  -2-

<PAGE>

transaction is approved by at least 75% of the directors then serving on the
Board of Directors; (e) securities issued in connection with the Transactions
or pursuant to obligations of MSIH or Metapath existing prior to the closing
of the Transactions which have been assumed by the Company pursuant to the
Reorganization Agreement; or (f) any other issuance of new securities which,
together with any prior issuances of stock under this clause (f) do not
exceed one percent (1%) of the outstanding capital stock of the Company at
the time such issuance occurs.

   2.    TRANSFERS BY SHAREHOLDER.

         2.1  RIGHT OF FIRST OFFER. Before any Shareholder may sell or
otherwise transfer any Securities, the Company and the other SHAREHOLDERS
shall have a right of first offer to purchase the Securities on the terms and
conditions set forth in this Section 2.1 (the "RIGHT OF FIRST OFFER"). Each
time a Shareholder proposes to sell or otherwise transfer any such
Securities, such Shareholder (the "ROFO SELLING SHAREHOLDER") shall first make
an offering of such Securities (the "OFFERED SECURITIES") to the Company and
the other SHAREHOLDERS in accordance with the following provisions:

              (a)  NOTICE. The ROFO Selling Shareholder shall deliver a
notice (an "OFFER NOTICE") to the Company stating (i) its bona fide intention
to offer such Securities, (ii) the number of such Securities to be offered,
and (iii) the price and terms upon which it proposes to offer such
Securities. The Company shall promptly forward copies of the Offer Notice to
the other SHAREHOLDERS.

              (b) EXERCISE OF RIGHT OF FIRST OFFER. At any time within thirty
(30) days after the Offer Notice (the "COMPANY EXERCISE PERIOD"), the Company
may, by giving written notice to the ROFO Selling Shareholder, elect to
purchase all or part of the Offered Securities at the price and on the terms
specified in the Offer Notice.

              (c) SHAREHOLDERS' RIGHT OF FIRST OFFER. The Company agrees that
in the event that the Company declines to exercise in full the Right of First
Offer set forth in Section 2.1(b), the Company will provide each Shareholder
with notice of such determination at least fifteen (15) days before the end of
the Company Exercise Period. Each Shareholder shall then have the right to
submit written notice of its irrevocable commitment to exercise its Right of
First Offer within fifteen (15) days after the Company's notice (the
"SHAREHOLDERS' ROFO EXERCISE PERIOD"), on a pro rata basis, based upon the
number of Securities held by such Shareholder relative to the aggregate
number of Securities held by all other Shareholders exercising a right of
purchase pursuant to this Section 2. Upon expiration or exercise of the Right
of First Offer, the Company will provide notice to all Shareholders as to
whether or not the Right of First Offer has been or will be exercised by the
Company and/or the Shareholders. If any Shareholders do not exercise in full
their Right of First Offer, the Securities that would otherwise be allocated
to such non-exercising Shareholders shall be allocated to each exercising
Shareholder on a pro-rata basis (based upon the number of Securities held by
such Shareholder relative to the aggregate number of Securities held by all
such Shareholders exercising a right of purchase pursuant to this Section
2.1), provided that the

                                      -3-

<PAGE>

Shareholders must exercise the Right of First Offer, if at all, prior to the
expiration of the Shareholders' ROFO Exercise Period.

              (d)  PAYMENT. Payments made by the Company and/or the
Shareholders in connection with their exercise of the Right of First Offer
shall be made (by check or wire transfer), by cancellation of all or a portion
of any outstanding indebtedness of the ROFO Selling Shareholder to the Company
(or, in the case of purchase by a Shareholder, by cancellation of all or a
portion of any outstanding indebtedness of the ROFO Selling Shareholder to
the purchasing Shareholder), or by any combination thereof within thirty (30)
days after receipt of an Offer Notice, or in the manner and at the times set
forth in the Offer Notice.

