Document:

Exhibit 4.3

                           Revised Extension Agreement

      Reference is made to that certain (i) Registration Rights Agreement (the
"M.A.G. Registration Rights Agreement") dated July 21, 2005 between Futuremedia
PLC (the "Company") and Mercator Momentum Fund, LP ("MMF"), Mercator Momentum
Fund III, L.P. ("MMFIII"), Monarch Pointe Fund, Ltd. ("MPF") (collectively, the
"Funds") and M.A.G. Capital, LLC ("M.A.G.") (the Funds and M.A.G. are referred
to individually as a "Holder" and collectively as the "Holders") relating to the
Securities Purchase Agreement ("the M.A.G. Securities Purchase Agreement") dated
July 21, 2005 between the Company and the Holders; (ii) Convertible Debenture
due October 31, 2006 and dated July 21, 2005 issued by the Company to MMF (the
"MMF Convertible Debenture") relating to the M.A.G. Securities Purchase
Agreement; (iii) Convertible Debenture due October 31, 2006 and dated July 21,
2005 issued by the Company to MMFIII (the "MMFIII Convertible Debenture")
relating to the M.A.G. Securities Purchase Agreement; (iv) Convertible Debenture
due October 31, 2006 and dated July 21, 2005 issued by the Company to MPF (the
"MPF Convertible Debenture") relating to the M.A.G. Securities Purchase
Agreement (the MMF Convertible Debenture, the MMFIII Convertible Debenture and
the MPF Convertible Debenture are referred to collectively as the "Convertible
Debentures"); and (v) Extension Agreement dated September 2, 2005 by and among
the Company, the Funds and M.A.G. (the "Original Extension Agreement") .

      WHEREAS, it is the intent of the Company and the Holders that this
Agreement supersedes and replaces the Original Extension Agreement in its
entirety; and

      WHEREAS, pursuant to the M.A.G. Registration Rights Agreement and each of
the Convertible Debentures, the Company will file a registration statement by
September 5, 2005 (e.g. 45 days after the date of the M.A.G. Registration Rights
Agreement and each of the Convertible Debentures) with the Securities and
Exchange Commission ("SEC") in order to register the resale of securities
purchased under the M.A.G. Securities Purchase Agreement; and

      WHERAS, the Company's registration statement will disclose financial
numbers as at July 31, 2005, which would allow a reader to determine the
Company's fiscal First Quarter 2006 earnings performance; and

      WHEREAS, the Company will not release its fiscal First Quarter 2006
financial results until September 7, 2005; and

      WHEREAS, the Company desires the Holders to agree to extend the time by
which the Company must file a registration statement with the SEC from September
5, 2005 (e.g. 45 days after the date of the M.A.G. Registration Rights Agreement
and each of the Convertible Debentures) until September 9, 2005 (e.g. 49 days
after the date of the M.A.G. Registration Rights Agreement and each of the
Convertible Debentures), in order to permit the Company to release its fiscal
First Quarter 2006 earnings performance prior to filing the registration
statement.

      NOW, THEREFORE, for good and valuable consideration received, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Holders
agree that:

1. This Agreement supersedes and replaces the Original Extension Agreement in
its entirety and the Original Extension Agreement is of no further force or
effect.

2. For purposes of the M.A.G. Registration Rights Agreement, the term of
"forty-five (45) days" after the date of the M.A.G. Registration Rights
Agreement, by which the Company shall file a registration statement with the SEC
in order to register the resale of the securities purchased under the M.A.G.
Securities Purchase Agreement, as the same appears in Section 2(a) of the M.A.G.
Registration Rights Agreement, shall be amended to read "forty-nine (49) days".

3. In all other respects, the M.A.G. Registration Rights Agreement is unamended
and in full force and effect and is hereby ratified and confirmed in every
respect.

4. For purposes of each of the Convertible Debentures, the term of "45 days"
after the date of each of the Convertible Debentures, by which the Company shall
file a registration statement with the SEC in order to register the resale of

<PAGE>

securities purchased under the M.A.G. Securities Purchase Agreement or be deemed
an Event of Default (as defined in each of the Convertible Debentures), as the
same appears in Section 3(a)(ii) of each of the Convertible Debentures, shall be
amended in each of the Convertible Debentures to read "49 days".

5. In all other respects, each of the Convertible Debentures is unamended and in
full force and effect and is hereby ratified and confirmed in every respect.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

      EXECUTED as of this 7th day of September, 2005.

                                     FUTUREMEDIA PLC

                                     By: /s/ Leonard M. Fertig
                                         ----------------------------
                                     Name: Leonard M. Fertig
                                     Its:  Chief Executive Officer

                                     HOLDERS:

                                     MERCATOR MOMENTUM FUND, L.P.

                                     By:  M.A.G. CAPITAL, LLC
                                     Its: General Partner

                                     By: /s/ H. Harry Aharonian
                                         ----------------------------
                                     Name: H. Harry Aharonian
                                     Its:  Portfolio Manager

                                     MERCATOR MOMENTUM FUND III, L.P.

                                     By: M.A.G. CAPITAL, LLC
                                     Its: General Partner

                                     By: /s/ H. Harry Aharonian
                                         ----------------------------
                                     Name: H. Harry Aharonian
                                     Its:  Portfolio Manager

                                     MONARCH POINTE FUND, LTD.

                                     By: /s/ H. Harry Aharonian
                                         ----------------------------
                                     Name: H. Harry Aharonian
                                     Its:  Portfolio Manager

                                     M.A.G. CAPITAL, LLC

                                     By: /s/ H. Harry Aharonian
                                         ----------------------------
                                     Name: H. Harry Aharonian
                                     Its:  Portfolio Manager/Corp. SecretaryEXHIBIT
      10.35
       

      [Pursuant
        to Item 601(b)(2) of Regulation S-K, the exhibits and schedules to this
        agreement have been omitted. Axeda Systems Inc. agrees to supplementally
        furnish
        such exhibits and
        schedules upon request from the Securities and Exchange
        Commission.]

       

      

       

      ASSET
        PURCHASE AGREEMENT

       

      dated
        as of

       

      September
        1, 2005

       

      among

       

      ASOC
        Acquisition Corp.,

       

      Axeda
        Systems Inc.,

       

      Axeda
        Systems Operating Company, Inc.,

       

      and

       

      Axeda
        IP, Inc.

       

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
        OF CONTENTS

      
        
          	 	 
	 	
                  Page

                
	 	 
	
                  ARTICLE
                    I DEFINITIONS

                	
                  1

                
	
                  1.01.

                	
                  Definitions

                	
                  1

                
	 	 
	
                  ARTICLE
                    II PURCHASE AND SALE

                	
                  7

                
	
                  2.01.

                	
                  Purchase
                    and Sale

                	
                  7

                
	
                  2.02.

                	
                  Excluded
                    Assets

                	
                  9

                
	
                  2.03.

                	
                  Assumption
                    of Liabilities

                	
                  10

                
	
                  2.04.

                	
                  Excluded
                    Liabilities

                	
                  10

                
	
                  2.05.

                	
                  Assignment
                    of Contracts and Rights

                	
                  12

                
	
                  2.06.

                	
                  Purchase
                    Price; Closing

                	
                  12

                
	
                  2.07.

                	
                  Allocation
                    of Purchase Price

                	
                  13

                
	
                  2.08.

                	
                  Signing
                    Deliverables

                	
                  14

                
	
                  2.09.

                	
                  Sales
                    Tax Escrow

                	
                  14

                
	 	 
	
                  ARTICLE
                    III REPRESENTATIONS AND WARRANTIES OF SELLERS

                	
                  14

                
	
                  3.01.

                	
                  Corporate
                    Existence and Power; Subsidiaries

                	
                  15

                
	
                  3.02.

                	
                  Corporate
                    Authorization

                	
                  15

                
	
                  3.03.

                	
                  Governmental
                    Authorization; Consents

                	
                  16

                
	
                  3.04.

                	
                  Non
                    Contravention

                	
                  16

                
	
                  3.05.

                	
                  SEC
                    Reports; Financial Statements

                	
                  17

                
	
                  3.06.

                	
                  Absence
                    of Certain Changes

                	
                  18

                
	
                  3.07.

                	
                  Personal
                    Property

                	
                  20

                
	
                  3.08.

                	
                  Real
                    Property

                	
                  20

                
	
                  3.09.

                	
                  Affiliate
                    Transfers; Sufficiency of Purchased Assets.

                	
                  21

                
	
                  3.10.

                	
                  Title
                    to Purchased Assets

                	
                  21

                
	
                  3.11.

                	
                  Indebtedness;
                    No Undisclosed Liabilities

                	
                  22

                
	
                  3.12.

                	
                  Litigation;
                    Proceedings

                	
                  22

                
	
                  3.13.

                	
                  Material
                    Contracts

                	
                  22

                
	
                  3.14.

                	
                  Technology
                    and Intellectual Property.

                	
                  24

                
	
                  3.15.

                	
                  Insurance
                    Coverage

                	
                  28

                
	
                  3.16.

                	
                  Compliance
                    with Laws.

                	
                  28

                
	
                  3.17.

                	
                  Employees.

                	
                  28

                
	
                  3.18.

                	
                  Environmental
                    Compliance.

                	
                  30

                
	
                  3.19.

                	
                  Customers
                    and Suppliers

                	
                  31

                
	
                  3.20.

                	
                  Products

                	
                  32

                
	
                  3.21.

                	
                  Accounts
                    Receivable

                	
                  32

                
	
                  3.22.

                	
                  Inventories

                	
                  32

                
	
                  3.23.

                	
                  Transactions
                    with Affiliates; Intercompany Arrangements

                	
                  32

                
	
                  3.24.

                	
                  Finders’
                    Fees

                	
                  33

                
	
                  3.25.

                	
                  No
                    Equity Participation Obligations

                	
                  33

                
	
                  3.26.

                	
                  Other
                    Information

                	
                  33

                

           

          
            
               

            

            
              -i-

              
                

              

            

            
               

            

          

           

          
            	 	 
	
                    ARTICLE
                      IV REPRESENTATIONS AND WARRANTIES OF BUYER

                  	
                    33

                  
	
                    4.01.

                  	
                    Organization
                      and Existence

                  	
                    33

                  
	
                    4.02.

                  	
                    Corporate
                      Authorization

                  	
                    33

                  
	
                    4.03.

                  	
                    Governmental
                      Authorization

                  	
                    34

                  
	
                    4.04.

                  	
                    Non
                      Contravention

                  	
                    34

                  
	
                    4.05.

                  	
                    Litigation

                  	
                    34

                  
	
                    4.06.

                  	
                    Finders’
                      Fees

                  	
                    34

                  
	 	 
	
                    ARTICLE
                      V COVENANTS OF SELLERS

                  	
                    34

                  
	
                    5.01.

                  	
                    Conduct
                      of the Business

                  	
                    34

                  
	
                    5.02.

                  	
                    Access
                      to Information

                  	
                    38

                  
	
                    5.03.

                  	
                    Monthly
                      Financials; Notices of Events; Continuing Disclosure.

                  	
                    38

                  
	
                    5.04.

                  	
                    No
                      Solicitation.

                  	
                    39

                  
	
                    5.05.

                  	
                    Preparation
                      of the Proxy Statement; Meeting of Stockholders.

                  	
                    40

                  
	
                    5.06.

                  	
                    Confidentiality

                  	
                    41

                  
	
                    5.07.

                  	
                    Change
                      and Use of Names

                  	
                    42

                  
	
                    5.08.

                  	
                    Transitional
                      Assistance

                  	
                    42

                  
	
                    5.09.

                  	
                    Payments
                      with Respect to Purchased Assets

                  	
                    42

                  
	
                    5.10.

                  	
                    [Intentionally
                      Omitted].

                  	
                    42

                  
	
                    5.11.

                  	
                    Questra
                      Litigation

                  	
                    42

                  
	
                    5.12.

                  	
                    State
                      Tax Clearance

                  	
                    43

                  
	
                    5.13.

                  	
                    Intercompany
                      Transfers of Purchased Assets

                  	
                    43

                  
	
                    5.14.

                  	
                    Use
                      of Proceeds

                  	
                    43

                  
	
                    5.15.

                  	
                    Office
                      Lease

                  	
                    43

                  
	
                    5.16.

                  	
                    Compliance

                  	
                    43

                  
	 	 
	
                    ARTICLE
                      VI COVENANT NOT TO COMPETE

                  	
                    43

                  
	
                    6.01.

                  	
                    Noncompetition;
                      Nonsolicitation.

                  	
                    43

                  
	
                    6.02.

                  	
                    No
                      Solicitation of Supervisor Employees

                  	
                    44

                  
	 	 
	
                    ARTICLE
                      VII COVENANTS OF BOTH PARTIES

                  	
                    45

                  
	
                    7.01.

                  	
                    Best
                      Efforts to Consummate Transactions

                  	
                    45

                  
	
                    7.02.

                  	
                    Certain
                      Filings; Consents

                  	
                    45

                  
	
                    7.03.

                  	
                    Public
                      Announcements

                  	
                    45

                  
	
                    7.04.

                  	
                    Further
                      Assurances.

                  	
                    45

                  
	 	 
	
                    ARTICLE
                      VIII TAX MATTERS

                  	
                    46

                  
	
                    8.01.

                  	
                    Tax
                      Definitions

                  	
                    46

                  
	
                    8.02.

                  	
                    Tax
                      Matters

                  	
                    46

                  
	
                    8.03.

                  	
                    Tax
                      Cooperation; Allocation of Taxes.

                  	
                    48

                  
	 	 
	
                    ARTICLE
                      IX EMPLOYEE BENEFITS

                  	
                    49

                  
	
                    9.01.

                  	
                    Employee
                      Benefits Definitions

                  	
                    49

                  
	
                    9.02.

                  	
                    ERISA
                      Representations

                  	
                    50

                  
	
                    9.03.

                  	
                    Employees
                      and Offers of Employment.

                  	
                    51

                  
	
                    9.04.

                  	
                    No
                      Third Party Beneficiaries

                  	
                    52

                  

             

            
              
                 

              

              
                -ii-

                
                  

                

              

              
                 

              

            

             

            
              	 	 
	
                      ARTICLE
                        X CONDITIONS TO CLOSING

                    	
                      52

                    
	
                      10.01.

                    	
                      Conditions
                        to the Obligations of Each Party

                    	
                      52

                    
	
                      10.02.

                    	
                      Conditions
                        to the Obligations of Buyer

                    	
                      53

                    
	
                      10.03.

                    	
                      Conditions
                        to Obligations of Sellers

                    	
                      54

                    
	 	 
	
                      ARTICLE
                        XI SURVIVAL; INDEMNIFICATION

                    	
                      55

                    
	
                      11.01.

                    	
                      Survival

                    	
                      55

                    
	
                      11.02.

                    	
                      Indemnification.

                    	
                      55

                    
	
                      11.03.

                    	
                      Limitations

                    	
                      57

                    
	
                      11.04.

                    	
                      Procedures.

                    	
                      57

                    
	
                      11.05.

                    	
                      No
                        Waiver

                    	
                      58

                    
	
                      11.06.

                    	
                      Purchase
                        Price Adjustment

                    	
                      59

                    
	
                      11.07.

                    	
                      Exclusive
                        Remedies

                    	
                      59

                    
	 	 
	
                      ARTICLE
                        XII TERMINATION

                    	
                      59

                    
	
                      12.01.

                    	
                      Grounds
                        for Termination

                    	
                      59

                    
	
                      12.02.

                    	
                      Effect
                        of Termination.

                    	
                      60

                    
	 	 
	
                      ARTICLE
                        XIII MISCELLANEOUS

                    	
                      61

                    
	
                      13.01.

                    	
                      Notices

                    	
                      61

                    
	
                      13.02.

                    	
                      Amendments;
                        No Waivers.

                    	
                      62

                    
	
                      13.03.

                    	
                      Expenses

                    	
                      62

                    
	
                      13.04.

                    	
                      Successors
                        and Assigns

                    	
                      62

                    
	
                      13.05.

                    	
                      Governing
                        Law

                    	
                      62

                    
	
                      13.06.

                    	
                      Counterparts;
                        Effectiveness

                    	
                      62

                    
	
                      13.07.

                    	
                      Entire
                        Agreement

                    	
                      63

                    
	
                      13.08.

                    	
                      Bulk
                        Sales Laws

                    	
                      63

                    
	
                      13.09.

                    	
                      Captions

                    	
                      63

                    
	
                      13.10.

                    	
                      Jurisdiction

                    	
                      63

                    
	
                      13.11.

                    	
                      Waiver
                        of Jury Trial

                    	
                      63

                    
	
                      13.12.

                    	
                      Specific
                        Performance

                    	
                      63

                    
	
                      13.13.

                    	
                      Severability

                    	
                      64

                    
	
                      13.14.

                    	
                      Construction

                    	
                      64

                    
	 	 	 

            

          
Exhibits

      

       

      Exhibit A
        - Transition Services Agreement

      Exhibit B
        - Form of Voting Agreement

      Exhibit
        C
        - Form of Legal Opinion 

       

       

      
        
           

        

        
          -iii-

          
            

          

        

        
           

          
          

        

      

      ASSET
        PURCHASE AGREEMENT

       

      This
        Asset Purchase Agreement dated as of September 1, 2005 by and among ASOC
        Acquisition Corp., a Delaware corporation (“Buyer”),
        Axeda
        Systems Inc., a Delaware corporation (“Parent”),
        Axeda
        Systems Operating Company, Inc., a Massachusetts corporation (“ASOC”),
        and
        Axeda IP, Inc., a Nevada corporation (“AIP”)
        (Parent, ASOC and AIP, collectively “Sellers”
        and
        each a “Seller”):

       

      RECITALS:

       

      WHEREAS,
        Sellers develop, market and sell software products and services used by many
        industries and customers worldwide for device relationship management computer
        software and applications, or DRM, to access and exploit information located
        within remote machines, devices and facilities (the “DRM
        Business”);
        and

       

      WHEREAS,
        a portion of the DRM Business consists of the assets owned and employed by
        Sellers and their Affiliates in connection with the manufacture, distribution
        and sale of the industrial automation products marketed as Sellers’“Supervisor”
        product family (the “Supervisor
        Business”);
        and

       

      WHEREAS,
        Buyer desires to purchase substantially all of the assets of the DRM Business
        other than those assets of Sellers and their Affiliates used exclusively
        in the
        operation of the Supervisor Business (the “Business”),
        and
        Sellers desire to sell substantially all of the assets of the Business to
        Buyer,
        upon the terms and subject to the conditions hereinafter set forth.

       

      NOW,
        THEREFORE, in consideration of the foregoing and the representations,
        warranties, covenants and agreements herein contained, the parties hereto
        agree
        as follows:

       

      ARTICLE
        I

       

      DEFINITIONS

       

      1.01.  Definitions.

       

      (a)  The
        following terms, as used herein, have the following meanings:

       

      “Accounts
        Receivable” shall
        mean: (a) all trade accounts receivable and other rights to payment from
        customers of the Business and the full benefit of all security for such accounts
        or rights to payment, including all trade accounts receivable representing
        amounts receivable in respect of goods shipped or products sold or services
        rendered to customers of the Business; (b) all other accounts or notes
        receivable of the Business and the full benefit of all security for such
        accounts or notes; and (c) any claim, remedy or other right related to any
        of
        the foregoing.

       

      “Affiliate”
        means
        with respect to any particular Person, any other Person controlling, controlled
        by or under common control with such particular Person, where “control” means
        the possession, directly or indirectly, of the power to direct the management
        and policies of a Person whether through the ownership of voting securities
        or
        otherwise. With respect to Sellers only, “Affiliate”
        shall
        include all direct and indirect Subsidiaries of Parent or another
        Seller.

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      “Ancillary
        Agreements”
        means
        the Bridge Loan Documents, the Voting Agreements, the Transition Services
        Agreement and the other agreements and instruments entered into or to be
        entered
        into in connection with this Agreement and the transactions contemplated
        by this
        Agreement. 

       

      “Balance
        Sheet Date”
        means
        May 31, 2005.

       

      “Bridge
        Loan Documents”
        means
        the Senior Secured Bridge Note Purchase Agreement, dated as of July 8, 2005
        and
        as amended from time to time thereafter, by and among Parent, ASOC, AIP and
        JMI,
        the Senior Subordinated Secured Bridge Note Purchase Agreement, dated as
        of the
        date hereof (as may be amended from time to time hereafter) by and among
        Parent,
        ASOC, AIP and JMI (collectively, the “Bridge
        Note Purchase Agreements”)
        and
        any and all Notes, the Guaranty, the Security Agreement, the Subordination
        Agreement or the Letter of Intent (each as defined in the Bridge Note Purchase
        Agreements).

       

      “Bridge
        Loans”
        means
        indebtedness for borrowed money of the Parent payable to JMI pursuant to
        those
        certain Bridge Note Purchase Agreements. 