              (e)  SELLING SHAREHOLDER'S RIGHT TO TRANSFER. If all of the
Offered Securities are not purchased by the Company and/or the Shareholders
as provided in this Section 2.1, then the ROFO Selling Shareholder may sell or
otherwise transfer such Offered Securities at the price specified in the
Offer Notice (or at a higher price) provided that such sale or other transfer
is consummated within sixty (60) days after the end of the Company ROFO
Exercise Period and provided further that (i) any such sale or other transfer
is effected in accordance with any applicable securities laws and (ii) the
proposed transferee(s) agree(s) in writing that the provisions of this
Agreement shall continue to apply to the Securities in the hands of such
proposed transferee(s). If the Offered Securities are not transferred within
such period, or if the ROFO Selling Shareholder proposes to change the price
or other terms to make them more favorable to the proposed transferee(s), a
new Offer Notice shall be given to the Company, and the Company and
Shareholders shall again be offered the Right of First Offer before any
Securities held by the ROFO Selling Shareholder may be sold or otherwise
transferred.

              (f)  PERMITTED TRANSACTIONS. The provisions of this Section 2.1
shall not pertain or apply to:

                   (i)  Any pledge of Securities made by a Shareholder
pursuant to a bona fide loan transaction which creates a mere security
interest;

                  (ii)  Any repurchase of Securities by the Company;

                 (iii)  Any bona fide gift;

                  (iv)  Any transfer to a Shareholder's ancestors,
descendants or spouse or to a trust for their benefit;

                   (v)  Any transfer to a constituent partner, member or
affiliate of a Shareholder or a person or entity controlling, controlled by
or under common control with such Shareholder.

                                      -4-

<PAGE>

PROVIDED, in each case, that (i) the transferring Shareholder(s) shall inform
the Company of such transfer prior to effecting it, and (ii) the transferee
(each a "PERMITTED TRANSFEREE") shall furnish the Company with a written
agreement to be bound by and comply with all provisions of this Agreement
applicable to the Shareholders. Each party hereto hereby consents and agrees
that, upon effectiveness of a transfer to a Permitted Transferee, such
Transferee shall become a party to this Agreement as a "Shareholder."

          2.2 CO-SALE RIGHT. In addition to the rights and obligations
created by Section 2.1 hereof, if a proposed sale by a Shareholder (or group
of affiliated Shareholders) when considered with all other sales by such
Shareholder (or its affiliates) involves the disposition of more than
2,000,000 shares of Company Common Stock (and the Offered Shares are not
being acquired by the Company or the other Shareholders pursuant to Section
2.1 hereof), then each Shareholder who has not elected to exercise its rights
to purchase securities pursuant to Section 2.1 (each such non-purchasing
Shareholder, a "NON-PURCHASING SHAREHOLDER" and collectively, the
"NON-PURCHASING SHAREHOLDERS")  shall have a Co-Sale Right, exercisable upon
written notice to the Company within fifteen (15) business days after the
expiration of the Right of First Offer, to participate in the ROFO Selling
Shareholder's sale of Securities, on such terms and conditions as the ROFO
Selling Shareholder may agree with the purchaser. The Co-Sale Right shall
apply to all Offered Securities (other than those sold to the Company or the
other Shareholders pursuant to Section 2.1), i.e., if the proposed transfer
involves a number of shares which crosses the 2,000,000 shares threshold, the
Co-Sale Right shall apply to all Offered Securities and not just those in
excess of 2,000,000 shares. To the extent any Non-Purchasing
Shareholders exercise such Co-Sale Right in accordance with the terms and
conditions set forth below, the number of Securities which the ROFO Selling
Shareholder may sell shall be correspondingly reduced. The Co-Sale Right of
each Non-Purchasing Shareholder shall be subject to the following terms and
conditions:

              (a)  CALCULATION OF SECURITIES. The ROFO Selling Shareholder
and each Non-Purchasing Shareholder may sell all or any part of that number
of shares of Securities equal to the product obtained by multiplying (A) the
aggregate number of Securities covered by the Offer Notice by (B) a fraction,
the numerator of which is the number of Securities at the time owned by such
ROFO Selling Shareholder or Non-Purchasing Shareholder and the denominator of
which is the total number of Securities at the time owned by the ROFO Selling
Shareholder and all Non-Purchasing Shareholders electing to participate in
such sale.

              (b)  DELIVERY OF CERTIFICATES. Each Non-Purchasing Shareholder
may effect its participation in the sale by delivering to the ROFO Selling
Shareholder for transfer to the prospective purchaser one or more
certificates, properly endorsed for transfer, which represent the Securities
which such Shareholder elects to sell.