       

      “Business
        Balance Sheet”
        means
        the unaudited, disaggregated balance sheets of Sellers reflecting the assets
        and
        liabilities of the Business as of May 31, 2005 and attached as Exhibit A
        to the
        Letter of Intent (as such term is defined in the Bridge Note Purchase
        Agreements).

       

      “Closing
        Date”
        means
        the date of the Closing.

       

      “Indebtedness”
        means
        (i) any indebtedness for borrowed money or issued in substitution for or
        exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced
        by
        any note, bond, debenture or other debt security, (iii) any indebtedness
        for the
        deferred purchase price of property or services with respect to which a Person
        is liable, contingently or otherwise, as obligor or otherwise, (iv) any
        commitment by which a Person assures a creditor against loss (including,
        without
        limitation, contingent reimbursement Liability with respect to letters of
        credit), (v) any indebtedness guaranteed in any manner by a Person
        (including, without limitation, guarantees in the form of an agreement to
        repurchase or reimburse), (vi) any Liabilities under leases recorded for
        accounting purposes by the applicable Person as capitalized leases with respect
        to which a Person is liable, contingently or otherwise, as obligor, guarantor
        or
        otherwise, (vii) any indebtedness secured by a Lien on a Person’s assets, (viii)
        any unsatisfied obligation for “withdrawal liability” to a “multiemployer plan”
        as such terms are defined under ERISA, (ix) any amounts owed to any Person
        under
        any noncompetition, severance or similar arrangements, (x) any change-of-control
        or similar payment or increased cost which is triggered in whole or in part
        by
        the transactions contemplated by this Agreement, (xi) any Liability of a
        Person
        under deferred compensation plans, phantom stock plans, severance or bonus
        plans, or similar arrangements made payable in whole or in part as a result
        of
        the transactions contemplated herein (but excluding any amounts owed for
        employees’ accrued vacation time), (xii) any off-balance sheet financing of a
        Person (but excluding all leases recorded for accounting purposes by the
        applicable Person as operating leases), (xiii) any accrued and unpaid interest
        on, and any prepayment premiums, penalties or similar contractual charges
        in
        respect of, any of the foregoing obligations computed as though payment is
        being
        made in respect thereof on the Closing Date and (xiv) any Liabilities
        incurred by a Person in connection with the negotiation of the Letter of
        Intent,
        this Agreement, the Ancillary Agreements, the performance of a Person’s and its
        Affiliates’ obligations hereunder and thereunder, and the consummation of the
        transactions contemplated hereby and thereby.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      “Intellectual
        Property”
        means
        all tangible or intangible proprietary information and materials,
        including:

       

      (a) (i)
        all
        inventions (whether patentable or unpatentable and whether or not reduced
        to
        practice), all improvements thereon, and all patents, patent applications
        and
        patent disclosures, together with all reissuances, continuations,
        continuations-in-part, divisions, revisions, extensions and re-examinations
        thereof, (ii) all trademarks, services marks, trade dress, logos,
        trade
        names, domain names, and corporate names, together with all translations,
        adaptations, derivations and combinations thereof and including all goodwill
        associated therewith, and all applications, registrations and renewals in
        connection therewith, (iii) all copyrights and all applications,
        registrations and renewals in connection therewith, (iv) all mask
        works and
        all applications, registrations and renewals in connection therewith,
        (v) all trade secrets and confidential business information (including
        ideas, research and development, know-how, formulas, compositions, manufacturing
        and production process and techniques, methods, schematics, technology,
        technical data, designs, drawings, flowcharts, block diagrams, specifications,
        customer and supplier lists, pricing and cost information and business and
        marketing plans and proposals), and (vi) all software and firmware
        (including data, databases and related documentation); and

       

      (b) all
        documents, records and files relating to design, end user documentation,
        manufacturing, quality control, sales, marketing or customer support for,
        and
        tangible embodiments of, all intellectual property described
        herein.

       

      “JMI”
        means
        JMI Equity Fund V, L.P., JMI Equity Fund V (AI), L.P. and their respective
        Affiliates.

       

      “Knowledge”
        as used
        in the phrases “to the Knowledge of Sellers,”“to Sellers’ Knowledge,”“Known to
        Sellers” and words of similar import means (i) the actual knowledge or awareness
        of Robert M. Russell Jr., Dale E. Calder, Karen F. Kupferberg, Bernie Wojcik,
        Richard MacKeen, Jim Hansen, David Bennett and Brian Anderson and (ii) the
        knowledge or awareness which a prudent business person would have obtained
        in
        the conduct of his or her business after making a reasonably diligent inquiry
        with respect to the particular matter in question.

       

      “Laurus”
        means
        Laurus Master Fund, Ltd.

       

      “Laurus
        Consent Letter”
        means
        that certain letter agreement between Parent and Laurus dated as of July
        8, 2005
        pursuant to which, among other things, Laurus consented to the Bridge Loans
        and
        the repayment of the Laurus Debt in connection with the consummation of the
        Asset Sale.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      “Laurus
        Debt”
        means
        indebtedness for borrowed money of the Parent payable to Laurus pursuant
        to that
        certain Securities Purchase Agreement, dated as of October 4, 2004, between
        Parent and Laurus.

       

      “Leased
        Real Property”
        means
        all Real Property that is leased or subleased by any Seller in connection
        with
        the operation of the Business.

       

      “Liability”
        means
        any liability, debt, obligation, deficiency, Tax, penalty, assessment, fine,
        claim, cause of action or other loss, fee, cost or expense of any kind or
        nature
        whatsoever, whether asserted or unasserted, absolute or contingent, known
        or
        unknown, accrued or unaccrued, liquidated or unliquidated, and whether due
        or to
        become due and regardless of when asserted.

       

      “Lien”
        means
        any mortgage, pledge, security interest, encumbrance, lien or charge of any
        kind
        (including, without limitation, any conditional sale or other title retention
        agreement or lease in the nature thereof) or any agreement to file any of
        the
        foregoing, any sale of receivables with recourse against the seller thereof,
        and
        any filing or agreement to file a financing statement as debtor under the
        Uniform Commercial Code or any similar statute, in each case that affects
        a
        Purchased Asset.

       

      “Loss”
        means
        any loss, liability, obligation, claim, diminution in value, damage, cost
        or
        expense, including reasonable attorneys’ fees and disbursements and costs of
        investigation in connection with any claim, action, suit or proceeding and
        including the costs of enforcing any indemnification obligations. The amount
        of
        any Loss shall be determined without regard to, or giving effect to, any
        qualification relating to materiality, the cause or occurrence of a Material
        Adverse Effect, or the knowledge of any Person contained in any representation
        or warranty giving rise to claim for indemnity hereunder.

       

      “Material
        Adverse Change”
        means a
        material adverse change in (i) the business, assets, liabilities, financial
        condition, results of operations, cash flows or prospects of the Sellers
        taken
        as a whole or the Business, (ii) the ability of the parties to consummate
        the
        transactions contemplated by this Agreement without material delay or (iii)
        the
        ability of Buyer to acquire the Purchased Assets and/or operate the Business
        in
        the same manner as Sellers prior to the Closing in all material respects;
        provided,
        however,
        that
        the following changes shall not constitute a “Material Adverse Change:”
        (x) any change or effect that results or arises from changes affecting
        the
        industries in which Sellers operate the Business generally or the United
        States
        economy generally (which changes or effects in each case do not
        disproportionately affect Sellers or the Business) or (y) any change
        or
        effect resulting from the disruption or loss of any existing or prospective
        customer, distributor or supplier relationships and any delays or cancellations
        in customer or distributor orders in that result from the public announcement
        of
        this Agreement or the pendency of the transactions contemplated
        hereby.

       

      “Material
        Adverse Effect”
        means a
        material adverse effect on (i) the business, assets, liabilities, financial
        condition, results of operations, cash flows or prospects of the Sellers
        taken
        as a whole or the Business, (ii) the ability of the parties to consummate
        the
        transactions contemplated by this Agreement without material delay or (iii)
        the
        ability of Buyer to acquire the Purchased Assets and/or operate the Business
        in
        the same manner as Sellers prior to the Closing in all material respects;
        provided,
        however,
        that
        the following effects shall not constitute a “Material Adverse Effect:”
        (x) any effect that results or arises from changes affecting the industries
        in which Sellers operate the Business generally or the United States economy
        generally (which changes or effects in each case do not disproportionately
        affect Sellers or the Business) or (y) any effect resulting from the
        disruption or loss of any existing or prospective customer, distributor or
        supplier relationships and any delays or cancellations in customer or
        distributor orders in that result from the public announcement of this Agreement
        or the pendency of the transactions contemplated hereby.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      “Owned
        Real Property”
        means
        all Real Property except for Leased Real Property.

       

      “Parent
        Common Stock”
        means
        the common stock, par value $.001 per share, of Parent.

       

      “Person”
        means a
        natural person, corporation, partnership, limited liability company,
        association, trust or other entity or organization, including a government
        or
        political subdivision or an agency or instrumentality thereof.

       

      “Proxy
        Statement”
        means
        the Parent’s proxy statement with respect to the Stockholders Meeting held by
        Parent to approve this Agreement, the Asset Sale and the transactions
        contemplated hereby.

       

      “Questra
        Litigations”
        means
        (i) the civil action pending in the United States District Court for the
        Northern District of California under civil Action No. C 04-04738 EDL entitled
        Questra Corporation v Axeda Systems Inc. and Axeda Systems Operating Company,
        Inc.; and (ii) the civil action pending in the United States District Court
        for
        the District of Massachusetts under Civil Action No. 1.04-cv-11477-RWZ entitled
        Axeda Systems Operating Company, Inc. v Questra Corporation.

       

      “Real
        Property”
        means
        all real property and leases and subleases of, and other interests in, real
        property, owned, held or used by any Seller or any of their Affiliates in
        connection with the conduct of the Business or necessary for the conduct
        of the
        Business, in each case, together with all buildings, fixtures, and improvements
        erected thereon.

       

      “Subsidiary”
        means,
        with respect to any person, any other person (other than a natural person)
        in
        which such person (or another direct or indirect Subsidiary of such person)
        holds stock or other ownership interests representing (A) more that 50% of
        the
        voting power of all outstanding stock or ownership interests of such other
        person, (B) the right to receive more than 50% of the net assets of such
        entity
        available for distribution to the holders of outstanding stock or ownership
        interests upon a liquidation or dissolution of such other person or (C) a
        general or managing partnership or membership interest in such other
        person.

       

      “Subordination
        Agreement”
        shall
        mean the Amended and Restated Subordination Agreement, dated as of the date
        hereof and as may be amended, modified and restated from time to time, among
        Parent, JMI and Laurus. 

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      “Transition
        Services Agreement”
        means
        that certain Transition Services Agreement, dated as of the date hereof,
        between
        Buyer and Sellers in substantially the form attached hereto as Exhibit
        A.

       

      “Voting
        Agreements”
        means
        those certain Voting Agreements, dated as of the date hereof, between Buyer
        and
        certain stockholders of Parent in substantially the form attached hereto
        as
Exhibit
        B.

       

      (b) Each
        of
        the following terms is defined in the Section set forth opposite such
        term:

       

      
        	
                Term

              	 	
                Section

              	 	
                Term

              	 	
                Section

              
	 	 	 	 	
                GAAP

              	 	
                3.05

              
	
                Accounting
                  Referee

              	 	
                2.07

              	 	
                Hazardous
                  Substance

              	 	
                3.18

              
	
                Acquisition
                  Proposal 

              	 	
                5.04

              	 	
                Indemnified
                  Parties

              	 	
                11.02

              
	
                Accrued
                  Sales Tax Amount

              	 	
                2.09

              	 	
                Indemnifying
                  Party

              	 	
                11.04

              
	
                Allocation
                  Statement

              	 	
                2.07

              	 	
                Interested
                  Person

              	 	
                3.23

              
	
                Apportioned
                  Obligations

              	 	
                8.03

              	 	
                IRS

              	 	
                8.03

              
	
                Asset
                  Sale

              	 	
                3.02

              	 	
                Leases

              	 	
                3.08

              
	
                Assumed
                  Liabilities

              	 	
                2.03

              	 	
                Multiemployer
                  Plan

              	 	
                9.02

              
	
                Benefit
                  Arrangement

              	 	
                9.01

              	 	
                Parent
                  Board 

              	 	
                3.02

              
	
                Business
                  

              	 	
                Recitals

              	 	
                Permits

              	 	
                3.16

              
	
                Business
                  Intellectual Property

              	 	
                3.14

              	 	
                Personal
                  Property

              	 	
                2.01

              
	
                Buyer
                  Indemnified Parties

              	 	
                11.02

              	 	
                Post-Closing
                  Tax Period

              	 	
                8.01

              
	
                Closing
                  

              	 	
                2.06

              	 	
                Pre-Closing
                  Tax Period

              	 	
                8.01

              
	
                Closing
                  Balance Sheet

              	 	
                10.02

              	 	
                Publicly
                  Available Software

              	 	
                3.14

              
	
                COBRA

              	 	
                9.03

              	 	
                Purchase
                  Price

              	 	
                2.06

              
	
                Code

              	 	
                8.01

              	 	
                Purchased
                  Assets

              	 	
                2.01

              
	
                Co-Employer

              	 	
                9.01

              	 	
                Registered
                  IP

              	 	
                3.14

              
	
                Commitment

              	 	
                5.01

              	 	
                Release

              	 	
                3.18

              
	
                Confidentiality
                  Agreement

              	 	
                13.07

              	 	
                Representative

              	 	
                5.04

              
	
                Consent

              	 	
                3.05

              	 	
                Required
                  Consent

              	 	
                3.03

              
	
                Contracts

              	 	
                2.01

              	 	
                Restricted
                  Parties

              	 	
                6.01

              
	
                Conveyance
                  Documents

              	 	
                2.06

              	 	
                SEC
                  

              	 	
                3.05

              
	
                Customers
                  or Business Relations

              	 	
                5.08

              	 	
                Securities
                  Act

              	 	
                3.05

              
	
                Damages

              	 	
                11.02

              	 	
                Securities
                  Laws 

              	 	
                3.05

              
	
                Disclosure
                  Schedule

              	 	
                Article
                  III

              	 	
                Seller
                  Indemnified Parties

              	 	
                11.02

              
	
                DRM
                  Business

              	 	
                Recitals

              	 	
                Seller
                  Reports

              	 	
                3.05

              
	
                Employee

              	 	
                9.01

              	 	
                Seller
                  Software

              	 	
                3.14

              
	
                Employee
                  Plan

              	 	
                9.01

              	 	
                Special
                  Committee

              	 	
                3.02

              
	
                Environment

              	 	
                3.18

              	 	
                Stockholders
                  Meeting

              	 	
                5.05

              
	
                Environmental
                  Law

              	 	
                3.18

              	 	
                Supervisor
                  Business

              	 	
                Recitals

              
	
                Environmental
                  Liabilities

              	 	
                3.18

              	 	
                Supervisor
                  Employee

              	 	
                6.02

              
	
                Environmental
                  Permits

              	 	
                3.18

              	 	
                Tax

              	 	
                8.01

              
	
                ERISA

              	 	
                9.01

              	 	
                Tax
                  Escrow Account

              	 	
                2.06

              
	
                ERISA
                  Affiliate

              	 	
                9.01

              	 	
                Tax
                  Return

              	 	
                8.01

              
	
                Exchange
                  Act 

              	 	
                3.03

              	 	
                Trade
                  Secrets

              	 	
                3.14

              
	
                Excluded
                  Assets

              	 	
                2.02

              	 	
                Transferred
                  Employee

              	 	
                9.01

              
	
                Excluded
                  Contracts

              	 	
                2.02

              	 	
                Transferring
                  Affiliates

              	 	
                3.09

              
	
                Excluded
                  Liabilities

              	 	
                2.04

              	 	
                WARN
                  Act

              	 	
                9.03

              
	
                Financial
                  Statements

              	 	
                3.05

              	 	 	 	 

      

       

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      ARTICLE
        II

       

      PURCHASE
        AND SALE

       

      2.01.  Purchase
        and Sale.
        Upon
        the terms and subject to the conditions set forth in this Agreement, Buyer
        shall
        purchase from Sellers, and each Seller shall sell, transfer, assign and deliver
        (or cause to be sold, transferred, assigned and delivered) to Buyer, at Closing
        free and clear of all Liens by appropriate instruments of conveyance reasonably
        satisfactory to Buyer, all of the assets, properties, rights and business,
        other
        than the Excluded Assets, of every kind and description, wherever located,
        real,
        personal or mixed, tangible or intangible, owned, held or used by Sellers
        (or
        any of them) or any Affiliate of Sellers in the conduct of the Business or
        necessary for the conduct of the Business (as the same shall exist on the
        Closing Date), including all assets shown on the Business Balance Sheet and
        not
        disposed of in the ordinary course of business since the Balance Sheet Date,
        and
        all such assets acquired by any Seller or any of their Affiliates between
        the
        Balance Sheet Date and the Closing Date (collectively, the “Purchased
        Assets”),
        and
        including, without limitation, all right, title and interest of any Seller
        and
        any of their Affiliates in, to and under such of the foregoing as are more
        specifically described below:

       

      (a)  the
        Leased Real Property listed on Schedule
        2.01(a);

       

      (b)  all
        personal property and interests therein owned, held or used by any Seller
        or any
        of their Affiliates in connection with the conduct of the Business or necessary
        for the conduct of the Business, including machinery, equipment, automobiles
        and
        other vehicles, furniture, office equipment, computers and all related
        equipment, communications equipment, vehicles, storage tanks, spare and
        replacement parts, fuel and all other tangible property, wherever located
        (including such property and interests owned by any Seller or any of their
        Affiliates in the possession of manufacturers, suppliers, customers,
        distributors, sales representatives or others or in transit) (collectively,
        the
“Personal
        Property”),
        including the items listed on Schedule
        2.01(b);

       

      (c)  all
        raw
        materials, work-in-process, finished goods, supplies and other inventories,
        wherever situated, owned, held or used by any Seller or any of their Affiliates
        in connection with the conduct of the Business or necessary for the conduct
        of
        the Business;

       

      (d)  except
        for any Excluded Contract and subject to Section 2.05, all rights existing
        under
        all contracts, agreements, leases, licenses, commitments, sales and purchase
        orders and other instruments to which any Seller or any of their Affiliates
        is a
        party in connection with the conduct of the Business or necessary for the
        conduct of the Business, including the items listed on Schedule
        3.13
        (collectively, the “Contracts”);

       

      (e)  all
        Accounts Receivable of any Seller;

       

      (f)  all
        prepaid expenses and deposits owned, held or used by any Seller or any of
        their
        Affiliates in connection with the conduct of the Business or necessary for
        the
        conduct of the Business, including ad valorem taxes, leases and
        rentals;

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      (g)  all
        of a
        Seller’s rights, claims, credits, deposits, prepayments, warranties, guarantees,
        refunds, causes of action or rights of set-off against third parties, including
        unliquidated rights under manufacturers’ and vendors’ warranties relating to the
        Business; 

       

      (h)  all
        of a
        Seller’s Intellectual Property relating to the Business (including the items
        listed on Schedule
        3.14),
        including (A) all of the computer software owned by Sellers (or any of them)
        or
        any Affiliate of Sellers (including the items listed on Schedule
        2.01(h))
        in
        connection with the conduct of the Business or necessary for the conduct
        of the
        Business, (B) all patents and patent applications owned, held or used by
        Sellers
        (or any of them) or any Affiliates of Sellers (including the items listed
        on
Schedule 2.01(h))
        relating to the Business, (C) all of a Seller’s trademarks, services marks,
        trade dress, logos, trade names and domain names owned, held or used for
        use in
        connection with the conduct of the Business or necessary for the conduct
        of the
        Business, and all corporate names which include the word “Axeda” or “eMation”
        (including the items listed on Schedule
        2.01(h)),
        together with all translations, adaptations, derivations and combinations
        thereof and including all goodwill associated therewith, and all applications,
        registrations and renewals in connection therewith, and (D) all internet
        domain
        names used in the Business, including “axeda.com,”“axeda.co.uk,”“axeda.at,”“axeda.co.at,”“axeda.com.mx,”“axeda.ru,”“axeda.com.pe,”“axeda.fr,”“axeda.ch,”“axeda.nu,”“axeda.com.pt,”“axeda.dk,”“axeda.jp,”“axeda.com.pl,”“axeda.pl,”“axeda.it,”“axeda.co.il,”“axeda.com.fr,”“axeda.nl,”“emation.com,”“axeda.net,”“axeda.org,”“axeda.ws,”“axeda.be,”“axeda.ac,”“axeda.info,”“axeda.de,”“axeda.as,”“axeda.co.hu,”“axeda.com.ru,”“emation.com,”“emation.de,”“emation.net”
        and all other domain names under
        which Sellers conduct or have conducted the Business.

       

      (i)  all
        transferable licenses, permits or other governmental authorizations affecting,
        or relating in any way to, the Business, including the items listed on
Schedule
        2.01(i);

       

      (j)  except
        to
        the extent they relate exclusively to Excluded Assets or Excluded Liabilities,
        all books, records, files and papers, whether in hard copy or computer format
        owned, held or used by any Seller or any of their Affiliates in connection
        with
        the conduct of the Business or necessary for the conduct of the Business,
        including engineering information, sales and promotional literature, manuals
        and
        data, sales and purchase correspondence, lists of present and former suppliers,
        lists of present and former customers, lists of present and former distributors,
        sales representatives or agents, personnel and employment records, agents,
        and
        all information relating to Taxes imposed on or with respect to the
        Business;

       

      (k)  all
        rights contractual or otherwise relating to the Business to enforce
        infringement, assignment of inventions or developments, non-competition,
        confidentiality or non-solicitation against employees (including the Transferred
        Employees), consultants and other third parties;

       

      (l)  all
        insurance, warranty and condemnation net proceeds received after the Closing
        Date with respect to damage, non-conformance or loss to the Purchased
        Assets;

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      (m)  all
        goodwill associated with, and the going concern value of, the Business or
        the
        Purchased Assets, together with the right to represent to third parties that
        Buyer is the successor to the Business; 

       

      (n)  all
        assets (not already identified above) reflected in the Closing Balance Sheet,
        other than Excluded Assets; and 

       

      (o)  all
        other
        assets of any kind or nature of a Seller relating in any way to the Business,
        other than the Excluded Assets. 

       

      2.02.  Excluded
        Assets.
        Buyer
        expressly understands and agrees that the following assets and properties
        of
        Sellers (the “Excluded
        Assets”)
        shall
        be excluded from the Purchased Assets:

       

      (a)  a
        Seller’s rights under or pursuant to this Agreement;

       

      (b)  a
        Seller’s general ledger, accounting records, minute books, statutory books and
        corporate seal, provided
        that
        Buyer shall be given copies of the general ledger and accounting records
        relating in any way to the Business as such documents exist as of the Closing
        Date;

       

      (c)  all
        Real
        Property, other than the Leased Real Property set forth in Schedule
        2.01(a),
        of any
        Seller;

       

      (d)  all
        rights existing under each Contract set forth on Schedule
        2.02(d)
        (collectively, the “Excluded
        Contracts”);

       

      (e)  any
        intercompany or intracompany accounts or other receivables;

       

      (f)  the
        capital stock of any Subsidiary;

       

      (g)  bank
        accounts and all of each Seller’s cash and cash equivalents on hand and in
        banks;

       

      (h)  any
        pension, profit-sharing or employee benefit plans, including each Sellers’
        interest in any welfare plan, pension plan or benefit arrangement, except
        as
        otherwise provided herein;

       

      (i)  all
        employment agreements and severance arrangements of a Seller, provided that
        Buyer may enforce the rights thereunder that are granted under Section 2.01(l)
        above;

       

      (j)  all
        agreements evidencing the Laurus Debt or other indebtedness for money borrowed
        by any Seller or any Affiliates of Sellers, all agreements relating to the
        obligations of any Seller or any Affiliates of Sellers to issue equity
        securities (including without limitation any warrants or other rights to
        purchase capital stock of Parent or any other Person);

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      (k)  any
        Purchased Assets sold or otherwise disposed of or consumed in the ordinary
        course of operation of the Business consistent with past practices and not
        in
        violation of any provisions of this Agreement during the period from the
        date
        hereof until the Closing Date; 

       

      (l)  any
        assets that are either (i) used by Sellers and their Affiliates exclusively
        in the businesses of Sellers and their Affiliates unrelated to the Business
        including, but not limited to, the assets used exclusively by Sellers and
        their
        Affiliates in connection with the operation of the Supervisor Business or
        (ii) set forth on Schedule 2.02(l);
        and 

       

      (m)  any
        right
        to receive mail and other communications addressed to a Seller relating
        exclusively to the Excluded Assets or the Excluded Liabilities.

       

      2.03.  Assumption
        of Liabilities.
        As
        partial consideration for the sale, transfer, assignment and delivery of
        the
        Business and the Purchased Assets and upon the terms and subject to the
        conditions set forth in this Agreement, Buyer shall assume, pay and perform
        the
        following liabilities and obligations of Sellers (collectively, the
“Assumed
        Liabilities”)
        from
        and after the Closing and no others:

       

      (a)  all
        liabilities and obligations of a Seller arising after the Closing Date under
        the
        Contracts that have been duly assigned by a Seller to Buyer (other than
        liabilities or obligations (including indemnification obligations) attributable
        to any failure by any Seller or any of their Affiliates to comply with the
        terms
        thereof);

       

      (b)  the
        accrued expenses and trade accounts payable (excluding amounts due to Affiliates
        of any Seller) of a Seller that have been incurred exclusively in the ordinary
        course of the conduct of the Business consistent with past practices through
        the
        Closing Date, but only in the amounts and to the extent reflected in the
        Closing
        Balance Sheet and, with respect to accrued expenses for royalties of a Seller,
        only if the related license agreement has been duly assigned by Sellers to
        Buyer
        at Closing; and

       

      (c)  the
        accrued vacation through the Closing Date of the Transferred Employees owed
        by
        Sellers and incurred in the ordinary course of the conduct of the Business
        consistent with past practices to the extent reflected in the Closing Balance
        Sheet. 

       

      2.04.  Excluded
        Liabilities.
        Notwithstanding any provision in this Agreement or any other writing to the
        contrary, Buyer will assume at Closing only the Assumed Liabilities and Buyer
        does not assume or agree or undertake to pay, satisfy, discharge or perform
        in
        respect of, and will not be deemed by virtue of this Agreement or any document
        delivered in connection herewith, or as a result of the consummation of the
        transactions contemplated hereby to have assumed or to have agreed to pay,
        satisfy, discharge or perform, any other Liability of any Seller or any
        Affiliate of a Seller (or any predecessor owner of all or part of its business
        and assets) of whatever nature whether presently in existence or arising
        or
        asserted hereafter. All such Liabilities shall be retained by and remain
        obligations and liabilities of Sellers or their Affiliates (all such Liabilities
        not being assumed by Buyer being herein referred to as the “Excluded
        Liabilities”).
        Without limiting the foregoing, none of the following shall be Assumed
        Liabilities for the purposes of this Agreement:

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      (a)  any
        and
        all Liabilities of Sellers under the Contracts that have not been duly assigned
        by a Seller to Buyer;

       

      (b)  except
        as
        provided in Article IX or as set forth in Section 2.03(c), any and all
        Liabilities of Sellers relating to employee benefits or compensation
        arrangements of any nature, including any severance obligations and any and
        all
        Liabilities under any of Seller’s employee benefit agreements, plans or other
        arrangements listed on Schedules 9.02
        and
9.04;

       

      (c)  except
        as
        set forth in Section 2.03(c), any and all Liabilities relating to or arising
        out
        of the employment by a Seller and/or termination by a Seller of employees
        employed in the Business, including employees who are parties to employment,
        compensation or other similar agreements with Seller; 

       

      (d)  any
        and
        all Liabilities of Sellers for breach of contract, breach of warranty, personal
        injury, property damage, infringement, violation of law, indemnification
        or
        otherwise (whether based on negligence, breach of warranty, strict liability
        or
        any other theory) caused by or arising out of or resulting from, directly
        or
        indirectly, any alleged or actual acts or omissions occurring on or before
        the
        Closing Date; 

       

      (e)  any
        and
        all Liabilities of a Seller for Taxes (including any Taxes that arise as
        a
        result of the transactions contemplated by this Agreement);

       

      (f)  any
        and
        all Liabilities for or relating to any Indebtedness or any equity securities
        of
        Sellers, including any warrants and other rights to acquire equity securities
        of
        any Seller or any Affiliates of Sellers or any other Person;

       

      (g)  any
        and
        all Environmental Liabilities;

       

      (h)  any
        and
        all litigation, claim, assessment, action, suit, proceeding, order, judgment,
        decree or investigation of any kind or nature and any and all Liabilities
        of
        Sellers or any of their Affiliates relating to the Questra Litigations,
        including Liabilities for (i) payment or performance of any judgment, order
        or
        decree that may be entered against any of such Sellers in either or both
        of such
        litigation proceedings; and (ii) payment of all counsel fees, expert witness
        fees and other fees and costs pertaining to the prosecution or defense of
        either
        or both of such litigation proceedings;

       

      (i)  any
        and
        all Liabilities of Sellers to any present or former officer (except as set
        forth
        in Section 2.03(c)), director or stockholder of a Seller in his capacity
        as
        such; 

       

      (j)  any
        and
        all Liabilities relating to an Excluded Asset; and

       

      (k)  any
        and
        all other Liabilities of every kind of a Seller incurred by a Seller in
        connection with, or arising by reason of, its ownership of the Purchased
        Assets
        or its conduct of the Business on or prior to the Closing, other than the
        Assumed Liabilities.

       

      
        
           

        

        
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      2.05.  Assignment
        of Contracts and Rights.
        Sellers
        shall use their best efforts to obtain the consent of all third parties whose
        consent is required to assign to Buyer any Purchased Asset (including the
        Contracts) or any claim or right or any benefit arising thereunder or resulting
        therefrom, including the consents listed in Schedule 2.05.
        Anything in this Agreement to the contrary notwithstanding, this Agreement
        shall
        not constitute an agreement to assign any Purchased Asset or any claim or
        right
        or any benefit arising thereunder or resulting therefrom if an attempted
        assignment thereof, without consent of a third party, would constitute a
        breach
        or other contravention thereof or in any way adversely affect the rights
        of
        Buyer or a Seller thereunder. Except with respect to those Contracts identified
        in Schedule
        10.02(d)
        for
        which all consents must be obtained prior to Closing, if after Sellers’ efforts
        such consent is not obtained, or an attempted assignment thereof would be
        ineffective or would adversely affect the rights of Sellers or Buyer thereunder
        so that Buyer would not in fact receive all such rights, Sellers and Buyer
        will
        cooperate in a mutually agreeable arrangement under which Buyer would obtain
        the
        benefits and assume the obligations thereunder in accordance with this
        Agreement, including subcontracting, sub-licensing or subleasing to Buyer,
        or
        under which a Seller would enforce for the benefit of Buyer, with Buyer assuming
        such Seller’s obligations, any and all rights of such Seller against a third
        party thereto. Sellers will promptly pay (or cause to be paid) to Buyer when
        received all monies received by a Seller or any Affiliate of a Seller under
        any
        Purchased Asset or any claim or right or any benefit arising thereunder,
        except
        to the extent the same represents an Excluded Asset. In the event of any
        such
        arrangement, Sellers and Buyer shall, to the extent the benefits therefrom
        and
        obligations thereunder have not been provided by alternate arrangements
        satisfactory to Buyer or Sellers, negotiate in good faith an adjustment in
        the
        consideration paid by Buyer for the Purchased Assets, which adjustment shall
        equal any costs incurred by Buyer to another Person to replace the benefit
        arising from any such unassigned Purchased Asset.

       

      2.06.  Purchase
        Price; Closing.
        

       

      (a)  In
        consideration of the conveyance to Buyer of all right, title and interest
        in and
        to the Purchased Assets and the other rights granted to Buyer hereunder,
        and
        subject to the terms and conditions hereof, Buyer shall at the Closing (i)
        assume the Assumed Liabilities, (ii) set aside in a segregated bank account
        of
        Buyer (the “Tax
        Escrow Account”)
        the
        Accrued Sales Tax Amount (as defined below), the proceeds of which shall
        be used
        to pay certain accrued sales taxes of the Business in accordance with Section
        2.09 below, and (iii) pay an aggregate amount of Seven Million U.S. Dollars
        ($7,000,000.00) (the “Cash
        Consideration”)
        in the
        manner provided below (collectively (i), (ii) and (iii), the “Purchase
        Price”).
        For
        the sake of expediency, Buyer shall cause the Cash Consideration to be paid
        directly to ASOC, acting on behalf of and as agent for Sellers.

       

      (b)  The
        closing (the “Closing”)
        of the
        purchase and sale of the Purchased Assets and the assumption of the Assumed
        Liabilities hereunder shall take place at the offices of Goodwin Procter
        LLP in
        Boston, Massachusetts no later than three business days after satisfaction
        of
        the conditions set forth in Article X, or at such other time or place
        as
        Buyer and Sellers may agree. At the Closing:

       

      (i)  Buyer
        shall pay to ASOC, acting on behalf of all Sellers, the Cash Consideration
        by
        wire transfer in immediately available funds to an account maintained by
        ASOC,
        such account to be designated by Parent by written notice to Buyer not later
        than two business days prior to the Closing Date; provided,
        however,
        that to
        the extent that all or any portion of the Bridge Loans are outstanding
        immediately prior to the Closing, then that portion of the Cash Consideration
        equal to the aggregate amount outstanding under the Bridge Loans shall not
        be
        paid in cash but rather shall be paid by the surrender of the notes evidencing
        the Bridge Loans to Parent at Closing;

       

      
        
           

        

        
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      (ii)  Sellers
        shall execute and deliver to Buyer such instruments of assignment, deeds,
        bills
        of sale, endorsements, consents, assignments and other good and sufficient
        instruments of conveyance and assignment (the “Conveyance
        Documents”)
        as the
        parties shall deem reasonably necessary or appropriate to vest in Buyer all
        right, title and interest in, to and under the Purchased Assets; 

       

      (iii)  Buyer
        shall execute and deliver to Sellers such instruments of assumption as the
        parties shall deem reasonably necessary or appropriate for Buyer to assume
        the
        Assumed Liabilities; 

       

      (iv)  Sellers
        and Buyer shall execute and deliver each of the Ancillary Agreements to be
        entered into by it at the Closing, in each case substantially in the form
        attached as an Exhibit to this Agreement; and

       

      (v)  Sellers
        and Buyer shall execute and deliver all such instruments, documents and
        certificates as may be reasonably requested by the other party that are
        necessary, appropriate or desirable for the consummation at the Closing of
        the
        transactions contemplated by this Agreement, including those instruments,
        documents and certificates identified in Article X below.

       

      2.07.  Allocation
        of Purchase Price.

       

      (a)  As
        soon
        as practicable after the Closing, Buyer shall deliver to Parent a statement
        (the
“Allocation
        Statement”),
        setting forth the value of the Purchased Assets and of the covenant not to
        compete described in Article VI, which shall be used for the allocation of
        the
        Purchase Price among the Purchased Assets and the covenant not to
        compete.

       

      (b)  Parent
        shall have a period of 15 days after the delivery of the Allocation
        Statement to present in writing to Buyer notice of any objections Parent
        may
        have to the allocation set forth in the Allocation Statement. Unless Parent
        timely objects, the Allocation Statement shall be binding on the parties
        hereto
        without further adjustment.

       

      (c)  If
        Parent
        shall raise any objections within the 15 day period, Buyer and Parent
        shall
        negotiate in good faith and use their commercially reasonable efforts to
        resolve
        such dispute. If the parties fail to agree within five days after the delivery
        of the notice, then the disputed items shall be resolved by KPMG, LLP, or
        if
        such firm declines to act in such capacity, by such other firm of independent
        nationally recognized accountants having no material relationship with Buyer
        or
        Sellers reasonably acceptable to both parties (the “Accounting
        Referee”).
        The
        Accounting Referee shall resolve the dispute within 30 days of having
        the
        item referred to it. The costs, fees and expenses of the Accounting Referee
        shall be borne equally by Sellers and Buyer.

       

      (d)  Sellers
        and Buyer shall report an allocation of such Purchase Price among the Purchased
        Assets and the covenant not to compete in a manner entirely consistent with
        the
        Allocation Statement (including any adjustment made pursuant to Section
        2.07(d)), and shall act in accordance with such Allocation Statement in the
        preparation of financial statements and filing of all Tax Returns (including,
        without limitation, filing Form 8594 with its Federal Income Tax Return
        for
        the taxable year that includes the date of the Closing) and in the course
        of any
        Tax audit, Tax review or Tax litigation relating thereto.

       

      
        
           

        

        
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      (e)  No
        later
        than 10 days prior to the filing of their respective Forms 8594
        relating to this transaction, each party shall deliver to the other party
        a copy
        of its Form 8594. 

       

      2.08.  Signing
        Deliverables.
        Concurrent with the execution of this Agreement, the following agreements
        and
        documents shall have been duly executed and delivered to Buyer:

       

      (a)  A
        Voting
        Agreement shall have been executed by each director (other than members of
        the
        Special Committee) and each executive officer of Parent and any other director
        or executive officer of any other Seller who holds shares of Parent Common
        Stock
        or options to purchase shares of Parent Common Stock.

       

      (b)  The
        Bridge Loan Documents duly executed by Sellers, certain Affiliates of Sellers
        and Laurus each to the extent it is a party thereto.

       

      2.09.  Sales
        Tax Escrow.
        For a
        period of four months following the Closing Date, Buyer shall cause to be
        paid
        out of the funds held in the Tax Escrow Account those certain sales tax amounts
        then due and payable by Sellers which sales taxes relate directly to the
        sale or
        license of products and services of the Business and which are identified
        in
Schedule
        2.09
        (the
        amount set forth in Schedule
        2.09,
        as
        reduced by payment, abatement, settlement or otherwise prior to Closing,
        is
        referred to herein as the “Accrued
        Sales Tax Amount”).
        In no
        event shall the aggregate amount paid or payable from the Tax Escrow Amount
        under this Section 2.09 exceed the Accrued Sales Tax Amount. Payments under
        this
        Section 2.09 shall be made directly to the applicable state taxing authorities
        on behalf of Sellers. Buyer’s obligation to remit any such payments from the Tax
        Escrow Account shall be subject to Buyer’s prior receipt of written notice from
        Sellers identifying the exact amount of tax due, the name of the appropriate
        taxing authority, a statement as to the basis for such tax and its relation
        to
        the Business, and such other information as necessary to remit payment to
        the
        taxing authority. Sellers shall present to Buyer evidence of such tax obligation
        upon request, which evidence shall be reasonably satisfactory to Buyer. On
        the
        four month anniversary of the Closing Date, all amounts remaining in the
        Tax
        Escrow Account shall be released to Buyer. The parties hereto acknowledge
        and
        agree that (i) the Tax Escrow Account shall at all times remain the property
        and
        asset of Buyer, (ii) Sellers have no right, title or interest in or to the
        Tax
        Escrow Account and the funds therein, and (iii) Buyer is not, under this
        Section
        2.09 or otherwise, assuming any tax obligations or tax liabilities of Sellers
        or
        any of their Affiliates. 

       

      ARTICLE
        III  

       

      REPRESENTATIONS
        AND WARRANTIES OF SELLERS

       

      Except
        as
        set forth in the disclosure schedules dated as of the date hereof and delivered
        herewith to Buyer (which disclosure schedules identify the section and
        subsection to which each disclosure therein relates, provided that disclosure
        in
        any section of such schedules shall be deemed to be disclosed with respect
        to
        any other section of Article III of this Agreement to the extent that it
        is
        readily apparent from the face of such disclosure that such disclosure is
        applicable to such other section) (the “Disclosure
        Schedules”),
        Sellers hereby jointly and severally represent and warrant to Buyer
        that:

       

      
        
           

        

        
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      3.01.  Corporate
        Existence and Power; Subsidiaries.
        

       

      (a)  Each
        Seller is a corporation duly incorporated, validly existing and in good standing
        under the laws of its jurisdiction of incorporation as set forth in Schedule
        3.01(a),
        and has
        all corporate powers and all governmental licenses, authorizations, consents
        and
        approvals required to carry on the Business as now conducted. Each Seller
        is
        duly qualified to do business as a foreign corporation and is in good standing
        in each jurisdiction where the character of the property owned or leased
        by it
        or the nature of its activities makes such qualification necessary, except
        for
        those jurisdictions where the failure to be so qualified would not, individually
        or in the aggregate, have a Material Adverse Effect. Each Seller has heretofore
        delivered to Buyer true and complete copies of its corporate charter and
        bylaws
        as currently in effect. 