              (c)  TRANSFER. The stock certificate or certificates which the
Non-Purchasing Shareholders deliver to the ROFO Selling Shareholder pursuant
to Section 2.2(b) shall be delivered by the ROFO Selling Shareholder to the
prospective purchaser in consummation of the

                                     -5-

<PAGE>

sale, and the ROFO Selling Shareholder shall promptly thereafter remit to
each participating Non-Purchasing Shareholder that portion of the sale
proceeds to which such Non-Purchasing Shareholder is entitled by reason of
its participation in such sale. To the extent that any prospective purchaser
or purchasers prohibits such assignment or otherwise refuses to purchase
Securities from a Shareholder exercising its Co-Sale Right hereunder, the
ROFO Selling Shareholder shall not sell to such prospective purchaser or
purchasers any Securities unless and until, simultaneously with such sale,
the ROFR Selling Shareholder shall purchase such Securities from such
Shareholder for the same consideration and on the same terms and conditions
as the proposed transfer to the third party purchaser.

              (d)  NO ADVERSE EFFECT.  The exercise or non-exercise of the
rights of the Shareholders under this Section 2.2 to participate in one or
more sales of Securities made by any ROFO Selling Shareholder shall not
adversely affect Shareholder's rights to participate in subsequent sales of
Securities by any ROFR Selling Shareholder.

          2.3  TRANSFER RESTRICTIONS.

               (a)  PROHIBITED TRANSFERS.   Any attempt by a Shareholder to
transfer Securities in violation of this Section 2 shall be void and the
Company agrees it will not effect such a transfer nor will it treat any
alleged transferee as the holder of such Securities without the written
consent of the holders of sixty percent (60%) of the Securities then
outstanding.

               (b)  LEGENDED CERTIFICATES.  Each certificate representing the
Securities now or hereafter owned by the SHAREHOLDERS or issued to any
Permitted Transferee pursuant to this Section 2 shall bear the following
legend:

                    "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE
          SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS
          AND CONDITIONS OF A CERTAIN SHAREHOLDERS AGREEMENT BY AND BETWEEN
          THE SHAREHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF COMMON STOCK
          OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON
          WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION."

          3.   ELECTION OF DIRECTORS.

               3.1  BOARD REPRESENTATION.  At each annual meeting of the
Shareholders of the Company, or at any meeting of the Shareholders of the
Company at which members of the Board of Directors are to be elected, or
whenever members of the Board of Directors are to be elected by written
consent, the Shareholders agree to vote or act with respect to their shares so
as to elect:

                                      -6-
<PAGE>

               (a)  one (1) member of the Company's Board of Directors
designated by Coutts & Co. (Jersey) Limited, as trustee of the Ibrahim (1995)
Family Settlement, the Ibrahim (1996) Family Settlement and the Ibrahim
(1997) Family Settlement (the "TRUST DESIGNEE"):

               (b)  one (1) member of the Company's Board of Directors
designated by General Atlantic Partners who shall remain undesignated so long
as the Trust Designee remains undesignated.

               (c)  five (5) members of the Company's Board of Directors
designated by the MSIH Shareholders who shall initially be Dr. Mohamed
Ibrahim, Steve Denning, Dr. Alan Rudge, Sir Gerald Whent and Thomas Butler
(the "MSIH Representatives");

               (d)  four (4) members of the Company's Board of Directors
designated by the Metapath Shareholders who shall initially be John Hansen,
Robert Goodman, George Still and Felda Hardymon (the "Metapath
Representatives");

               (e)  one (1) independent member of the Company's Board of
Directors, who resides in the United States and who possesses software
industry experience, designated by a committee (composed of directors Rudge,
Goodman, Denning and Ibrahim) of the Company's Board of Directors. The
independent director shall initially be John C. Carrington.

          3.2  MECHANICS OF DESIGNATION.  Unless otherwise agreed by the
respective group of Shareholders designated in Sections 3.1 (a), (b), (c) or
(d), the designees of each such group shall be selected by holders of a
majority of the Securities held by all members of such respective group.

          3.3  APPOINTMENT OF DIRECTORS.  In the event of the resignation,
death, removal or disqualification of a director selected by any of the above
groups, the group entitled to designate such directors shall promptly
nominate a new director, and, after written notice of the nomination has been
given to the other parties, each Shareholder shall vote its shares of capital
stock of the Company to elect such nominee to the Board of Directors. With
respect to Sections 3.1(c) and (d), in the event of the resignation, death,
removal or disqualification of an MSIH Representative or Metapath
Representative, respectively, the remaining MSIH Representatives or Metapath
Representatives, as applicable, shall designate the replacement
representative of their respective group, and each Shareholder shall vote all
shares of the Company's capital stock held by them for the election of such
replacement director(s).