       

      3.02.  Corporate
        Authorization.
        Each
        Seller has full corporate power and authority to execute and deliver this
        Agreement and each of the Ancillary Agreements to which it is a party and
        to
        consummate the transactions contemplated hereby and thereby. Sellers, with
        the
        assistance of financial and legal advisers, conducted an arms’ length marketing
        process of the Business, out of which Buyer’s bid was selected as the best offer
        for the Business and the Purchase Price represents the fair market value
        of the
        Purchased Assets. The special committee of the Parent’s board of directors (the
“Special
        Committee”)
        has,
        by resolutions duly adopted by unanimous vote of its members, (i) determined
        that (A) the sale of Purchased Assets contemplated by this Agreement (the
        “Asset
        Sale”)
        is
        advisable and in the best interests of Sellers, Sellers’ Affiliates and their
        constituencies including creditors and Parent’s stockholders, and (B) the
        Purchase Price to be received by Sellers is fair to Sellers, Sellers’ Affiliates
        and their constituencies including creditors and Parent’s stockholders, (ii)
        recommended that the boards of directors of Parent and the other Sellers
        approve
        and adopt this Agreement and approve the Asset Sale and the other transactions
        contemplated hereby, and (iii) recommended approval and adoption by the
        stockholders of Parent of this Agreement and the transactions contemplated
        hereby. The board of directors of Parent (the “Parent
        Board”)
        has,
        by resolutions duly adopted by unanimous vote of its members, approved and
        adopted this Agreement, approved the Asset Sale and the transactions
        contemplated hereby and has recommended that the Parent’s stockholders approve
        and adopt this Agreement and approve the Asset Sale and the transactions
        contemplated hereby at the Stockholders Meeting, which will be held in
        accordance with the provisions of Section 5.05. In connection with the
        foregoing, the Parent Board has taken such actions and votes as are necessary
        (if any) on its part to render the provisions of Section 203 of the Delaware
        General Corporation Law and all other takeover statutes applicable to Delaware
        corporations and any other applicable takeover statutes of any other state,
        inapplicable to this Agreement, the Asset Sale and the transactions contemplated
        by this Agreement. The board of directors and stockholders of each Seller
        (other
        than Parent’s stockholders) have duly approved this Agreement and all other
        Ancillary Agreements to which it is a party and have duly authorized the
        execution and delivery of this Agreement and all other Ancillary Agreements
        to
        which it is a party and the consummation of the Asset Sale and the other
        transactions contemplated hereby and thereby. Subject only to the approval
        of
        the Asset Sale by the holders of a majority of the outstanding shares of
        Parent
        Common Stock, no other corporate proceedings on the part of any Seller are
        necessary to approve and authorize the execution and delivery of this Agreement
        or the other Ancillary Agreements to which a Seller is a party and the
        consummation of the Asset Sale and the other transactions contemplated hereby
        and thereby. This Agreement and all other Ancillary Agreements to which a
        Seller
        is a party have been duly executed and delivered by such Seller and constitute
        the valid and binding agreements of such Seller, enforceable against such
        Seller
        in accordance with their terms. 

       

      
        
           

        

        
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      3.03.  Governmental
        Authorization; Consents.

       

      (a)  The
        execution, delivery and performance by each Seller of this Agreement and
        each of
        the Ancillary Agreements to which such Seller is a party and the consummation
        of
        the Asset Sale and the other transactions contemplated hereby or thereby
        require
        no action by or in respect of, or filing with, any governmental body, agency,
        official or authority, other than the filings required under the proxy
        solicitation rules under the Securities and Exchange Act of 1934, as amended
        (the “Exchange
        Act”).

       

      (b)  Schedule
        3.03
        sets
        forth each consent, approval, waiver or other action (a “Required
        Consent”)
        by any
        Person under any contract, agreement, indenture, lease, instrument or other
        document to which a Seller is a party or is bound that is required or necessary
        (i) for the execution, delivery and performance by Sellers of this Agreement
        and
        each Ancillary Agreement to which a Seller is a party, or for the consummation
        of the Asset Sale and the transactions contemplated hereby or thereby (including
        assignment of the Contracts under Section 2.02(d)) or (ii) to prevent the
        other
        party to any such contract, agreement, indenture, lease, instrument or other
        document from having a right to terminate such agreement or to seek the release
        of source code relating to a Seller’s Intellectual Property as a result of the
        execution, delivery or performance by Sellers of this Agreement and each
        Ancillary Agreement to which Sellers are a party, or for the consummation
        of the
        transactions contemplated hereby or thereby. The Laurus Consent Letter remains
        in full force and effect and has not been waived, amended or
        modified.

       

      (c)  No
        consents, approvals, authorization or permits of, or filing with or notification
        to, the Israeli Investment Center of the Israeli Ministry of Trade &
        Industry, the Office of the Chief Scientist of the Israeli Ministry of Trade
        & Industry, the Israeli Commissioner of Restrictive Trade Practices or any
        other foreign agency is required or necessary for the execution, delivery
        or
        performance by any Seller of this Agreement and the Ancillary Agreements
        or for
        the consummation of the Asset Sale and the other transactions contemplated
        hereby or thereby.

       

      3.04.  Non-Contravention.
        Except
        as set forth in Schedule
        3.04,
        the
        execution, delivery and performance by Sellers of this Agreement and each
        Ancillary Agreement to which a Seller is a party, and the consummation of
        the
        transactions contemplated hereby and thereby, do not and will not
        (a) contravene or conflict with the corporate charter or bylaws (or
        similar
        organizational documents) of any Seller, (b) contravene or conflict
        in any
        material respect with any provision of any law, regulation, judgment,
        injunction, order, Permit or decree binding upon or applicable to any Seller
        or
        the Business (c) assuming the receipt of all Required Consents, constitute
        a default (with or without notice or lapse of time, or both) under or give
        rise
        to any right of termination, cancellation or acceleration of any right or
        obligation of any Seller, or to a loss of any benefit, relating to the Business
        to which any Seller is entitled under any provision of any agreement, contract
        or other instrument binding upon any Seller or (d) result in the creation
        or
        imposition of any Lien on any Purchased Asset.

       

      
        
           

        

        
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      3.05.  SEC
        Reports; Financial Statements.

       

      (a)  Parent
        has filed with the United States Securities and Exchange Commission (the
        “SEC”)
        all
        forms, reports, schedules, statements and other documents required to be
        filed
        by it since December 31, 2002 (as such documents have been amended since
        the
        time of their filing, collectively, the “Seller
        Reports”).
        As of
        their respective dates or, if amended, as of the date of the last such
        amendment, the Seller Reports, including, without limitation, any financial
        statements or schedules included therein, complied in all material respects
        with
        the Securities Act of 1933, as amended (the “Securities
        Act”)
        or the
        Exchange Act, as the case may be, and the rules and regulations of the SEC
        promulgated thereunder applicable to such Seller Reports (collectively, the
        “Securities
        Laws”),
        and
        did not contain any untrue statement of a material fact or omit to state
        a
        material fact required to be stated therein or necessary in order to make
        the
        statements therein, in light of the circumstances under which they were made,
        not misleading. Other than Parent, no other Seller or any Subsidiary is required
        to file any forms, reports or other documents with the SEC pursuant to Sections
        13 or 15 of the Exchange Act. 

       

      (b)  Set
        forth
        in Schedule 3.05
        are true
        and complete copies of (i) the audited balance sheet and the related audited
        statements of operations and cash flows for the twelve months ended December
        31,
        2004, of Parent and its Subsidiaries on a consolidated basis, together with
        the
        report of the independent accountants thereon, (ii) the unaudited balance
        sheet
        and the related unaudited statements of operations and cash flows for the
        twelve
        months ended December 31, 2004, of Parent and each of its Subsidiaries on
        a
        consolidating basis that were used in the preparation of the financial
        statements referred to in clause (i), (iii) the unaudited consolidated balance
        sheet and related unaudited consolidated statements of operations and cash
        flows
        for the six months ended June 30, 2005, of Parent and its Subsidiaries on
        a
        consolidated basis, (iv) the unaudited balance sheet and related unaudited
        statements of operations and cash flows for the six months ended June 30,
        2005,
        of Parent and each of its Subsidiaries on a consolidating basis that were
        used
        in the preparation of the financial statements referred to in clause (iii)
        (collectively, together with any subsequent financial statements of Parent
        and/or Subsidiaries delivered pursuant to Section 5.03 hereof, the
        “Financial
        Statements”).
        The
        Financial Statements have been prepared from, and are in accordance with,
        the
        books and records of Parent and its Subsidiaries, comply in all material
        respects with applicable accounting requirements and with the published rules
        and regulations of the SEC with respect thereto, have been prepared (or to
        the
        extent of a Subsidiary organized in a foreign jurisdiction, have been
        reconciled) in accordance with United States generally accepted accounting
        principles (“GAAP”)
        applied on a consistent basis during the periods involved (except as may
        be
        indicated in the notes thereto or, in the case of unaudited interim financial
        statements, as may be permitted by the SEC on Form 10-Q, 8-K or any
        successor form under the Exchange Act) and fairly present the consolidated
        financial position and the results of operations and cash flows of Parent
        and
        its Subsidiaries as at the dates thereof or for the periods presented
        therein.

       

      
        
           

        

        
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      (c)  Schedule
        3.05
        also
        contains a true and complete copy of the Business Balance Sheet. The Business
        Balance Sheet (i) has been derived from the Financial Statements and (ii)
        represents Seller’s good faith allocations intended to fairly present the
        combined financial position of the Business as of the date thereof under
        the
        heading “DRM Buyer.”

       

      (d)  Parent
        (i) keeps books, records and accounts which, in reasonable detail,
        accurately and fairly reflect the transactions and dispositions of the assets
        of
        Parent and its Subsidiaries and (ii) maintains a system of internal
        accounting controls sufficient to provide reasonable assurances that
        (w) transactions are executed in accordance with management’s general or
        specific authorization; (x) transactions are recorded as necessary
        (1) to permit preparation of financial statements in accordance with
        GAAP
        and (2) to maintain accountability for assets; (y) access to
        assets is
        permitted only in accordance with management’s general or specific
        authorization; and (z) the recorded accountability for assets is compared
        with the existing assets at reasonable intervals and appropriate action is
        taken
        with respect to any differences.

       

      3.06.  Absence
        of Certain Changes.
        Since
        December 31, 2004, except as reflected in the unaudited Financial Statements
        or
        in Schedule
        3.06,
        Sellers
        have conducted the Business in the ordinary course consistent with past
        practices, and there has not been any:

       

      (a)  Material
        Adverse Change or any event, occurrence, development or state of circumstances
        or facts which could reasonably be expected to result in a Material Adverse
        Change, or any condition, event or occurrence which, individually or in the
        aggregate, could reasonably be expected to prevent or materially delay a
        Seller’s ability to consummate the transactions contemplated by this Agreement
        or perform its obligations hereunder or under the Ancillary
        Agreements;

       

      (b)  payment
        or grant of any right relating to the Business by any Seller to any Interested
        Person, or any charge by any Interested Person to any Seller, or other
        transaction between any Seller and any Interested Person, except in any such
        case for employee compensation payments in the ordinary course of business
        of
        such Seller consistent with past practice;

       

      (c)  incurrence,
        assumption or guarantee by any Seller of any Indebtedness, other than the
        Bridge
        Loans;

       

      (d)  creation
        or assumption by any Seller of any Lien on any Purchased Asset, other than
        the
        Liens granted to secure the Bridge Loans;

       

      (e)  damage,
        destruction or other casualty loss (whether or not covered by insurance)
        affecting the Business or any Purchased Asset in an amount greater than
        $10,000;

       

      (f)  transaction
        or commitment made, or any contract or agreement entered into, by any Seller
        or
        with respect to any Purchased Asset (including the acquisition or disposition
        of
        any assets) or any relinquishment by any Seller of any contract or other
        right,
        in either case, material to the Business, other than transactions and
        commitments in the ordinary course of business consistent with past practices
        and those contemplated by this Agreement;

       

      
        
           

        

        
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      (g)  change
        in
        any method of Tax or financial accounting or accounting practice or any making
        of a Tax election or change of an existing election by any Seller with respect
        to the Business;

       

      (h)  (i)
        grant
        of any severance or termination pay to any employee, (ii) entering
        into (or
        extension) of any employment, deferred compensation or other similar agreement
        (or any amendment thereto) with any employee, (iii) change in benefits
        payable under existing severance or termination pay policies of any Seller
        or
        employment agreements to which any employee is a party, (iv) change
        in
        compensation, bonus or other benefits payable to employees or consultants
        of any
        Seller or (v) other change in employment terms for any of its directors,
        officers, or employees outside the ordinary course of business or entered
        into
        any transaction with any Interested Person; 

       

      (i)  labor
        dispute, other than routine individual grievances, or any activity or proceeding
        by a labor union or representative thereof to organize any employees of any
        Seller, or any lockouts, strikes, slowdowns, work stoppages or threats thereof
        by or with respect to such employees; 

       

      (j)  employee
        terminations (other than for poor performance or for cause) and/or layoffs,
        and
        Sellers have preserved intact and kept available the services of present
        employees, in each case in accordance with past practice;

       

      (k)  redemption
        or repurchase, directly or indirectly, of any shares of capital stock or
        other
        equity security or declaration, set aside or payment any dividends or any
        other
        distributions (whether in cash or in kind) with respect to any shares of
        its
        capital stock or other equity security;

       

      (l)  issuance,
        sale or transfer of any notes, bonds or other debt securities (other than
        in
        connection with the Bridge Loans), any equity securities, any securities
        convertible, exchangeable or exercisable into shares of its capital stock
        or
        other equity securities, or options or other rights to acquire shares of
        its
        capital stock or other equity securities; 

       

      (m)  discharge
        or satisfaction of any Lien or payment of any Liability (other than Liabilities
        paid in the ordinary course of business), prepayment of any amount of
        Indebtedness or the subject any portion of its properties or assets to any
        Lien;

       

      (n)  waiver,
        cancellation, compromise or release of any rights or claims of material value
        relating to the Business, whether or not in the ordinary course of
        business;

       

      (o)  entering
        into, amendment or termination of, any material Contract or entering into
        any
        other material transaction or materially changed any business practice related
        to or affecting the Business; 

       

      (p)  change
        in
        a Seller’s cash management customs and practices other than in the ordinary
        course of business (including, without limitation, with respect to maintenance
        of working capital balances and inventory levels, collection of accounts
        receivable, payment of accounts payable, accrued liabilities and other
        Liabilities and pricing and credit policies); 

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

      (q)  change
        or
        authorization to make any change in any Seller’s certificate of incorporation,
        bylaws or other governing or organizational documents; 

       

      (r)  institution
        or settlement of any claim or lawsuit or involving equitable or injunctive
        relief; or

       

      (s)  agreement,
        undertaking or commitment to do any of the foregoing.

       

      3.07.  Personal
        Property.

       

      (a)  Sellers
        have good and marketable title to, or in the case of leased or licensed personal
        property have valid leasehold or license interests in, all Personal Property,
        except for properties and assets sold since the Balance Sheet Date in the
        ordinary course of business consistent with past practices. None of such
        Personal Property is subject to any Liens, other than:

       

      (i)  Liens
        securing the Bridge Loans and the Laurus Debt;

       

      (ii)  Liens
        for
        ad valorem Taxes which shall have accrued prior to the Closing Date, but
        which
        shall not be due and payable until after the Closing Date (and for which
        adequate accruals or reserves have been established on the Closing Balance
        Sheet);

       

      (iii)  Liens
        that do not materially detract from the value of the Personal Property as
        now
        used, or materially interfere with any present or intended use of the Personal
        Property; or

       

      (iv)  Liens
        reflected in the Financial Statements.

       

      (b)  Except
        as
        disclosed in Schedule
        3.07,
        each
        item of Personal Property has no material defects, is in good operating
        condition and repair (ordinary wear and tear excepted), and is generally
        adequate for the uses to which it is being put.

       

      3.08.  Real
        Property.
        

       

      (a)  None
        of
        the Real Property is owned by Sellers. All of the Real Property is leased
        by
        Sellers as lessee or sublessee. 

       

      (b)  Schedule
        3.08(b)
        sets
        forth all leases and subleases of Real Property (the “Leases”),
        true
        and correct copies of which have been previously provided by Parent to
        Buyer.

       

      (c)  The
        Leases are valid, binding and enforceable in accordance with their respective
        terms, and there does not exist under any such Lease any default by any Seller
        or, to Sellers’ Knowledge, by any other Person, or any event that, with notice
        or lapse of time or both, would constitute a default by any Seller or, to
        Seller’s Knowledge, by any other Person. Sellers have delivered to Buyer
        complete and accurate copies of all Leases, including all amendments and
        agreements related thereto. All rent and other charges currently due and
        payable
        under the Leases have been paid. 

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

      (d)  Except
        as
        disclosed in Schedule
        3.08(d),
        Parent
        or another Seller, as applicable, is the holder of the lessee’s interest under
        the Leases and has neither assigned the Leases nor subleased all or any portion
        of the premises leased thereunder. None of Sellers and/or any of their
        Affiliates have made any alterations, additions or improvements to the premises
        leased under the Leases that are required to be removed (or of which lessor
        could require removal) at the termination of the respective Lease
        terms.

       

      3.09.  Affiliate
        Transfers; Sufficiency of Purchased Assets.

       

      (a)  As
        of the
        date of execution of this Agreement, the Affiliates of Sellers identified
        in
Schedule
        3.09
        (the
“Transferring
        Affiliates”)
        own,
        hold or use in connection with, or necessary for, the conduct and operation
        of
        the Business those Purchased Assets identified in Schedule
        3.09.
        Prior
        to Closing, such Transferring Affiliates shall have taken all requisite action
        to duly assign, transfer and deliver to ASOC all of such Purchased Assets
        such
        that ASOC will have good and marketable title in and to each of such Purchased
        Assets, free and clear of all Liens before Closing. Each such Transferring
        Affiliate has full corporate power and authority to assign, transfer and
        deliver
        such Purchased Assets to ASOC. No corporate proceedings on the part of any
        Transferring Affiliate are necessary to approve and authorize such assignment
        and transfer. The assignment, transfer and delivery of the Purchased Assets
        by
        the Transferring Affiliates to ASOC (i) require no action by or in respect
        of,
        or filing with, any governmental body, agency, official or authority, (ii)
        do
        not and will not contravene or conflict with the organizational documents
        of any
        Transferring Affiliate or any provision of any law, regulation, judgment,
        injunction, order, permit or decree binding upon or applicable to any
        Transferring Affiliate or any Purchased Asset, (iii) do not and will not
        constitute a default under or give rise to any right of termination,
        cancellation or acceleration of any right or obligation of any Transferring
        Affiliate or (iv) do not and will not result in the creation or imposition
        of
        any Lien on any Purchased Asset.

       

      (b)  The
        Purchased Assets constitute all of the rights, properties, assets and services
        owned, held or used in or necessary for the conduct or operation of the Business
        as currently conducted by Sellers and their Affiliates. The Purchased Assets
        will enable Buyer to operate the Business after the Closing in the same manner
        as operated by Sellers prior to the Closing in all material respects.
        Immediately following the Closing, none of the Sellers (or any of their
        respective Affiliates) will own, license or lease any rights, or have any
        rights
        (except as may be provided in the Transition Services Agreement) with respect
        to, any properties or assets which are owned, held or used in or necessary
        for
        the conduct of the Business as presently conducted.

       

      3.10.  Title
        to Purchased Assets.
        Upon
        consummation of the transactions contemplated hereby, Buyer will have acquired
        good and marketable title in and to, or a valid leasehold interest in, each
        of
        the Purchased Assets, free and clear of all Liens, except for:

       

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

      (a)  Liens
        for
        ad valorem Taxes which shall have accrued prior to the Closing Date, but
        which
        shall not be due and payable until after the Closing Date (and for which
        adequate accruals or reserves have been established on the Balance Sheet);
        or

       

      (b)  Liens
        that do not materially detract from the value of such Purchased Asset as
        now
        used, or materially interfere with any present or intended use of such Purchased
        Asset.

       

      3.11.  Indebtedness;
        No Undisclosed Liabilities.
        Except
        as set forth on Schedule
        3.11,
        neither
        Parent nor any Subsidiary is subject to any Indebtedness. Schedule
        3.11
        details
        the outstanding balance (including accrued and unpaid interest) for each
        such
        outstanding item of Indebtedness. Except as disclosed in the Financial
        Statements or set forth in Schedule
        3.11,
        there
        are no Liabilities of Sellers relating in any way to the Business of any
        kind
        whatsoever, whether accrued, contingent, absolute, determined, determinable
        or
        otherwise, and there is no existing condition, situation or set of circumstances
        which could reasonably be expected to result in such a Liability, other than
        (a) Liabilities incurred in the ordinary course of operating the Business
        consistent with past practices since the Balance Sheet Date, none of which
        is
        material to the Business or to any Seller, (b) Liabilities arising in the
        ordinary course of business consistent with past practice for future performance
        under agreements, contracts, leases or commitments disclosed in this Agreement
        or in a Schedule hereto (none of which relates to any breach of contract,
        breach
        of warranty, tort, injury caused to another, infringement, indemnification,
        lawsuit or violation of law and none of which is material to the Business
        or to
        any Seller), and (c) those Liabilities incurred in connection with Sellers’
        performance of their obligations under this Agreement.

       

      3.12.  Litigation;
        Proceedings.
        Except
        as disclosed in Schedule
        3.12,
        there
        is no claim, action, suit, investigation or proceeding (or any basis therefor)
        pending against, or to Sellers’ Knowledge, threatened against or affecting, any
        Seller, any Affiliate of Sellers (to the extent material to the Business
        or any
        Purchased Asset), the Business or any Purchased Asset, or the transactions
        contemplated hereby before any court or arbitrator or any governmental body,
        agency, official or authority. Except as set forth on Schedule
        3.12,
        no
        Seller and no Affiliate of any Seller is subject to any outstanding order,
        judgment or decree issued by any court or quasi-judicial or administrative
        agency of any federal, state, local or foreign jurisdiction or any arbitrator
        relating in any way to the Business.

       

      3.13.  Material
        Contracts.

       

      (a)  Schedule 3.13
        sets
        forth the following contracts, agreements, leases or other contractual
        arrangements which pertain to, or are used or held in connection with, or
        are
        necessary for, the operation of the Business and to which any of the Sellers
        or
        their Affiliates is a party or by which any of the Sellers or their Affiliates
        or any of their respective assets is bound:

       

      (i)  all
        leases of Real Property and Personal Property;

       

      (ii)  all
        contracts for the purchase of materials, supplies, goods, services, equipment
        or
        other assets providing for annual payments by any Seller or any Affiliate
        of any
        Seller, or pursuant to which in the last year any Seller or any Affiliate
        of any
        Seller paid, in the aggregate $10,000 or more;

       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

      (iii)  all
        sales, distribution or other similar agreements providing for the sale by
        any
        Seller or any Affiliate of any Seller of materials, supplies, goods, services,
        equipment or other assets that provide for annual payments to any Seller
        or any
        Affiliate of any Seller of, or pursuant to which in the last year any Seller
        or
        any Affiliate of any Seller received, in the aggregate $10,000 or
        more;

       

      (iv)  all
        partnership, joint venture or other similar contract arrangements or
        agreements;

       

      (v)  all
        contracts relating to indebtedness for borrowed money or the deferred purchase
        price of property (whether incurred, assumed, guaranteed or secured by any
        asset), except contracts relating to indebtedness incurred in the ordinary
        course of business in an amount not exceeding $10,000;

       

      (vi)  all
        employment, consulting, severance or change of control agreements;

       

      (vii)  all
        license, assignment, technology transfer, development, franchise, escrow
        or
        other agreements in respect of any Intellectual Property or other property
        developed by or for, or owned or used by any Seller or any Affiliate of any
        Seller in connection with or necessary for the operation of the
        Business;

       

      (viii)  all
        agency, dealer, sales representative or other similar agreements;

       

      (ix)  all
        contracts or other documents that limit the freedom of any Seller or any
        Affiliate of any Seller to compete in any line of the Business or with any
        Person or in any area to own, operate, sell, transfer, pledge or otherwise
        dispose of or encumber any Purchased Asset and that would so limit the freedom
        of Buyer after the Closing Date;

       

      (x)  all
        contracts or commitments with or for the benefit of any Interested
        Person;

       

      (xi)  all
        collective bargaining agreements or contracts with any labor union, all bonus,
        commission, pension, profit sharing, retirement or any other form of deferred
        compensation or incentive plans and all stock purchase, stock option,
        hospitalization, insurance or similar plans or practices, whether formal
        or
        informal;

       

      (xii)  all
        contracts with respect to the lending or investing of funds;

       

      (xiii)  all
        guaranties of any obligation, other than endorsements made for
        collection;

       

      (xiv)  all
        powers of attorney;

       

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

      (xv)  all
        contracts relating to the acquisition or sale of any Purchased Assets since
        December 31, 2004; or

       

      (xvi)  all
        other
        contracts or commitments not made in the ordinary course of business that
        is
        material to the Business taken as a whole.

       

      (b)  Parent
        has delivered to Buyer true and correct copies of each Contract disclosed
        on any
        Schedule of this Agreement. Each Contract disclosed in any Schedule to this
        Agreement or required to be disclosed pursuant to Section 3.13(a)
        is a
        valid and binding agreement of each Seller or each Affiliate of a Seller
        who is
        a party thereto and is in full force and effect, and except as set forth
        in
Schedule
        3.13(b)
        no
        Seller or any Affiliate of a Seller nor, to Sellers’ Knowledge, any other party
        thereto is in default in any material respect under the terms of any such
        Contract, nor, to Sellers’ Knowledge, has any event or circumstance occurred
        that, with notice or lapse of time or both, would constitute an event of
        default
        thereunder.

       

      3.14.  Technology
        and Intellectual Property.

       

      (a)  Schedule
        3.14(a)
        accurately lists in each case to the extent owned, held or used in, or necessary
        for, the Business: (i) all Intellectual Property (other than Intellectual
        Property licensed from third parties) that is registered, filed, or issued
        under
        the authority of any governmental or administrative body, including all patents,
        registered copyrights, registered mask works, and registered trademarks,
        domain
        names, and all applications for any of the foregoing (“Registered
        IP”)
        in
        each case indicating the applicable jurisdiction, registration number (or
        application number) and the date issued (or date filed); (ii) all hardware
        products and tools, software and firmware products and tools and services
        developed, sold, published, offered, or under development by Sellers or any
        of
        their Affiliates; and (iii) all licenses (in and out), sublicenses and other
        agreements to which any Seller or any of their Affiliates is a party and
        pursuant to which any Seller or any other Person is authorized to use any
        Intellectual Property or exercise any other right with regard thereto, including
        the dates of, and identities of the parties to, the relevant agreements.
        The
        disclosures described in clause (i) of the preceding sentence include an
        identification of each product or service (identified in clause (ii) of the
        preceding sentence) that embodies, utilizes, or is based upon or derived
        from
        (or, with respect to products and services under development, that is expected
        to embody, utilize, or be based upon or derived from) such item of Registered
        IP. 

       

      (b)  Except
        as
        set forth in Schedule
        3.14(b),
        each
        item of Sellers’ Intellectual Property owned, held or used in, or necessary for,
        the operation of the Business (the “Business
        Intellectual Property”)
        is
        either: (i) owned solely by a Seller free and clear of any Liens; or (ii)
        rightfully used and authorized for use by a Seller and its successors pursuant
        to a valid and enforceable written license. No Seller has assigned or otherwise
        transferred ownership of, or agreed to assign or otherwise transfer ownership
        of, any Business Intellectual Property to any other Person, except as set
        forth
        in Schedule
        3.14(b).
        All of
        Sellers’ Business Intellectual Property that is used by a Seller pursuant to a
        license or other grant of a right by a third party to use its proprietary
        information is separately identified as such under Schedule
        3.14(b).
        Each
        Seller has all rights in its Business Intellectual Property necessary to
        carry
        out its current and currently planned future activities relating to the
        Business, including without limitation (except as noted on Schedule
        3.14(b)
        rights
        to make, use, exclude others from using, reproduce, modify, adapt, create
        derivative works based on, translate, distribute (directly and indirectly),
        transmit, display and perform publicly, license, rent, lease, assign and
        sell
        its Business Intellectual Property in all pertinent geographic locations
        and
        fields of use, and to sublicense any or all rights to third parties, including
        the right to grant further sublicenses as necessary to carry out its activities
        to the Business.

       

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

      (c)  Sellers
        have provided to Buyer complete and accurate copies of all applications and
        other material documents related to each item of Registered IP. Each item
        of
        Registered IP has not been abandoned or finally rejected and is and at all
        times
        has been in compliance in all material respects with all legal requirements
        and
        all filings, payments and other actions required to be made or taken to maintain
        such Registered IP in full force and effect have been made by the applicable
        deadline. To Sellers’ Knowledge, each U.S. patent application and U.S. patent
        related to the Business in which a Seller has or purports to have an ownership
        interest was filed within one year of any printed publication, public use
        or
        offer for sale of each invention claimed in such U.S. patent application
        or U.S.
        patent. To Sellers’ Knowledge, each international and/or foreign patent
        application and foreign patent related to the Business in which a Seller
        has or
        purports to have an ownership interest was filed or claims priority to a
        patent
        application filed prior to each invention claimed in such patent application
        being made available to the public. Each inventor of each patent and patent
        application that is Registered IP has executed a valid and enforceable written
        assignment transferring the inventor’s rights in such patent or patent
        application to Parent or a Subsidiary.

       

      (d)  Except
        as
        set forth in Schedule
        3.14(d)
        no
        Seller is in violation of any license, sublicense or other agreement to which
        it
        is a party or otherwise bound relating to any of Sellers’ Business Intellectual
        Property. Except as noted in Schedule
        3.14(d),
        no
        Seller nor any of its Affiliates is obligated to provide any consideration
        (whether financial or otherwise) to any third party, nor is any third party
        otherwise entitled to any consideration, with respect to any exercise of
        rights
        by any Seller or Buyer, as successor to Sellers, in Sellers’ Business
        Intellectual Property.

       

      (e)  To
        Seller’s Knowledge, no Seller has ever infringed or misappropriated, in
        connection with the operation of the Business, any other Person’s patent,
        trademark, service mark, trade name, firm name, logo, trade dress, mask work,
        copyright, trade secret rights, right of privacy, right in personal data,
        moral
        right or other intellectual property right. Except as set forth in Schedule 3.14(e),
        no
        claims (i) challenging the validity, enforceability, effectiveness or ownership
        by any Seller of any of Sellers’ Business Intellectual Property or (ii) to the
        effect that the use, reproduction, modification, manufacture, distribution,
        licensing, sublicensing, sale or any other exercise of rights in any of Sellers’
        Business Intellectual Property by any Seller, infringes or will infringe
        on any
        intellectual property or other proprietary or personal right of any Person
        have
        been asserted against any Seller or, to Seller’s Knowledge, are threatened by
        any Person nor does there exist any basis for such a claim. There are no
        legal
        or governmental proceedings, including interference, re-examination, reissue,
        opposition, nullity, or cancellation proceedings pending that relate to any
        of
        Sellers’ Business Intellectual Property, other than review of pending patent
        applications, and no Seller is aware of any information indicating that such
        proceedings are threatened or contemplated by any governmental entity or
        any
        other Person. All granted or issued patents and mask works, all registered
        trademarks and service marks, and all copyright registrations owned by a
        Seller
        and used or held for use in, or necessary for, the operation of the Business
        are
        valid, enforceable and subsisting. Except as set forth in Schedule
        3.14(e),
        to
        Sellers’ Knowledge, there has been no unauthorized use, infringement, or
        misappropriation of any of Sellers’ Business Intellectual Property by any third
        party, employee or former employee. Except as set forth in Schedule
        3.14(e),
        no
        Seller is bound by any agreement to indemnify, defend, hold harmless or
        reimburse any other Person with respect to any Intellectual Property
        infringement, misappropriation or similar claim.

       

      
        
           

        

        
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      (f)  Schedule
        3.14(f)
        separately lists all parties (other than employees) who have created any
        portion
        of, or otherwise have any rights in or to, Sellers’ Business Intellectual
        Property. Sellers have secured from all Persons (including employees) who
        were
        involved in the creation or development of any portion of, or otherwise have
        any
        rights in or to, Sellers’ Business Intellectual Property, valid and enforceable
        written agreements containing an assignment of Intellectual Property rights
        and
        confidentiality provisions protecting Sellers’ Business Intellectual Property,
        and have provided true and complete copies of such assignments to Buyer.
        No
        funding, facilities or personnel of any governmental body or any educational
        institution were used, directly or indirectly, to develop or create, in whole
        or
        in part any Seller Business Intellectual Property. No Seller is or was a
        member
        or promoter of, or a contributor to, any industry standards body or similar
        organization that could require or obligate any Seller to grant or offer
        to any
        other Person any license or right to any Business Intellectual
        Property.

       

      (g)  Except
        as
        set forth in Schedule
        3.14(g),
        upon
        consummation of the transactions contemplated under this Agreement, Buyer
        shall
        acquire all rights of Sellers in the Business Intellectual Property, which
        rights shall not be diminished, impaired or otherwise adversely affected
        as a
        result of the transactions contemplated by this Agreement, nor will such
        transactions, with or without notice or lapse of time, result in, or give
        any
        other Person the right or option to cause or declare (i) a loss of, or
        encumbrance on, any of Sellers’ Business Intellectual Property; (ii) a breach of
        any license agreement listed or required to be listed on a Schedule; (iii)
        the
        release, disclosure, or delivery of any Business Intellectual Property by
        or to
        any escrow agent or other Person; or (iv) the grant, assignment, or transfer
        to
        any other Person of any license or other right or interest under, to, or
        in any
        of Sellers’ Business Intellectual Property.

       

      (h)  Sellers
        have taken all measures necessary in accordance with industry practices and
        applicable legal standards, to (i) protect the proprietary nature of the
        Business Intellectual Property and (ii) maintain in confidence all trade
        secrets
        and confidential information owned, used or held by any Seller in connection
        with, or necessary for, the operation of the Business (“Trade
        Secrets”),
        including requiring its current and former personnel, including employees,
        agents (other than counsel), consultants and contractors, having access thereto,
        to execute written nondisclosure agreements. To Sellers’ Knowledge, no Trade
        Secret has been disclosed or authorized to be disclosed to any third party
        other
        than pursuant to a nondisclosure agreement that protects Sellers’ proprietary
        interests in and to such Trade Secrets. No Seller, nor to Sellers’ Knowledge,
        any other Person party to any nondisclosure agreement relating to any Trade
        Secrets is in breach of default thereof.

       

      (i)  Each
        Seller’s products of the Business contains all notices, disclaimers and
        attributions necessary to comply with the obligations set forth in the contracts
        described in the Schedules including without limitation Publicly Available
        Software. Except as set forth in Schedule
        3.14(i),
        Sellers’ Business Intellectual Property does not include any Publicly Available
        Software and no Seller has used Publicly Available Software in whole or in
        part
        in the development of any part of their Business Intellectual Property in
        a
        manner that may subject their Business Intellectual Property in whole or
        in
        part, to all or part of the license obligations of any Publicly Available
        Software. “Publicly
        Available Software”
        means
        each of (i) any software that contains, or is derived in any manner (in whole
        or
        in part) from, any software that is distributed as free software, open source
        software (e.g. Linux), or similar licensing and distribution models; and
        (ii)
        any software that requires as a condition of use, modification, and/or
        distribution of such software that such software or other software incorporated
        into, derived from, or distributed with such software (a) be disclosed or
        distributed in source code form, (b) be licensed for the purpose of making
        derivative works or (c) be redistributable at no or minimal charge. Publicly
        Available Software includes, without limitation, software licensed or
        distributed under any of the following licenses or distribution models similar
        to any of the following: (a) GNU General Public License (GPL) or Lesser/Library
        GPL (LGPL), (b) the Artistic License (e.g. PERL), (c) the Mozilla Public
        License, (d) the Netscape Public License, (e) the Sun Community Source License
        (SCSL), the Sun Industry Source License (SISL) and the Apache Server
        License.

       

      
        
           

        

        
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      (j)  Except
        as
        set forth in Schedule
        3.14(j),
        none of
        the software (including firmware and other software embedded in hardware
        devices) owned, developed (or currently being developed), used, marketed,
        distributed, licensed or sold by any Seller in connection with the Business
        (other than non-customized third-party software licensed to Parent or Subsidiary
        for internal use on a non-exclusive basis) (collectively, “Seller
        Software”)
        (a)
        contains any bug, defect or error (including any bug, defect or error relating
        to or resulting from the display, manipulation, processing, storage,
        transmission or use of date data) that materially and adversely affects the
        use,
        functionality or performance of such Seller Software or any product or system
        containing or used in conjunction with such Seller Software; or (b) fails
        to
        comply with any applicable warranty or other contractual commitment relating
        to
        the use, functionality or performance of such Seller Software or any product
        or
        system containing or used in conjunction with such Seller Software. Sellers
        have
        provided to Buyer a complete and accurate list of all known bugs, defects
        and
        errors in each version and component of the Seller Software. 

       

      (k)  Except
        as
        set forth in Schedule
        3.14(k),
        no
        Seller Software contains any “back door,”“drop dead device,”“time bomb,”“Trojan horse,”“virus,” or “worm” (as such terms are commonly understood in the
        software industry) or any other code designed or intended to have, or capable
        of
        performing, any of the following functions: (i) disrupting, disabling, harming
        or otherwise impeding in any manner the operation of, or providing unauthorized
        access to, a computer system or network or other device on which such code
        is
        stored or installed; or (ii) damaging or destroying any data or file without
        the
        user’s consent.

       

      (l)  Except
        as
        set forth in Schedule
        3.14(l),
        no
        source code for any Seller Software has been delivered, licensed or made
        available to any escrow agent. Except as set forth in Schedule
        3.14(l),
        no
        Seller has any duty or obligation (whether present, contingent or otherwise)
        to
        deliver, license, or make available the source code for any Seller Software
        to
        any escrow agent. No event has occurred, and no circumstance or condition
        exists, that (with or without notice or lapse of time) will, or could reasonably
        be expected to, result in the delivery, license, or disclosure of the source
        code for any Seller Software to any other Person.

       

      
        
           

        

        
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      3.15.  Insurance
        Coverage.
        Schedule
        3.15
        lists
        all of the insurance policies and fidelity bonds of the Sellers covering
        the
        Purchased Assets and/or the Business. Parent has furnished to Buyer true
        and
        complete copies of all insurance policies and fidelity bonds listed in
Schedule
        3.15.
        There
        is no claim by any Seller pending under any of such policies or bonds as
        to
        which coverage has been questioned, denied or disputed by the underwriters
        of
        such policies or bonds. All premiums payable under all such policies and
        bonds
        have been paid and each Seller is otherwise in full compliance with the terms
        and conditions of all such policies and bonds. Such policies of insurance
        and
        bonds remain in full force and effect. Such policies of insurance and bonds
        are
        of the type and in amounts customarily carried by Persons conducting businesses
        similar to the Business. No Seller knows of any threatened termination of,
        or
        premium increase with respect to, any of such policies or bonds.

       

      3.16.  Compliance
        with Laws.

       

      (a)  Sellers,
        and Affiliates of Sellers to the extent material to the Business or the
        Purchased Assets, are not in violation of, and have not violated, in any
        material respect any applicable provisions of any laws, statutes, ordinances
        or
        regulations and, to Sellers’ Knowledge, are not under investigation with respect
        to and have not been threatened to be charged with or given notice of any
        violation of, any law, rule, ordinance or regulation applicable to the Purchased
        Assets or the conduct of the Business.

       

      (b)  Schedule 3.16(b)
        correctly describes each governmental license, permit, concession or franchise
        (a “Permit”)
        material to the Business, together with the name of the governmental agency
        or
        entity issuing such Permit. Except as set forth on Schedule
        3.16(b),
        such
        Permits are valid and in full force and effect and, assuming the related
        Required Consents have been obtained prior to the Closing Date, are transferable
        by Sellers and will not be terminated or impaired or become terminable as
        a
        result of the transactions contemplated hereby. Upon consummation of such
        transactions, Buyer will, assuming the related Required Consents have been
        obtained prior to the Closing Date, have all of the right, title and interest
        in
        all the Permits.

       

      (c)  No
        Seller
        is in default under, and no condition exists that with notice or lapse of
        time
        or both would constitute a default under, any judgment, order or injunction
        of
        any court, arbitrator or governmental body, agency, official or
        authority.

       

      3.17.  Employees.

       

      (a)  Parent
        has provided Buyer with respect to each employee of the Business (including
        any
        such employee of Parent or a Subsidiary who is on a leave of absence or on
        layoff status subject to recall) a list detailing (i) the name of
        such
        employee, and whether the employee is on an active or inactive status;
        (ii) such employee’s title; (iii) such employee’s annual compensation
        rate as of the date of this Agreement, including base salary or hourly wage
        as
        applicable, vacation and/or paid time off accrual amounts, bonus and/or
        commission potential severance pay, and any other compensation amounts;
        (iv) each current benefit plan in which such employee participates;
        and
        (v) any governmental authorization that is held by such employee and
        that
        is used in connection with the Business. Except as disclosed in Schedule
        3.17(a),
        the
        employment of Sellers’ employees is terminable by Parent or a Subsidiary at
        will.

       

      
        
           

        

        
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      (b)  Schedule
        3.17(b)
        lists
        all Persons who are currently performing services to the Business for a Seller
        who are classified as “consultants” or “independent contractors,” the
        compensation of each such Person and whether any Seller is party to an agreement
        with such Person (whether or not in writing). Any such agreements are listed
        on
Schedule
        3.13 and
        have
        been delivered (or, in the case of agreements that are not in writing, a
        summary
        thereof has been delivered) to Buyer.

       

      (c)  Sellers
        are not and have not been during the past 5 years a party to or bound by
        any
        union contract, collective bargaining agreement or other contractual
        relationship with a labor organization. There has never been during the past
        5
        years any slowdown, work stoppage, labor dispute or union organizing activity,
        or any similar activity or dispute, affecting any Seller or any of their
        employees.

       

      (d)  Schedule
        3.17(d)
        lists
        all current employee manuals and handbooks, employment agreements, and other
        materials relating to the employment of the current employees of the Business.
        Parent has delivered to Buyer complete copies of all such
        documents.