          3.4  REMOVAL.  Any of the above groups may remove its designated
director(s) at any time and from time to time, with or without cause (subject
to the Bylaws of the Company as in effect from time to time and any
requirements of law), in their sole discretion, and after written notice to
each of the parties hereto of the new nominee to replace such director. Each
Shareholder shall promptly vote its shares of capital stock of the Company
(i) to remove a director sought to be

                                      -7-
<PAGE>

removed by the group of Shareholders responsible for the original
designation of such director and (ii) to elect the replacement nominee
designated by such group to the Board of Directors.

          3.5    NO REVOCATION.  The voting agreements contained herein are
coupled with an interest and may not be revoked during the term of this
Agreement.

          3.6   CHANGE IN NUMBER OF DIRECTORS. The Shareholders will not vote
for any amendment or change to the Articles of Incorporation or Bylaws
providing for the election of more or less than twelve (12) directors, or any
other amendment or change to the Articles of Incorporation or Bylaws
inconsistent with the terms of this Agreement.

     4. INFORMATION RIGHTS.

          4.1 DELIVERY OF FINANCIAL STATEMENTS. Upon request, the Company
shall deliver to each Shareholder (other than a Shareholder reasonably deemed
by the Company to be a competitor of the Company) all written information
provided to members of the Company's Board of Directors in connection with
meetings of Company's Board of Directors.

          4.2   INSPECTION.  The Company shall permit each Shareholder, at
such Shareholder's expense, to visit and inspect the Company's properties, to
examine its books of account and records and to discuss the Company's
affairs, finances and accounts with its officers, all at such reasonable
times as may be requested by the Shareholder.

          4.3    NONDISCLOSURE AGREEMENT. Notwithstanding the foregoing, the
Company shall not be obligated pursuant to this Section 4 to provide a
Shareholder with any information or allow any Shareholder to visit and inspect
the Company's properties, to examine its books of account and records or to
discuss the Company's affairs, finances and accounts with its officers until
and unless such Shareholder has executed a standard nondisclosure agreement
protecting the confidentiality of the Company's proprietary and confidential
information.

     5.    COVENANT OF SHAREHOLDERS. Each Shareholder covenants and agrees
that it shall not take any action that could reasonably be construed as
having a detrimental effect on the Company's ability to utilize "pooling of
interests" accounting without the prior written consent of the Company.

     6.   TERMINATION.

          6.1 TERMINATION EVENTS. This Agreement shall terminate upon the
earliest to occur of any one of the following events (and shall not apply to
any transfer by a Shareholder in connection with any such event):

               (a)  The liquidation, dissolution or indefinite cessation of
the business operations of the Company;

                                      -8-

<PAGE>

                     (b)  The execution by the Company of a general
assignment for the benefit of creditors or the appointment of a receiver or
trustee to take possession of the property and assets of the Company; or

                     (c)   the consummation of an IPO.

          6.2   TERMINATION WITH RESPECT TO A PARTICULAR SHAREHOLDER. All
rights to which each Shareholder is entitled pursuant to this Agreement (but
not obligations by which such Shareholder is bound) shall terminate with
respect to such Shareholder at such time as such Shareholder together, with
such Shareholder's affiliates, no longer owns at least (i) 400,000 shares of
the Company's Common Stock (as adjusted for any stock split or the like) or
(ii) one half of the shares of the Company Common Stock held by a Shareholder
as of the date hereof.

          6.3  REMOVAL OF LEGEND. At any time after the termination of this
Agreement in accordance with Section 6.1, any holder of a stock certificate
legended pursuant to Section 2.3 may surrender such certificate to the
Company for removal of such legend, and the Company will duly reissue a new
certificate without the legend.

     7.  MISCELLANEOUS.

          7.1   SUCCESSORS AND ASSIGNS.   Except as otherwise provided
herein, this Agreement and the rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding upon, the parties'
respective successors, assigns and legal representatives.