       

      (e)  Except
        as
        disclosed in Schedule
        3.17(e),
        (i) none of the employees of the Business have notified or otherwise
        indicated to any Seller that he or she intends to terminate his or her
        employment with any Seller, or not to accept employment with Buyer; (ii)
        no
        Seller has a present intention to terminate the employment of any of their
        employees except as contemplated herein; (iii) to Sellers’ Knowledge, none
        of their employees has since March 31, 2005 received an offer of employment
        from
        any other Person (other than Buyer in connection with the transaction
        contemplated hereby); (iv) all employees of the Business have executed
        Parent’s form of inventions assignment, and nondisclosure agreement; (v) to
        Sellers’ Knowledge, no employee of the Business is a party to or is bound by any
        employment contract, patent disclosure agreement, noncompetition agreement
        or
        other restrictive covenant or other contract with any third party that would
        be
        likely to affect in any way (A) the performance by such employee of
        any of
        his or her duties or responsibilities as a employee, or (B) the Business
        or
        operations of the Business; (vi) to the Knowledge of Sellers, none of their
        employees is in violation of any term of any employment contract, patent
        disclosure agreement, noncompetition agreement, or any other restrictive
        covenant with any third party relating to the right of any such employee
        to be
        employed by Parent or any Subsidiary; and (vii) Sellers are not and never
        have
        been engaged in any dispute or litigation with any of their employees or
        former
        employee regarding Business Intellectual Property matters. Parent has delivered
        to Buyer complete copies of all nondisclosure and developments agreements
        executed by current and former employees and consultants of the
        Business.

       

      (f)  Except
        as
        disclosed in Schedule
        3.17(f),
        (i) no Seller has an established severance pay practice or policy;
        and (ii)
        no employee of any Seller is entitled to any severance pay, bonus compensation,
        acceleration of payment or vesting of any equity interest, or other payment
        from
        Sellers or Buyer (other than accrued salary, vacation, or other paid time
        off in
        accordance with the policies of Sellers) as a result of or in connection
        with
        the transactions contemplated by this Agreement or any Ancillary Agreement
        or as
        a result of any termination by any Seller on or after the Closing of any
        Person
        employed by Sellers on or prior to the Closing Date. 

       

      
        
           

        

        
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      (g)  To
        Sellers’ Knowledge there are no pending claims, complaints, discrimination
        charges, unfair labor practice charges, civil or criminal proceedings, or
        investigations or audits by any federal or state administrative agencies
        under
        any laws or regulations relating to employment and labor, including laws
        and
        regulations regulating wages, salaries, commissions, bonuses, benefits, hours,
        vacation, overtime, notice, pay in lieu of notice, compensation for services,
        reimbursement of expenses, termination and severance pay obligations, human
        rights, occupational health and safety, equal opportunity, collective
        bargaining, the payment of social security and other Taxes, the Worker
        Adjustment and Retraining Notification Act, the Immigration Reform and Control
        Act of 1986, and visa and work permit requirements.

       

      (h)  Schedule
        3.17(h)
        lists
        all visas and work permits held by employees of the Business that will expire
        during the six month period following the date of this Agreement.

       

      3.18.  Environmental
        Compliance.

       

      (a)  Environmental
        Definitions.
        The
        following terms, as used herein, have the following meanings:

       

      “Environment”
        means
        any and all environmental media, including, without limitation, ambient air,
        surface water, ground water, drinking water supply, land surface or subsurface,
        soil or strata, and also means any indoor location.

       

      “Environmental
        Law”
        means
        any and all federal, state, local and foreign statutes, laws (including common
        or case law), regulations, ordinances, rules, judgments, judicial decisions,
        orders, decrees, codes, plans, injunctions, Environmental Permits, or
        governmental restrictions relating to the protection of human health or safety
        or the Environment or to emissions, discharges or Releases of any Hazardous
        Substance into the Environment, or otherwise relating to the manufacture,
        processing, distribution, use, treatment, storage, disposal, transport or
        handling of any Hazardous Substance or the containment, removal or remediation
        thereof.

       

      “Environmental
        Liabilities”
        means
        any and all Liabilities arising in connection with or in any way relating
        to the
        past or present operations of any Seller, whether contingent or fixed, actual
        or
        potential, known or unknown, which (i) arise under or relate to matters
        governed by Environmental Law or arise in connection with or relate to any
        matter disclosed or required to be disclosed in Schedule
        3.18
        and
        (ii) arise from or relate in any way to actions occurring or conditions
        existing before the Closing Date.

       

      “Environmental
        Permits”
        means
        any and all governmental permits, licenses, concessions, grants, franchises,
        agreements, authorizations, registrations or other governmental approvals
        or
        filings issued or required under any Environmental Law.

       

      “Hazardous
        Substance”
        means
        any and all pollutants and contaminants, and any and all toxic, caustic,
        radioactive or otherwise hazardous materials, substances or wastes that are
        regulated under any Environmental Law, and includes, without limitation,
        petroleum and its derivatives and by-products, and any other
        hydrocarbons.

       

      
        
           

        

        
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      “Release”
        means
        any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
        injecting, escaping, leaching, dumping or disposing into the Environment
        (including, without limitation, the abandonment or discarding of barrels,
        containers and other closed receptacles containing any Hazardous
        Substance).

       

      (b)  Environmental
        Representations and Warranties.

       

      (i)  Sellers
        have complied in all material respects with all Environmental Laws and
        Environmental Permits. To Sellers’ Knowledge, Sellers have no Environmental
        Liabilities.

       

      (ii)  Parent
        and Subsidiary have applied for and received all Environmental Permits required
        in connection with the Business. Schedule 3.18(b)
        sets
        forth a list of all such Environmental Permits, each of which is in full
        force
        and effect. To Seller’s Knowledge, no suspension or cancellation is threatened
        and there is no basis for believing that any such Environmental Permit will
        not
        be renewable upon expiration. Except as set forth in Schedule 3.18(b),
        each
        such Environmental Permit will continue to be in full force and effect
        immediately following the Closing in accordance with the terms thereof as
        in
        effect immediately prior to the Closing, and the consummation of the
        transactions contemplated herein will not conflict with, result in a violation
        or breach of or constitute a default under any such Environmental Permit.
        The
        consummation of the transactions contemplated herein will not require any
        filing, notice or compliance under any environmental property transfer laws
        and
        no transfer of any Environmental Permits will be required.

       

      (iii)  No
        notice, notification, demand, request for information, citation, summons
        or
        order has been issued, no complaint has been filed, no penalty has been assessed
        and no investigation or review is pending or, to Sellers’ Knowledge, threatened,
        by any governmental or other entity with respect to any (A) alleged
        violation by any Seller of any Environmental Law, or any liability thereunder,
        (B) alleged failure by any Seller to have any Environmental Permit,
        or
        (C) use, generation, treatment, storage, handling, recycling,
        transportation or disposal of any Hazardous Substance by any
        Seller.

       

      (iv)  Sellers
        have not stored, handled, transported or Released any Hazardous Substance
        on any
        property now or previously owned or leased by any Seller. No Hazardous Substance
        is present, in a reportable or threshold planning quantity, where such a
        quantity has been established by any Environmental Law or Environmental Permit,
        at, on or under any property now or previously owned or leased by
        Sellers.

       

      (v)  There
        have been no environmental investigations, studies, audits, tests, reviews
        or
        other analyses conducted by or for any Seller, or of which any Seller has
        Knowledge, relating to any property or facility now or previously owned or
        leased by any Seller that have not been delivered to Buyer.

       

      3.19.  Customers
        and Suppliers.
        No
        Seller has received notice from and is not otherwise aware that (a) any customer
        (or group of customers under common ownership or control) that accounted
        for
        five percent or more of the aggregate products and services furnished by
        Sellers
        and their Affiliates in connection with the Business during the past 12 months
        has stopped or intends to stop purchasing the products or services of the
        Business or (b) any supplier (or group of suppliers under common ownership
        or
        control) that accounted for five percent or more of the aggregate supplies
        purchased by Sellers and their Affiliates in connection with the Business
        during
        the past 12 months has stopped or intends to stop supplying products or services
        to the Business.

       

      
        
           

        

        
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      3.20.  Products.
        Each of
        the products produced or sold by any Seller in connection with the Business
        (a) is, and at all times has been, in compliance in all material respects
        with all applicable federal, state, local and foreign laws and regulations
        and
        (b) is, and at all relevant times has been, fit for the ordinary purposes
        for which it is intended to be used and conforms in all material respects
        to any
        promises or affirmation of fact made on the container, label or documentation
        for such products or in connection with its sale. There is no design defect
        with
        respect to any of such products, and each of such products contains adequate
        warnings, presented in a reasonably prominent manner, in accordance with
        applicable laws and current industry practice with respect to its contents
        and
        use. 

       

      3.21.  Accounts
        Receivable.
        All
        Accounts Receivable of Sellers relating to the Business at the Balance Sheet
        Date have been included in the Business Balance Sheet. All Accounts Receivable
        (other than receivables collected since the Balance Sheet Date) reflected
        on the
        Business Balance Sheet represent, and all Accounts Receivable relating to
        the
        Business at the Closing Date will represent, valid obligations arising from
        sales actually made or services actually performed by the Business, and except
        as set forth in Schedule
        3.21,
        are (or
        will be) fully collectible within 60 days in the aggregate amount thereof,
        are
        not (or will not be) subject to any defenses, offsets or counterclaims, subject
        to normal and customary trade discounts, less any reserves for doubtful accounts
        recorded on the Business Balance Sheet. 

       

      3.22.  Inventories.
        The
        inventories set forth in the Business Balance Sheet were, and the inventories
        set forth in the Closing Balance Sheet will be, properly stated therein at
        the
        lesser of cost or fair market value determined in accordance with GAAP
        consistently applied by Parent. Since the Balance Sheet Date, the inventories
        of
        Sellers relating to the Business have been maintained in the ordinary course
        of
        business. All such inventory is owned free and clear of all Liens except
        for
        Liens securing the Bridge Loans and the Laurus Debt, Liens for ad valorem
        Taxes
        which shall have accrued prior to the Closing Date, but which shall not be
        due
        and payable until after the Closing Date (and for which adequate accruals
        or
        reserves have been established on the Business Balance Sheet), Liens that
        do not
        materially detract from the value of the Inventories or as reflected in the
        Financial Statements. All of the inventory recorded on the Business Balance
        Sheet consists of, and all inventory of the Business on the Closing Date
        will
        consist of, items of a quality usable or saleable within 60 days in the ordinary
        course of business consistent with past practices and are and will be in
        quantities sufficient for the normal operation of the Business in accordance
        with past practice. Except as set forth in Schedule
        3.22,
        none of
        the Sellers has any products related to the Business placed with its customers
        under an understanding permitting their return to any Seller other than pursuant
        to a breach of warranty.

       

      3.23.  Transactions
        with Affiliates; Intercompany Arrangements.
        Except
        as set forth in Schedule
        3.23,
        (and
        except for indemnification agreements, offer letters, employment related
        inventions agreements and agreements with respect to the sale of the Parent’s
        securities with respect to the Persons identified in clause (a)) there are
        no
        agreements, loans, leases, royalty agreements or other continuing transactions
        in any way relating to the Business between any Seller and (a) any officer,
        director or five percent or greater stockholder of any Seller or any of their
        Affiliates or (b) any family member of any officer, director or such stockholder
        of any Seller or any of their Affiliates (“Interested
        Person”).
        To
        the Knowledge of Sellers, no Interested Person (x) has any material
        direct
        or indirect interest in any entity that does business with any Seller that
        relates in any way to the Business or (y) has any direct or indirect
        interest in any property, asset or right that is used by any Seller in the
        conduct of the Business. No Interested Person has any contractual relationship
        (including that of creditor or debtor) with any Seller other than such
        relationships as result solely from being an officer, director or stockholder
        of
        a Seller.

       

      
        
           

        

        
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      3.24.  Finders’
        Fees.
        Except
        for Blitzer Clancy & Co. (whose fees and commissions are the sole
        responsibility of Parent) there is no investment banker, broker, finder or
        other
        intermediary that has been retained by or is authorized to act on behalf
        of any
        Seller who might be entitled to any fee or commission from Buyer, any Seller
        or
        any of their respective Affiliates upon consummation of the transactions
        contemplated by this Agreement.

       

      3.25.  No
        Equity Participation Obligations.
        No
        Seller, nor any of Sellers’ Affiliates, is party to any agreement, instrument,
        documents or arrangement, or is otherwise subject to any obligation, that
        would
        in any manner require Buyer to issue, grant or agree to issue or grant, any
        interest in any debt or equity securities of Buyer or any Affiliate of Buyer,
        to
        any third party in connection with the transactions contemplated by this
        Agreement.

       

      3.26.  Other
        Information.
        None of
        this Agreement, the Ancillary Agreements and the schedules and exhibits
        delivered in connection herewith and therewith, when read together as a whole,
        contains any untrue statement of a material fact or omits to state a material
        fact necessary in order to make the statements contained therein not misleading.
        The budget relating to the Business delivered to Buyer has been prepared
        in good
        faith based on assumptions that management of Parent believe are reasonable,
        and
        Sellers are not aware of any fact or information that would lead them to
        believe
        that such budget is incorrect or misleading in any material
        respect.

       

      ARTICLE
        IV

       

      REPRESENTATIONS
        AND WARRANTIES OF BUYER

       

      Buyer
        hereby represents and warrants to Sellers that:

       

      4.01.  Organization
        and Existence.
        Buyer
        is a corporation duly incorporated, validly existing and in good standing
        under
        the laws of the State of Delaware and has all corporate powers and all material
        governmental licenses, authorizations, consents and approvals required to
        carry
        on its business as now conducted.

       

      4.02.  Corporate
        Authorization.
        The
        execution, delivery and performance by Buyer of this Agreement, each of the
        Ancillary Agreements and the consummation by Buyer of the transactions
        contemplated hereby and thereby are within the corporate powers of Buyer
        and,
        except for any required approval by Buyer’s stockholders, have been duly
        authorized by all necessary corporate action on the part of Buyer. This
        Agreement and each of the Ancillary Agreements to which Buyer is a party
        have
        been duly executed and delivered by Buyer and constitute valid and binding
        agreements of Buyer.

       

      
        
           

        

        
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      4.03.  Governmental
        Authorization.
        The
        execution, delivery and performance by Buyer of this Agreement and each of
        the
        Ancillary Agreements require no action by or in respect of, or filing with,
        any
        governmental body, agency, official or authority.

       

      4.04.  Non-Contravention.
        The
        execution, delivery and performance by Buyer of this Agreement and each of
        the
        Ancillary Agreements and the consummation by Buyer of the transactions
        contemplated hereby and thereby do not and will not (a) contravene
        or
        conflict with the corporate charter or bylaws of Buyer or (b) assuming
        compliance with the matters referred to in Section 4.03, contravene
        or
        conflict with any provision of any law, regulation, judgment, injunction,
        order
        or decree binding upon or applicable to Buyer.

       

      4.05.  Litigation.
        There
        is no action, suit, investigation or proceeding pending against, or to the
        knowledge of Buyer threatened against or affecting Buyer before any court
        or
        arbitrator or any governmental body, agency or official which in any manner
        challenges or seeks to prevent, enjoin, alter or materially delay the
        transactions contemplated hereby.

       

      4.06.  Finders’
        Fees.
        There
        is no investment banker, broker, finder or other intermediary that has been
        retained by or is authorized to act on behalf of Buyer who might be entitled
        to
        any fee or commission from any Seller or any of their Affiliates upon
        consummation of the transactions contemplated by this Agreement.

       

      ARTICLE
        V

       

      COVENANTS
        OF SELLERS

       

      5.01.  Conduct
        of the Business.
        From
        the date hereof until the Closing Date, except as expressly contemplated
        by this
        Agreement, each Seller:

       

      (a)  Shall,
        and shall cause each of its Affiliates to, conduct the Business in the ordinary
        course consistent with past practices and in compliance in all material respects
        with all applicable laws and regulations and to use its commercially reasonable
        efforts to (i) preserve intact its business organizations and goodwill
        associated with the Business, (ii) keep available the services of its officers
        and employees, and (iii) preserve the relationships with those Persons having
        business dealing with Seller to the end that Seller’s goodwill and ongoing
        Business shall be unimpaired at the Closing; in connection therewith, no
        Seller
        shall accelerate its collections of Accounts Receivable or defer payment
        of its
        trade payables of the Business outside of the ordinary course of business
        consistent with past practices; and all cash collected by any Seller from
        Accounts Receivable reflected on the Business Balance Sheet or otherwise
        generated by the Business shall be used to pay the accounts payable, operating
        expenses and other liabilities directly related to the operation of the Business
        to pay such other expenses and liabilities of the Sellers incurred or as
        may be
        incurred in the ordinary course of business;

       

      
        
           

        

        
          -34-

          
            

          

        

        
           

        

      

      (b)  Shall
        use
        the proceeds from the Bridge Loans, or cause such proceeds to be used, to
        pay
        the accounts payable, operating expenses and other liabilities directly related
        to the operation of the Business and to the extent any remaining proceeds
        are
        available to pay such other expenses and liabilities of the Sellers incurred
        or
        as may be incurred in the ordinary course of business in accordance with
        the
        Bridge Loan Documents;

       

      (c)  Shall
        maintain overall marketing efforts of the Business at levels consistent with
        past practices in accordance with Sellers’ plans for the remainder of fiscal
        year 2005 and, shall continue to offer Business products and services upon
        terms
        and conditions consistent with those currently being offered on the date
        hereof
        in the ordinary course of business consistent with past practices;

       

      (d)  Shall
        consult in good faith, cooperate and confer on a regular basis with Buyer
        to
        report operational matters of materiality, in order to allow for an orderly
        transition, and any proposals to engage in material transactions, whether
        or not
        in the ordinary course of business;

       

      (e)  Shall,
        and shall cause each of its Affiliates to, promptly notify Buyer of any Material
        Adverse Change, any governmental complaints, investigations or hearings (or
        communications indicating that the same may be contemplated), or any breach
        or
        inaccuracy of any representation or warranty contained herein; 

       

      (f)  Shall
        not
        amend its charter, bylaws or similar organizational documents, and shall
        cause
        each Subsidiary of such Seller not to amend its charter, bylaw or organizational
        documents, other than amendments solely to effect the change of corporate
        name
        of Sellers and their Affiliates in accordance with Section 5.07;

       

      (g)  Shall
        not
        (A) issue any of its shares of capital stock, effect any share split, share
        combination, reverse share split, share dividend, recapitalization or other
        similar transaction (except pursuant to the exercise of the employee options
        or
        the warrants existing on the date hereof and disclosed in Schedule
        5.01(g),
        (B)
        grant, confer or award any option, right, warrant, deferred stock unit,
        conversion right or other right not existing on the date hereof to acquire
        any
        of its shares of capital stock, (C) increase any compensation or enter into,
        extend or amend any employment or severance agreement with any of its employees,
        officers or directors, (D) grant any bonuses to any of its employees, officers
        or directors, or (E) adopt any new employee benefit plan (including any stock
        option, stock benefit or stock purchase plan) or amend any existing employee
        benefit plan;

       

      (h)  Shall
        not
        (A) declare, set aside or pay any dividend or make any other distribution
        or
        payment (whether in cash, stock or other property) with respect to any of
        the
        capital stock of any Seller (including to the Parent Common Stock,) or allow
        any
        of the Subsidiaries to pay or make any such dividend, distribution or payment
        (other than dividends or distributions from a wholly-owned Subsidiary to
        another
        Subsidiary or to Parent in the ordinary course of business consistent with
        past
        practice) or (B) directly or indirectly redeem, purchase or otherwise acquire
        any of its shares of capital stock or any equity interest of any of the Sellers
        or Subsidiaries, or make any commitment for any such action;

       

      
        
           

        

        
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      (i)  Shall
        not, and shall not permit any of its Affiliates to sell, lease, license or
        otherwise dispose of (i) any assets or properties or any portion thereof
        owned,
        held or used by any Seller or any of their Affiliates in connection with,
        or
        necessary for, the conduct of the Business, in each case other than pursuant
        to
        nonexeclusive customer license agreements entered into in the ordinary course
        of
        business consistent with past practice; or (ii) any of the capital stock
        of or
        other interests in any of the Sellers (except Parent);

       

      (j)  Shall
        not
        mortgage or pledge any of its property or assets or subject any such property
        or
        assets to any security interest, except for (v) the security interests granted
        or to be granted pursuant to the Bridge Loan Documents, (w) any modification
        of
        the security interests heretofore granted to Laurus which shall be made in
        accordance with the Bridge Loan Documents, (x) any liens for taxes, assessments
        and other governmental charges not yet due and payable, (y) statutory,
        mechanics’, laborers’ and materialmen’s liens arising in the ordinary course of
        business for sums not yet due, and (z) statutory and contractual landlord’s
        liens under leases pursuant to which Seller is a lessee not in
        default;

       