          7.2   AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the Company and
Shareholders (or their respective successors and assigns) holding at least
sixty percent (60%) of the Securities. Any amendment or waiver effected in
accordance with this Section 7.2 shall be binding upon the Company and the
Shareholders, and each of their respective successors and assigns.

          7.3    NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient on the date of delivery,
when delivered personally or by overnight courier or sent by telegram or fax,
or forty-eight (48) hours after being deposited in the U.S mail or UK mail,
with postage prepaid, and addressed to the party to be notified at such
party's address or fax number as set forth below on the signature page
hereto, or as subsequently modified by written notice.

          7.4    SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement,
(b) the balance of the

                                 -9-

<PAGE>

Agreement shall be interpreted as if such provision were so excluded and (c)
the balance of the Agreement shall be enforceable in accordance with its
terms.

          7.5  GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          7.6  COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

          7.7  TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement

          7.8   PARTNERS, MEMBERS AND AFFILIATES. For purposes of Sections 1
and 2 of this Agreement, a Shareholder includes any general partners and
affiliates of a Shareholder. A Shareholder who chooses to exercise a Right of
First Offer, Right of First Refusal or Co-Sale Right may designate under such
right itself or its partners or affiliates in such proportions as it deems
appropriate.

                          [Signature pages follow]

                                      -10-
<PAGE>

The parties have executed this Agreement as of the date written above.

                                         COMPANY:

                                         METAPATH SOFTWARE
                                         INTERNATIONAL, INC.

                                         By:
                                            -------------------------

                                         Name:
                                              -----------------------

                                         Title:
                                               ----------------------

                                         Address:
                                                 --------------------

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

                                         Fax Number:
                                                    -----------------

                                         SHAREHOLDER:

                                         ---------------------------
                                         Print Shareholder Name

                                         By:
                                            ------------------------

                                         Name:
                                              ----------------------

                                         Title:
                                               ---------------------

                                         Address:
                                                 -------------------

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

                                        Fax Number:
                                                   -----------------

                [SIGNATURE PAGE FOR SHAREHOLDERS AGREEMENT]

<PAGE>

                                   EXHBIT A

              Metapath Shareholders signing Shareholders Agreement

Networks Northwest, Inc.
Norwest Venture Capital
Lehman Brothers Venture Capital Partners I, L.P.
RRE Investors, L.P.
RRE Investor Funds, L.P.
Nisho Iwai American Corporation
Nisho Awai Corporation
Crossover Fund II, L.P.
Crossover Fund IIA, L.P.
Omega Ventures II, L.P.
TCV II, L.P.
TCV II, V.O.F.
TCV II (Q), L.P.
TCV II Strategic Partners, L.P.
TCV II C.V.
U.S. Venture Partners IV, L.P.
Second Ventures II, L.P.
USVP Entrepreneur Partners II, L.P.
2180 Associates Fund
Belisarius Corp. (Robert D. Lindsay)
Bessemer Venture Partners III, L.P.
BVP III Special Situations L.P.
G. Felda Hardymon
Michael Tennican

<PAGE>

                                  EXHIBIT B

               MSIH Shareholders signing Shareholders Agreement

Bessec Ventures IV L.P.
Bessemer Venture Investors L.P.
Bessemer Venture Partners IV L.P.
Peter Carpenter
GAP Coinvestment Partners, L.P.
General Atlantic Partners 30, L.P.
General Atlantic Partners 46, L.P.
Ibrahim (1995) Family Settlement
Ibrahim (1996) Family Settlement
Ibrahim (1997) Settlement
Hadeel Ibrahim
Hosham Ibrahim
Mohamed Ibrahim
Mario Palencia
Mario Palencia 1997 Settlement
M. Palencia 1st Family Settlement
M. Palencia 2nd Family Settlement
Moez Daya
The Nuru Settlement
The Rajab Settlement
Andrew Warden
Paul Young

<PAGE>

                    METAPATH SOFTWARE INTERNATIONAL,INC.

                            AMENDMENT NO. 1 TO

                          SHAREHOLDERS AGREEMENT

<PAGE>

                       METAPATH SOFTWARE INTERNATIONAL, INC.
                                 AMENDMENT NO. 1 TO
                              SHAREHOLDERS AGREEMENT

    This Amendment No.1 to Shareholders Agreement (the "AMENDMENT") is made
and entered into as of December 4, 1998 by and among Metapath Software
International, Inc., a California corporation (the "COMPANY"), and the
shareholders of the Company listed on Exhibit A hereto(the "SHAREHOLDERS").

                                      RECITALS

    A. The Company and the Shareholders are parties to that certain
Shareholders Agreement dated November 30, 1998 (the"SHAREHOLDERS
AGREEMENT"); and

    B. The Company and the Shareholders desire to amend the Shareholders
Agreement as provided herein.

                                     AGREEMENT

    The parties agree as follows:

         1.   AMENDMENT. Section 2.1(f) of the Shareholders Agreement is hereby
amended and restated to read in its entirety as follows:

              (f)  PERMITTED TRANSACTIONS. The provisions of this Section 2.1
         shall not pertain or apply to:

                   (i)   Any pledge of Securities made by a Shareholder pursuant
         to a bona fide loan transaction which creates a mere security interest:

                   (ii)  Any repurchase of Securities by the Company;

                  (iii)  Any bona fide gift;

                   (iv)  Any transfer to a Shareholder's ancestors, descendants
          or spouse or to a trust for their benefit;

                    (v) Any transfer to a constituent partner, shareholder,
          member or affiliate of a Shareholder or a person or entity
          controlling, controlled by or under common control with such
          Shareholder.
<PAGE>

                   (vi) Any transfer of Securities pursuant to that certain
Option Agreement by and among (1) Dr. Mohamed Ibrahim and others, and (2)
General Atlantic Partners 30, L.P. and CAP Coinvestment Partners, L.P.

PROVIDED, in each case, that (i) the transferring Shareholder(s) shall inform
the Company of such transfer prior to effecting it and (ii) the transferee
(each a "PERMITTED TRANSFEREE") shall furnish the Company with a written
agreement to be bound by and comply with all provisions of this Agreement
applicable to the Shareholders. Each party hereto hereby consents and aggrees
that, upon effectiveness of a transfer to a Permitted Transferee, such
Transferee shall become a party to this Agreement as a "Shareholder".

    2.   MISCELLANEOUS.

         2.1 NO OTHER AMENDMENTS. Except as expressly provided in this
Amendment, all of the terms of the Shareholders Agreement remain in full force
and effect.

         2.2 EFFECTIVENESS OF AMENDMENT. This Amendment shall be effective
upon exection hereof by the Company and Shareholders holding at least sixty
percent (60%) of the Securities.

         2.3 COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall consitute one and the same instrument.

         2.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                     [Signature pages follow]

                                     -2-
<PAGE>
The parties have executed this Amendment as of the date first written above.

                                                 COMPANY:

                                                 METAPATH SOFTWARE
                                                 INTERNATIONAL,INC.

                                                 By:
                                                    ----------------------

                                                 Name:
                                                     ---------------------

                                                 Title:
                                                      --------------------

                                                 Address:
                                                         -----------------

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

                                                 Fax Number:
                                                           ---------------

                                                 SHAREHOLDER:

                                                 -----------------------
                                                 Print Shareholder Name

                                                 By:
                                                    ------------------------

                                                 Name:
                                                      ----------------------

                                                 Title:
                                                       ---------------------

                                                 Address:
                                                        --------------------

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

                                                 Fax Number:
                                                            ----------------

            (SIGNATURE PAGE FOR AMENDMENT NO.1 TO SHAREHOLDERS AGREEMENT)

<PAGE>
                                                          Exhibit A
                                                          ---------
                                                   Schedule of Shareholders

Networks Northwest Inc.                        M.Palencia 1st Family Settlement
Norwest Venture Capital                        M.Palencia 2nd Family Settlement
Lehman Brothers Venture                        Moez Daya
Capital Partners I,L.P.                        The Nuru Settlement
RRE Investors L.P.                             The Rajab Settlement
RRE Investor Funds, L.P.                       Andrew Warden
Nisho Iwai Amercian Corporation                Paul Young
Nisho Awai Corporation
Crossover Fund II,L.P.
Crossover Fund IIA,L.P.
Omega Ventures II,L.P.
Omega Ventures II Cayman ,L.P.
TCV II,L.P.
TCV II,V.O.F
TCV II(Q),L.P.
TCV II Strategic Partners,L.P.
TCV II C.V.
U.S.Venture Partners IV,L.P.
Second Ventures II,L.P.
USVP Entrepreneur Partners II,L.P.
2180 Associates Fund
Belisarius Corp.(Robert D.Lindsay)
Bessemer Venture Partners III,L.P.
BVP III Special Situtations L.P.
G. Felda Hardymon
Michael Tennican
Bessec Ventures IV L.P.
Bessemer Venture Investors L.P.
Bessemer Venture Partners IV L.P.
Peter Carpenter
GAP Coinvestment Partners,L.P.
General Atlantic Partners 30,L.P.
General Atlantic Partners 46,L.P.
Ibrahim (1995) Family Settlement
Ibrahim (1996) Family Settlement
Ibrahim (1997) Settlement
Hadeel Ibrahim
Hosham Ibrahim
Mohamed Ibrahim
Mario Palencia
Mario Palencia 1997 Settlement