      (k)  Shall
        not, and shall not permit any of its Affiliates to, forgive any existing
        indebtedness to any Seller or any Subsidiaries or discharge any security
        interest in favor of any Seller, or make any loans, advances or transfers
        (other
        than (i) to customers of a Seller in an aggregate amount not in excess of
        $10,000 in the ordinary course of business consistent with past practice
        and
        (ii) intercompany loans, advances or transfers from a wholly-owned Subsidiary
        to
        another Subsidiary or to Parent, or from Parent to a wholly-owned Subsidiary,
        in
        the ordinary course of business consistent with past practice) or capital
        contributions to, or investments in, any other Person other than reasonable
        and
        normal loans or advances to employees for bona fide expenses that are not
        material in amount and are incurred in the ordinary course of business
        consistent with past practice;

       

      (l)  Shall
        not, and shall not permit any of its Affiliates to, pay, discharge or satisfy
        any material claims, liabilities or obligations (absolute, accrued, asserted
        or
        unasserted, contingent or otherwise), other than the payment, discharge or
        satisfaction, in the ordinary course of business consistent with past practice
        or in accordance with their terms, of material liabilities reflected or reserved
        against in, or contemplated by, the most recent consolidated Financial
        Statements (or the notes thereto) of Parent included in the Seller Reports
        filed
        with the SEC prior to the date hereof or incurred in the ordinary course
        of
        business consistent with past practice;

       

      (m)  Shall
        not, and shall not permit any of its Affiliates to, enter into any material
        commitment, contractual obligation, borrowing, capital expenditure or
        transaction (each a “Commitment”)
        which
        may result in total payments or liability by or to it in excess of $10,000
        other
        than the Bridge Loans, the proposed leasing of new office premises in
        Foxborough, Massachusetts and customer or vendor agreements entered into
        in the
        ordinary course of business consistent with past practice, and shall not
        make or
        commit to make capital expenditures in excess of $100,000 in the aggregate;
        

       

      (n)  Shall
        not
        amend, terminate, take or omit to take any action that would constitute a
        violation of or default under any Commitment, except where such action would
        not, individually or in the aggregate, reasonably be expected to have a Material
        Adverse Effect;

       

      
        
           

        

        
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      (o)  Shall
        not
        take any action or fail to take any action permitted by this Agreement with
        the
        knowledge that such action or failure to take action would reasonably be
        expected to result in any of the representations and warranties of any Seller
        set forth in this Agreement becoming untrue such that any of the conditions
        to
        consummating the Asset Sale and the other transactions contemplated herein
        would
        not be satisfied;

       

      (p)  Shall
        not
        license or transfer to any Person or entity any rights to Business Intellectual
        Property other than customer subscription agreements, licenses, distribution
        agreements or transfers necessary to conduct development or perform services
        in
        the ordinary course of business consistent with past practice;

       

      (q)  Shall
        not
        merge with, enter into a consolidation with or acquire an interest of 5%
        or more
        in any Person or acquire a substantial portion of the assets or business
        of any
        Person or any division or line of business thereof, or otherwise acquire
        any
        assets other than in the ordinary course of business;

       

      (r)  Shall
        not
        materially write down or write up (or fail to write down or write up in
        accordance with consistent past practice) the value of any receivables or
        revalue any assets of any Seller other than in the ordinary course of business
        and in accordance with GAAP;

       

      (s)  Shall
        not, without prior notification and consultation with Buyer, terminate any
        employee under circumstances which would result in severance payments to
        such
        employee or pay any severance benefits to any employee on account of such
        employee’s termination; 

       

      (t)  Shall
        maintain in full force and effect in all material respects the insurance
        policies listed in Schedule
        3.15;
        

       

      (u)  Shall
        not, and shall not permit any of its Affiliates to, create, incur or assume
        any
        indebtedness (including, without limitation, refinancing or modifying any
        existing indebtedness), assume, guarantee, endorse or otherwise become liable
        or
        responsible (whether, directly, contingently or otherwise) for the indebtedness
        of another Person, enter into any agreement to maintain any financial statement
        condition of another Person or enter into any arrangement having the economic
        effect of any of the foregoing except for the Bridge Loans or intercompany
        loans
        from a wholly-owned Subsidiary to another Subsidiary or to Parent, or from
        Parent to a wholly-owned Subsidiary, in the ordinary course of business
        consistent with past practice;

       

      (v)  Shall
        not, and shall not permit any of its Affiliates to, make or rescind any election
        relating to Taxes that could reasonably be expected to affect the Business,
        the
        Purchased Assets or the transactions contemplated by this Agreement (unless
        Seller reasonably determines, after prior consultation with Buyer, that such
        action is required by applicable law); 

       

      (w)  Shall
        not: (A) change any of its methods, principles or practices of accounting
        currently in effect other than as required by GAAP (including with respect
        to
        revenue and expense recognition methods) or (B) settle or compromise any
        claim,
        action, suit, litigation, proceeding, arbitration, investigation, audit or
        controversy relating to Taxes, except in the case of settlements or compromises
        the amount of which does not to exceed, individually or in the aggregate,
        $10,000, or materially change (or make a request to any taxing authority
        to
        change) any of its methods of reporting income or deductions for federal
        income
        tax purposes from those employed in the preparation of its federal income
        Tax
        Return for the taxable year ended December 31, 2003, except as may be required
        by the SEC, applicable law or GAAP;

       

      
        
           

        

        
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      (x)  Except
        as
        set forth in Schedule
        5.01(x),
        shall
        not enter into or amend or otherwise modify any agreement or arrangement
        with
        Persons that are Affiliates or, as of the date of this Agreement, are officers
        or directors of any Seller;

       

      (y)  Shall
        not, authorize, recommend, propose or announce an intention to adopt a plan
        of
        complete or partial liquidation or dissolution of Parent or any Seller without
        the prior written consent of Buyer (which consent shall not be unreasonably
        withheld);

       

      (z)  Shall
        use
        best efforts to hire employees to fill the following positions as soon as
        practicable on terms of employment that shall be acceptable to Buyer: Engagement
        Manager, Solution Architect, Regional Sales Manager and Support
        Manager;

       

      (aa)  Shall
        use
        best efforts to hire new employees to replace any employee, employed as of
        the
        date hereof, whose employment is terminated for any reason on terms of
        employment that shall be acceptable to Buyer; and 

       

      (bb)  Shall
        not, and shall not permit any of its Affiliates to, agree in writing or
        otherwise to take any action inconsistent with any of the
        foregoing.

       

      5.02.  Access
        to Information.
        From
        the date hereof until the Closing Date, each Seller shall (a)  give
        Buyer,
        its counsel, financial advisors, financing sources, auditors and other
        authorized representatives full access to the offices, properties, books
        and
        records of Parent and all Subsidiaries, (b) furnish to Buyer, its
        counsel,
        financial advisors, auditors and other authorized representatives such financial
        and operating data and other information relating to the Business as such
        Persons may reasonably request and (c) instruct the employees, counsel
        and
        financial advisors of Sellers to cooperate with Buyer in its investigation
        of
        the Business. No investigation by Buyer pursuant to this Section shall affect
        any representation or warranty given by Sellers hereunder or any of Buyer’s
        rights under this Agreement, including without limitation under Articles
        X and
        XI.

       

      5.03.  Monthly
        Financials; Notices of Events; Continuing Disclosure.

       

      (a)  From
        the
        date hereof until the Closing Date, Parent shall furnish Buyer with (i)
        unaudited monthly balance sheets and statements of income of Sellers
        (consolidated and consolidating) for the Business within ten days after each
        month end and (ii) all of Parent’s filings with the SEC on or prior to the date
        of such filing.

       

      (b)  Sellers
        shall promptly notify Buyer of:

       

      (i)  any
        notice or other communication from any Person alleging that the consent of
        such
        Person is or may be required in connection with the transactions contemplated
        by
        this Agreement;

       

      
        
           

        

        
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      (ii)  any
        notice or other communication from any governmental or regulatory agency
        or
        authority in connection with the transactions contemplated by this Agreement;
        and

       

      (iii)  any
        actions, suits, claims, investigations or proceedings commenced or, to Sellers’
        Knowledge threatened against, or relating to or involving or otherwise affecting
        any Seller or that relate to the consummation of the transactions contemplated
        by this Agreement, or any material developments relating to any actions,
        suits,
        claims, investigations or proceedings disclosed pursuant to Section
        3.12.

       

      (c)  Until
        the
        Closing Date, Sellers shall have the continuing obligation promptly to advise
        Buyer with respect to any matter hereafter arising or discovered that, if
        existing or known at the date of this Agreement, would have been required
        to be
        set forth or described in a Schedule to this Agreement, or that constitutes
        a
        breach or prospective breach of this Agreement by any Seller.

       

      (d)  No
        notice
        pursuant to this Section shall affect any representation or warranty given
        by
        any Seller hereunder or any of Buyer’s rights under this Agreement, including
        without limitation under Articles X and XI.

       

      5.04.  No
        Solicitation.

       

      (a)  Unless
        and until this Agreement shall have been terminated in accordance with Article
        XII hereof, Sellers agree and covenant that neither they nor any Affiliate
        thereof shall, nor shall they permit any of their respective officers,
        directors, affiliates, employees, agents, investment bankers, financial
        advisors, attorneys, accountants, brokers, finders, consultants or other
        representatives (each, a “Representative”)
        to,
        directly or indirectly, invite, initiate, solicit, encourage or facilitate
        (including by way of furnishing nonpublic information or assistance) any
        inquiries, proposals, discussions or negotiations or the making or
        implementation of any proposal or offer (including, without limitation, any
        proposal or offer to its stockholders) with respect to, or that may reasonably
        be expected to lead to, any direct or indirect (i) merger, consolidation,
        business combination, reorganization, recapitalization, liquidation, dissolution
        or similar transaction involving any Seller, (ii) any sale, lease, exchange,
        mortgage, pledge, transfer or other disposition of the Business or any assets
        of
        any of the Sellers or any of their Affiliates owned, held or used in connection
        with, or necessary for, the operation of the Business, in one or a series
        of
        transactions (other than dispositions in the ordinary course of business
        consistent with past practice), (iii) any tender offer, share exchange or
        exchange offer or other similar transaction or series of transactions that,
        if
        consummated, would relate to 15% or more of the outstanding shares of Parent
        Common Stock or (iv) any transaction which would make consummation of the
        Asset
        Sale reasonably unlikely to occur (each, an “Acquisition
        Proposal”)
        or
        engage in any discussions or negotiations with any Person with respect to,
        or
        that may reasonably be expected to lead to, an Acquisition Proposal, or enter
        into any letter of intent, agreement in principle or agreement relating to
        an
        Acquisition Proposal, or propose publicly to do any of the foregoing. Without
        limiting the foregoing, it is agreed that any violation of any of the
        restrictions set forth in this Section 5.04(a) by any Representative of Seller,
        whether or not such Person is purporting to act on behalf of any Seller or
        otherwise, shall be deemed to be a violation of this Section
        5.04(a).

       

      
        
           

        

        
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      (b)  Parent
        agrees to promptly notify Buyer of the receipt of any proposal or expression
        of
        interest relating to an Acquisition Proposal, describing in each case the
        identity of the person making such proposal, offer, inquiry or other contact
        and
        the terms and conditions of any proposals or offers or the nature of any
        inquiries or contacts (and shall include with such notice copies of any written
        materials received from or on behalf of such person relating to such proposal,
        offer, inquiry or request), and thereafter shall promptly keep Buyer fully
        informed of all material developments affecting the status and terms of any
        such
        proposals, offers, inquiries or requests. Parent shall not (i)(A) withdraw
        or
        modify, or propose publicly to withdraw or modify, in a manner adverse to
        Buyer,
        the recommendation of the Parent Board in favor of the transactions contemplated
        by this Agreement or (B) approve or recommend, or propose publicly to approve
        or
        recommend, any Acquisition Proposal or (ii) approve or recommend, or propose
        publicly to approve or recommend, or cause or authorize any Seller to enter
        into, any letter of intent, agreement in principle, memorandum of understanding,
        merger, acquisition, purchase or joint venture agreement or other agreement
        related to any Acquisition Proposal. 

       

      5.05.  Preparation
        of the Proxy Statement; Meeting of Stockholders.

       

      (a)  As
        soon
        as reasonably practicable following the date of this Agreement (but in no
        event
        later than ten days following the date of this Agreement), Parent shall prepare
        and file with the SEC a preliminary Proxy Statement, in form and substance
        reasonably satisfactory to Buyer, with indication of such satisfaction not
        to be
        unreasonably withheld or delayed. The Proxy Statement shall solicit approval
        of
        this Agreement, the Asset Sale and the transactions contemplated hereby
        (including changing the corporate name of Parent) and no other actions, unless
        Buyer consents in its sole discretion to such other Actions. Buyer shall
        provide
        such information concerning its business and financial statements and affairs
        as, in its reasonable judgment, may be required for inclusion in the preliminary
        or definitive Proxy Statement, or in any amendments or supplements thereto,
        and
        to cooperate with Parent in the preparation of the preliminary or definitive
        Proxy Statement, or in any amendments or supplements thereto. Each of Parent
        and
        Buyer shall use its commercially reasonable efforts to have the Proxy Statement
        cleared by the SEC for mailing to the Parent’s stockholders as promptly as
        practicable after such filing. Parent will notify Buyer promptly following
        the
        receipt by Parent of any comments from the SEC and of any request by the
        SEC for
        amendments or supplements to the Proxy Statement or for additional information
        and will supply Buyer with copies of all correspondence between Parent or
        any of
        its Representatives and the SEC with respect to the Proxy Statement. Parent
        will
        provide Buyer with the opportunity to review and provide comments on drafts
        of
        any letters, memoranda or other correspondence to the SEC prepared by Parent
        in
        connection with the Proxy Statement a reasonable time prior to such letters,
        memoranda or other correspondence are submitted to the SEC, and will in good
        faith consider such comments. Parent agrees that the Proxy Statement will
        comply
        in all material respects with all applicable requirements of the Exchange
        Act
        and the rules and regulations promulgated thereunder. Parent shall cause
        the
        Proxy Statement to be mailed to its stockholders at the earliest practicable
        date (but in any event no later than three business days following clearance
        by
        the SEC). Whenever any event occurs which is required to be set forth in
        an
        amendment or supplement to the Proxy Statement, (i) Buyer or Parent, as the
        case
        may be, shall promptly inform the other of such occurrences, (ii) Parent
        shall
        prepare and file with the SEC any such amendment or supplement to the Proxy
        Statement, in a form reasonably satisfactory to Buyer, and (iii) Parent shall
        have any such amendment or supplement mailed to its stockholders at the earliest
        practicable date.

       

      
        
           

        

        
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      (b)  Parent
        shall take all actions necessary to assure that the Proxy Statement and each
        amendment or supplement thereto, at the time of mailing thereof and at the
        time
        of the Stockholders Meeting, will not include an untrue statement of a material
        fact or omit to state a material fact required to be stated therein or necessary
        to make the statements therein, in light of the circumstances under which
        they
        were made, not misleading. 

       

      (c)  Parent
        shall take all action necessary in accordance with applicable law and its
        certificate of incorporation and bylaws to convene a meeting of its stockholders
        (the “Stockholders
        Meeting”)
        as
        promptly as practicable to consider and vote upon the approval of this
        Agreement, the Asset Sale and the transactions contemplated hereby (including
        changing the corporate name of Parent) and no other corporate actions,
        transactions or Acquisition Proposal will be considered at such Stockholders
        Meeting or at any other meeting of its stockholders prior to the Closing
        Date
        without the prior written consent of Buyer. The Parent Board has recommended
        and
        declared advisable that the Parent stockholders approve and adopt this
        Agreement, the Asset Sale and the transactions contemplated hereby, and Parent
        shall include such recommendation in the Proxy Statement. Prior to the Closing
        Date, neither the Parent Board nor any committee thereof shall withdraw or
        modify the approval or recommendation by such board of directors. Parent
        shall
        take all such other actions necessary or desirable to obtain the approval
        of the
        Parent’s stockholders. 

       

      5.06.  Confidentiality.
        Sellers
        and their Affiliates will hold, and will use their best efforts to cause
        their
        respective officers, directors, employees, accountants, counsel, consultants,
        advisors and agents to hold, in confidence, unless compelled to disclose
        by
        judicial or administrative process or by other requirements of law, all
        confidential documents and information concerning Buyer furnished to any
        Seller
        or its Affiliates, in connection with the transactions contemplated by this
        Agreement, and after the Closing Date, all confidential documents and
        information concerning the Business, except to the extent that such information
        can be shown to have been (a) previously known on a nonconfidential
        basis
        by any Seller, (b) in the public domain through no fault of any Seller
        or
        any Affiliate of any Seller or (c) later lawfully acquired by any
        Seller or
        any Affiliate of any Seller from sources other than Buyer; provided that
        Sellers
        may disclose such information to its officers, directors, employees,
        accountants, counsel, consultants, advisors and agents in connection with
        the
        transactions contemplated by this Agreement so long as such persons are informed
        by Sellers of the confidential nature of such information and are directed
        by
        Sellers to treat such information confidentially in accordance with this
        Agreement. The obligation of Sellers and their Affiliates to hold any such
        information in confidence shall be satisfied if they exercise the same care
        with
        respect to such information as they would take to preserve the confidentiality
        of their own similar information. If this Agreement is terminated, Sellers
        and
        their Affiliates will, and will use their best efforts to cause their respective
        officers, directors, employees, accountants, counsel, consultants, advisors
        and
        agents to, destroy or deliver to Buyer, upon request, all documents and other
        materials, and all copies thereof, obtained by Sellers or their Affiliates
        or on
        their behalf concerning Buyer in connection with this Agreement that are
        subject
        to such confidence.

       

      
        
           

        

        
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      5.07.  Change
        and Use of Names.
        On and
        after the Closing Date, Sellers and their Affiliates shall eliminate the
        use of
        all of the trademarks, tradenames, service marks and service names used in
        the
        Business (including the names or words “Axeda” and “eMation”), in any of their
        forms or spellings, on all advertising, stationery, business cards, checks,
        purchase orders and acknowledgments, customer agreements and other contracts
        and
        business documents. Prior to Closing, each Seller and its Subsidiaries and
        Affiliates shall change its corporate name so as to bear no resemblance to
        the
        current name of any of the Sellers, and shall not contain the words “Axeda” or
        any derivation thereof.

       

      5.08.  Transitional
        Assistance.
        No
        Seller shall in any manner take any action which is designed, intended or
        might
        reasonably be anticipated to have the effect of discouraging customers,
        suppliers, vendors, service providers, employees, lessors, licensors and
        other
        business relations of Sellers or their Affiliates from maintaining the same
        business relationships with Buyer and its Affiliates after the date of this
        Agreement. Without in any way limiting the generality of the foregoing, no
        Seller shall sue or otherwise pursue any claims against any business relation
        of
        Sellers or their Affiliates with respect to any Purchased Asset or Assumed
        Liability or with respect to any previous contractual relationship between
        any
        Seller, on the one hand, or any customer thereof, on the other hand
        (collectively, “Customers
        or Business Relations”);
        provided, however, that (a) a Seller shall be entitled to defend itself against
        any claims brought by any such Customer or Business Relation or to assert
        counter-claims, offsets or any affirmative defenses against such Customer
        or
        Business Relation, (b) if any third party shall bring any claim against a
        Seller
        that such Seller reasonably believes is the responsibility or liability of
        a
        Customer or Business Relation, then such Seller shall have the right to bring
        a
        claim in the nature of impleader against such Customer or Business Relation
        with
        respect to such claim and (c) Sellers shall be entitled to pursue causes
        of
        action against any Customer or Business Relation or as otherwise necessary
        to
        protect or enforce their rights with regard to any Excluded Asset or Excluded
        Liability.

       

      5.09.  Payments
        with Respect to Purchased Assets.
        Sellers
        shall promptly remit to Buyer all monies received by any Seller or any of
        their
        Affiliates following the Closing Date in payment for any Purchased Assets
        acquired by Buyer pursuant to this Agreement. Payments remitted to Buyer
        pursuant to this Section 5.09 shall be in the form received by a Seller
        or
        any of its Affiliates.

       

      5.10.  [Intentionally
        Omitted].

       

      5.11.  Questra
        Litigation.
        Sellers
        shall promptly notify Buyer of the all developments pertaining to the Questra
        Litigations. In no event shall any Seller or any Affiliate of any Seller
        enter
        into any settlement agreement pertaining to the Questra Litigations and/or
        the
        patents subject to claims thereunder without the prior written consent of
        Buyer.
        Sellers shall provide Buyer with at least five (5) business days’ advance notice
        of any proposed settlement, including providing a copy thereof. Upon Buyer’s
        request, Sellers shall, and shall cause their Affiliates to, enter into a
        settlement agreement with Questra in form acceptable to Buyer, provided that
        the
        terms of such settlement agreement do not require any Seller to pay to Questra
        or any other opposing party any costs, fees, damages or other penalties with
        respect to such Questra Litigations.