<PAGE>

               METAPATH SOFTWARE INTERNATIONAL,INC.

                       AMENDMENT NO. 2 TO

                     SHAREHOLDERS AGREEMENT

<PAGE>

                      METAPATH SOFTWARE INTERNATIONAL, INC.

                                AMENDMENT NO. 2 TO

                             SHAREHOLDERS AGREEMENT

     This Amendment No 2. to Shareholders Agreement (the "AMENDMENT") is made
and entered into as of July ___, 1999 by and among Metapath Software
International, Inc., a California corporation (the "COMPANY"), and the
shareholders of the Company listed on Exhibit A hereto (the "SHAREHOLDERS").

                                    RECITALS
                                    --------

     A. The Company and the Shareholders are parties to that certain
Shareholders Agreement dated November 30, 1998 and as amended by Amendment No.1
thereto dated December 4, 1998 (the agreement, as amended, is referred to as the
"SHAREHOLDERS AGREEMENT"); and

     B. Networks Northwest, Inc. ("NNI"), one of the Shareholders, desires to
transfer the shares held of record by it (the "NNI Shares") to its constituent
owners (the "NNI Shareholders"); and

     C. In connection with the transfer from NNI to the NNI Shareholders, the
parties hereto desire to release NNI and NNI Shareholders of the obligations set
forth in the Shareholders Agreement, and such shareholders are willing to
relinquish their rights therein;

                                    AGREEMENT
                                    ---------

     The parties agree as follows:

     1. RELEASE OF NNI. Effective upon completion of the transfer from NNI to
the NNI Shareholders, NNI shall be removed as a party to the Shareholders
Agreement. The NNI Shareholders shall not become parties to the Shareholders
Agreement. Notwithstanding the foregoing, to the extent that any NNI
Shareholder was a party to the Shareholders Agreement independent of their
receipt of shares from NNI, then each such party shall remain a party to the
Shareholders Agreement, and the NNI Shares recieved by any such shareholder
shall be deemed to be "Securities" held by a Shareholder under the Shareholders
Agreement.

     2. CONSENT TO TRANSFER AND RELEASE. Each Shareholder hereby consents to
the transfer by NNI to the NNI Shareholders, and hereby waives such
Shareholder's right of first offer with respect to such transfer. Each
Shareholder further agrees to release each NNI Shareholder and the NNI Shares
from any further obligations under the Shareholders Agreement.

     3. NNI ACKNOWLEDGEMENT. NNI hereby acknowledges and agrees that upon
transfer of the NNI Shares to the NNI Shareholders, the rights and obligations
of NNI under the Shareholders

<PAGE>

Agreement will be terminated, and further acknowledges that the NNI Shareholders
will have none of the rights (nor any of the obligations) of a Shareholder under
the Shareholders Agreement.

     4. MISCELLANEOUS

        4.1 WAIVER OF NOTICE. Each Shareholder hereby waives any notice that
may be required under the Shareholders Agreement with respect to the
solicitation of consent to this Amendment and the transactions contemplated
hereby, including without limitation notice of NNI's intention to transfer
the NNI Shares.

        4.2   NO OTHER AMENDMENTS. Except as expressly provided in Amendment
No. 1 and in this Amendment, all of the terms of the Shareholders Agreement
remain in full force and effect.

        4.3 EFFECTIVENESS OF AMENDMENT. This Amendment shall be effective upon
execution hereof by the Company, NNI and Shareholders holding at least sixty
percent (60%) of the Securities.

        4.4 COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

        4.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                            [SIGNATURE PAGES FOLLOW]

                                      -2-

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