       

      
        
           

        

        
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      5.12.  State
        Tax Clearance.
        Promptly following execution of this Agreement, Sellers shall use commercially
        reasonable efforts to obtain from the Massachusetts Department of Revenue
        a
        Certificate of Tax Compliance and Waiver of Corporate Tax Lien in accordance
        with Massachusetts General Laws Chapter 62C, Section 51 and comparable tax
        clearance certificates from the taxing authorities of such other states deemed
        necessary to ensure the transfer of the Purchased Assets (or any of them)
        are
        free and clear of any lien imposed by any state taxing authority. If, after
        all
        appropriate efforts, such certificate is not obtainable from the Massachusetts
        Department of Revenue, then Sellers shall no less than five (5) business
        days
        prior to the Closing Date, deliver the requisite notice to, and shall pay
        all
        taxes owed to, the Massachusetts Department of Revenue in accordance with
        Massachusetts General Laws Chapter 62C, Section 51. 

       

      5.13.  Intercompany
        Transfers of Purchased Assets.
        Sellers
        and the Transferring Affiliates shall take all action necessary to duly and
        properly assign, transfer and deliver to ASOC all of the Purchased Assets
        identified in Schedule
        3.09
        such
        that ASOC will have good and marketable title in and to each of such Purchased
        Assets, free and clear of all Liens before Closing.

       

      5.14.  Use
        of
        Proceeds.
        Sellers
        shall, and shall cause their Affiliates to, use the proceeds from the sale
        of
        the Purchased Assets to pay in full or satisfy in full the Laurus Debt in
        accordance with the terms of the Laurus Consent Letter and all the Excluded
        Liabilities of Sellers before using any such proceeds for any other
        purposes.

       

      5.15.  Office
        Lease.
        Sellers
        shall use their best efforts to cause ASOC to enter into a new office lease
        as
        soon as practicable following execution of this Agreement, but in any event
        prior to September 30, 2005 on terms acceptable to Buyer. Upon entering
        into such new office lease (on terms acceptable to Buyer), such lease shall
        be
        added to Schedule
        2.01(a)
        and
        shall be deemed a Contract to be assigned to Buyer under this Agreement.
        On or
        prior to Closing, Buyer, in its sole discretion, may choose to assume and
        acquire Sellers’ holdover rights in the existing lease of office space located
        at 21 Oxford Road in Mansfield, Massachusetts in the event Sellers fail to
        cause
        ASOC to enter into a new office lease on terms acceptable to Buyer.

       

      5.16.  Compliance.
        Sellers
        shall use commercially reasonable efforts to ensure compliance with all notice
        requirements under its license obligations and applicable export control
        obligations relating to the Purchased Assets and/or the conduct of the
        Business.

       

      ARTICLE
        VI

       

      COVENANT
        NOT TO COMPETE

       

      6.01.  Noncompetition;
        Nonsolicitation.

       

      (a)  For
        a
        period of five full years from the Closing Date, none of the Sellers nor
        any of
        their respective Affiliates (collectively, the “Restricted
        Parties”)
        shall,
        directly or indirectly, whether alone or in concert with others, and in whatever
        capacity, for any of them or on behalf of or in conjunction with any other
        Person:

       

      
        
           

        

        
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      (i)  engage
        in
        the Business anywhere in the world, except that the Restricted Parties
        may own not more than an aggregate of five percent (5%) of the outstanding
        voting securities of any publicly held Person that competes, directly or
        indirectly, with the Business, as long as none of the Restricted Parties
        participates in the management, direction or operations of any such publicly
        held Person;

       

      (ii)  solicit
        or divert away or attempt to solicit or divert away any customer served or
        solicited by Sellers or the Business in an effort to provide services or
        products to such customer which compete that those provided by Sellers or
        the
        Business, or otherwise induce any customer of the Business to curtail or
        cease
        doing business with Buyer; or

       

      (iii)  solicit
        or induce any of the Transferred Employees to terminate his or her employment
        with Buyer, or employ or establish a business with any Transferred Employee
        or
        solicit or encourage any Transferred Employee to leave his or her employment
        or
        terminate his or her relationship with Buyer.

       

      (b)  If
        any
        provision contained in this Section shall for any reason be held invalid,
        illegal or unenforceable in any respect, such invalidity, illegality or
        unenforceability shall not affect any other provisions of this Section, but
        this
        Section shall be construed as if such invalid, illegal or unenforceable
        provision had never been contained herein. It is the intention of the parties
        that if any of the restrictions or covenants contained herein is held to
        cover a
        geographic area or to be for a length of time which is not permitted by
        applicable law, or in any way construed to be too broad or to any extent
        invalid, such provision shall not be construed to be null, void and of no
        effect, but to the extent such provision would be valid or enforceable under
        applicable law, a court of competent jurisdiction shall construe and interpret
        or reform this Section to provide for a covenant having the maximum enforceable
        geographic area, time period and other provisions (not greater than those
        contained herein) as shall be valid and enforceable under such applicable
        law.
        Sellers acknowledge that Buyer would be irreparably harmed by any breach
        of this
        Section and that there would be no adequate remedy at law or in damages to
        compensate Buyer for any such breach. Sellers agree that Buyer shall be entitled
        to injunctive relief requiring specific performance by Sellers of this Section,
        and Sellers consent to the entry thereof. Sellers shall be responsible for
        all
        violations of any of the covenants in this Section 6.01 by any of
        the
        Restricted Parties. Buyer acknowledges that the provisions of this Article
        VI
        shall not prevent any Seller from conducting the Supervisor Business or from
        soliciting any customer served or solicited by Sellers or the Business in
        an
        effort to provide to such customer services or products pertaining to the
        industrial automation products marketed as Sellers’“Supervisor” product
        family.

       

      6.02.  No
        Solicitation of Supervisor Employees.
        For a
        period of one year from the date hereof, Buyer shall not, directly or
        indirectly, whether alone or in concert with others, and in whatever capacity,
        for any of them or on behalf of or in conjunction with any other Person,
        solicit
        or induce any employee of any Seller exclusively employed in the Supervisor
        Business (“Supervisor Employee”) to terminate his or her employment with such
        Seller, or employ or establish a business with any such Supervisor Employee
        or
        solicit or encourage any such Supervisor Employee to leave his or her employment
        or terminate his or her relationship with Sellers; provided that Buyer shall
        not
        be restricted from making a general solicitation for employees that is not
        specifically directed at any such Supervisor Employee and provided that nothing
        in this paragraph shall preclude Buyer from considering and accepting an
        application from any individual in response to a published recruitment
        advertisement or a general mandate given to any recruitment
        consultant.

       

      
        
           

        

        
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      ARTICLE
        VII

       

      COVENANTS
        OF BOTH PARTIES

       

      7.01.  Best
        Efforts to Consummate Transactions.
        Subject
        to the terms and conditions of this Agreement, each party will use its best
        efforts to take, or cause to be taken, all actions and to do, or cause to
        be
        done, all things necessary or desirable under applicable laws and regulations
        to
        consummate the transactions contemplated by this Agreement and the Ancillary
        Agreements. Sellers will use all best efforts to obtain in writing any consents
        required from third parties to effectuate the Asset Sale and the other
        transactions contemplated by this Agreement and the Ancillary Agreements
        (including the consents to assign the Contracts), such consents to be in
        form
        satisfactory form to Buyer.

       

      7.02.  Certain
        Filings; Consents.
        Sellers
        and Buyer shall cooperate with each other (a) in determining whether
        any
        action by or in respect of, or filing with, any governmental body, agency,
        official or authority is required, or any actions, consents, approvals or
        waivers are required to be obtained from parties to any material contracts,
        in
        connection with the consummation of the transactions contemplated by this
        Agreement and the Ancillary Agreements and (b) in taking such actions
        or
        making any such filings, furnishing information required in connection therewith
        and seeking timely to obtain any such actions, consents, approvals or
        waivers.

       

      7.03.  Public
        Announcements.
        Sellers
        and Buyer agree to consult with each other before issuing any press release,
        making any public statement or filing any publicly availably document (including
        filings with the SEC) with respect to or which describes or refers to this
        Agreement, any of the Ancillary Agreements or the transactions contemplated
        hereby or thereby and, will not issue, make or file any such press release,
        public statement or public document without the prior consent of Parent and
        Buyer, which consent shall not be unreasonably withheld or delayed; provided,
        however, that a party may, without the prior consent of the other party,
        issue,
        make or file such press release, public statement or public document as may
        be
        required by law if it has used its commercially reasonable efforts to consult
        with the other party and to obtain such party’s consent but has been unable to
        do so in a timely manner.

       

      7.04.  Further
        Assurances.

       

      (a)  Sellers
        and Buyer each agree to execute and deliver such other documents, certificates,
        agreements and other writings and to take such other actions as may be necessary
        or desirable in order to consummate or implement expeditiously the transactions
        contemplated by this Agreement and to vest in Buyer good and marketable title
        to
        the Purchased Assets.

       

      (b)  Sellers
        hereby constitute and appoint, effective as of the Closing Date, Buyer and
        its
        successors and assigns as the true and lawful attorney of Sellers with full
        power of substitution in the name of Buyer or in the name of Sellers, but
        for
        the benefit of Buyer (i) to collect for the account of Buyer any items
        of
        Purchased Assets and (ii) to institute and prosecute all proceedings
        which
        Buyer may in its sole discretion deem proper in order to assert or enforce
        any
        right, title or interest in, to or under the Purchased Assets, and to defend
        or
        compromise any and all actions, suits or proceedings in respect of the Purchased
        Assets. Buyer shall be entitled to retain for its account any amounts collected
        pursuant to the foregoing powers, including any amounts payable as interest
        in
        respect thereof.

       

      
        
           

        

        
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      ARTICLE
        VIII

       

      TAX
        MATTERS

       

      8.01.  Tax
        Definitions.
        The
        following terms, as used herein, have the following meanings:

       

      “Code”
        means
        the Internal Revenue Code of 1986, as amended.

       

      “Post-Closing
        Tax Period”
        means
        any Tax period (or portion thereof) beginning after the Closing
        Date.

       

      “Pre-Closing
        Tax Period”
        means
        any Tax period (or portion thereof) ending on or before the Closing
        Date.

       

      “Tax”
        means
        any federal, state, local or foreign net income, alternative or add-on minimum,
        gross income, gross receipts, sales, use, value-added, ad valorem, franchise,
        capital, paid-up capital, profits, lease, service, transfer, greenmail, license,
        withholding, estimated, payroll, employment, excise, severance, stamp,
        occupation, premium, property, environmental or windfall profit tax, customs
        duty or other tax, governmental fee or other like assessment or charge of
        any
        kind whatsoever (including liability for Taxes imposed on another Person,
        whether incurred or borne as a transferee or successor or by contract or
        otherwise), together with any interest or any penalty, addition to tax or
        additional amount imposed by any governmental authority (domestic or foreign)
        responsible for the imposition of any such tax.

       

      “Tax
        Return”
        means
        any return, declaration, report, claim for refund, or information return
        or
        statement relating to Taxes, including any schedule or attachment thereto,
        and
        including any amendment thereof.

       

      8.02.  Tax
        Matters.
        Sellers
        hereby jointly and severally represent and warrant to Buyer that:

       

      (a)  Each
        Seller and each Affiliate of a Seller has filed all Tax Returns required
        to be
        filed by it and has paid all Taxes shown on such Tax Returns. All such Tax
        Returns were complete and correct in all material respects. Except as set
        forth
        in Schedule
        8.02(a),
        no
        portion of any Tax Return has been the subject of any audit, action, suit,
        proceeding, claim or examination by any governmental authority, and no such
        audit, action, suit, proceeding, claim, deficiency or assessment is pending
        or,
        to the knowledge of any Seller, threatened. Except as set forth in Schedule
        8.02(a),
        no
        Seller is currently the beneficiary of any extension of time within which
        to
        file any Tax Return, and no Seller has waived any statute of limitation with
        respect to any Tax or agreed to any extension of time with respect to a Tax
        assessment or deficiency. No claim has ever been made by a Tax authority
        in any
        jurisdiction where no Seller does not file Tax Returns that it is or may
        be
        subject to taxation by that jurisdiction. There are no Liens for Taxes upon
        the
        Purchased Assets. No Seller has, or has had, a tax liability in a foreign
        country associated with a permanent establishment or other taxable presence
        in
        any country other than its country of formation or organization, as determined
        under the laws of such country or any applicable Tax treaty or convention
        between the United States and such foreign country. No Seller has any liability
        for the Taxes of any Person (other than another Seller or another member
        of the
        consolidated group of which Parent is a member) under Treasury Regulation
        Section 1.1502-6 (or any corresponding provision of state, local or foreign
        Tax
        law), or as a transferee or successor, or by contract, or otherwise.

       

      
        
           

        

        
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      (b)  Except
        as
        set forth in Schedule
        8.02(b),
        each
        Seller and each Affiliate of a Seller has withheld and paid all Taxes required
        to have been withheld and paid. Except as set forth in Schedule
        8.02(b),
        none of
        the Assumed Liabilities is an obligation to make a payment that will not
        be
        deductible under Section 280G of the Code.

       

      (c)  Subject
        to Sellers’ delivery to Buyer at Closing of appropriate tax clearance
        certificates from the Massachusetts taxing authorities, no portion of the
        Purchase Price is subject to any Tax withholding provision of federal, state,
        local or foreign law. Except as set forth on Schedule
        8.02(c),
        no
        state of facts exists or has existed that would constitute grounds for the
        assessment against Buyer, whether by reason of transferee liability or
        otherwise, of any liability for any Tax of anyone other than Buyer. The
        Purchased Assets do not include any stock or other ownership interests in
        any
        foreign or domestic corporations, partnerships, joint ventures, limited
        liability companies, business trusts, or other entities. 

       

      (d)  Except
        as
        set forth in Schedule
        8.02(d),
        each
        Seller has timely paid all Taxes, and all interest and penalties due thereon
        and
        payable by it, for the Pre-Closing Tax Period which will have been required
        to
        be paid on or prior to the Closing Date, the non-payment of which would result
        in a Lien on any Purchased Asset, would otherwise have a Material Adverse
        Effect
        or would result in Buyer becoming liable or responsible therefor.

       

      (e)  Each
        Seller has established, in accordance with GAAP applied on a basis consistent
        with that of preceding periods, adequate reserves for the payment of, and
        will
        timely pay, all Taxes which arise from or with respect to the Purchased Assets
        or the operation of the Business and are incurred in or attributable to the
        Pre-Closing Tax Period, the non-payment of which would result in a Lien on
        any
        Purchased Asset, would otherwise have a Material Adverse Effect or would
        result
        in Buyer becoming liable therefor.

       

      (f)  Schedule
        8.02(f)
        contains
        a list of all jurisdictions (whether foreign or domestic) to which any Tax
        is
        properly payable by a Seller with respect to the Purchased Assets or operation
        of the Business.

       

      (g)  None
        of
        the Purchased Assets is “tax exempt use property” within the meaning of Section
        168(h) of the Code. None of the Purchased Assets is a lease made pursuant
        to
        Section 168(f)(8) of the Internal Revenue Code of 1954.

       

      
        
           

        

        
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      8.03.  Tax
        Cooperation; Allocation of Taxes.

       

      (a)  Buyer
        and
        Sellers shall furnish or cause to be furnished to each other, upon request,
        as
        promptly as practicable, such information and assistance relating to the
        Purchased Assets and the Business as is reasonably necessary for the filing
        of
        all Tax Returns and making of any election related to Taxes, the preparation
        for
        any audit by any governmental authority, and the prosecution or defense of
        any
        claim, suit or proceeding relating to any Tax Return. Sellers and Buyer shall
        cooperate with each other in the conduct of any audit or other proceeding
        related to Taxes involving the Business or the Purchased Assets and each
        shall
        execute and deliver such powers of attorney and other documents as are necessary
        to carry out the intent of this paragraph (a) of Section 8.03.
        In
        addition, Buyer and Sellers shall maintain or arrange for the maintenance
        of all
        records necessary to comply with this Section 8.03 for a period of seven
        (7)
        years from the Closing Date (or such longer period as may be reasonably
        requested in writing by Buyer or Sellers) and each party shall afford the
        other
        reasonable access to such records during normal business hours.

       

      (b)  All
        real
        property Taxes, personal property Taxes and similar ad valorem obligations
        levied with respect to the Purchased Assets for a taxable period which includes
        (but does not end on) the Closing Date (collectively, the “Apportioned
        Obligations”)
        shall
        be apportioned between Sellers and Buyer as of the Closing Date based on
        the
        number of days of such taxable period included in the Pre-Closing Tax Period
        and
        the number of days of such taxable period included in the Post-Closing Tax
        Period, equitably adjusted if necessary to reflect changes in taxable assets
        as
        between the Pre-Closing Period and Post-Closing Period or portions thereof.
        Sellers shall be liable for the proportionate amount of such Taxes that is
        attributable to the Pre-Closing Tax Period. Within 90 days after the
        Closing, Sellers and Buyer shall present a statement to the other setting
        forth
        the amount of reimbursement to which each is entitled under this
        Section 8.03(b) together with such supporting evidence as is reasonably
        necessary to calculate such amount to be reimbursed. Such amount shall be
        paid
        by the party owing it to the other within 10 days after delivery of
        such
        statement. Thereafter, Sellers shall notify Buyer upon receipt of any bill
        for
        real or personal property Taxes relating to the Purchased Assets, part or
        all of
        which are attributable to the Post-Closing Tax Period, and shall promptly
        deliver such bill to Buyer who shall pay the same to the appropriate
        governmental authority; provided that if such bill covers the Pre-Closing
        Tax
        Period, Sellers shall also remit prior to the due date of assessment to Buyer
        payment for the proportionate amount of such bill that is attributable to
        the
        Pre-Closing Tax Period. If either Seller or Buyer shall thereafter make a
        payment for which it is entitled to reimbursement under this
        Section 8.03(b), the other party shall make such reimbursement promptly
        but
        in no event later than 30 days after the presentation of a statement
        setting forth the amount of reimbursement to which the presenting party is
        entitled along with such supporting evidence as is reasonably necessary to
        calculate the amount of reimbursement. Any payment required under this Section
        8.03(b) and not made within 10 days of delivery of the statement shall
        bear
        interest at the rate per annum determined, from time to time, under the
        provisions of Section 6621(a)(2) of the Code for each day until
        paid.

       

      (c)  Any
        transfer, documentary, sales, use, stamp or other Taxes assessed upon or
        with
        respect to the transfer of the Purchased Assets to Buyer and any recording
        or
        filing fees with respect thereto shall be borne and paid by Sellers, and
        Sellers
        shall promptly reimburse Buyer for any such amounts paid by Buyer.

       

      
        
           

        

        
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      (d)  Prior
        to
        the Closing Date, Sellers shall provide Buyer with a clearance certificate
        or
        similar document(s) which may be required by any governmental authority in
        order
        to relieve Buyer of (x) any obligation to withhold any portion of
        the
        Purchase Price and (y) any liability for Taxes (determined without
        regard
        to the provisions of this Agreement assigning responsibility therefor) for
        which
        relief is available by reason of the filing of an appropriate certificate.
        

       

      (e)  No
        new
        elections with respect to Taxes, or any changes in current elections with
        respect to Taxes, affecting the Business or the Purchased Assets shall be
        made
        after the date of this Agreement without the prior written consent of Buyer,
        which consent shall not be unreasonably withheld.

       

      (f)  Buyer
        and
        Sellers agree to file all Tax Returns consistent with the Allocation Statement
        and shall not make any inconsistent written statements or take any inconsistent
        position on any Tax Return, in any refund claim, during the course of any
        U.S.
        Internal Revenue Service (“IRS”)
        audit
        or other Tax audit, for any financial or regulatory purpose, in any litigation
        or investigation or otherwise. Each party shall notify the other parties
        if it
        receives notice that the IRS or other governmental agency proposes any
        allocation different than that set forth in the Allocation
        Statement.

       

      (g)  The
        parties intend to utilize the Alternative Procedure described in Section 5
        of IRS Revenue Procedure 2004-53, 2004-34, I.R.B. 320 with respect to
        Transferred Employees. Pursuant to such intention, Purchaser shall assume
        responsibility for filing and providing to Transferred Employees for the
        calendar year in which Closing occurs Forms W-2 and similar forms
        for
        Transferred Employees. Seller shall provide information and data to Buyer
        upon
        request with respect to wages and payroll taxes for such year in order for
        Buyer
        to file timely and proper returns for such year.

       

      ARTICLE
        IX

       

      EMPLOYEE
        BENEFITS

       

      9.01.  Employee
        Benefits Definitions.
        The
        following terms, as used herein, having the following meaning:

       

      “Benefit
        Arrangement”
        means
        an employment, severance or similar contract, arrangement or policy (written
        or
        oral) and each plan or arrangement providing for severance, insurance coverage
        (including any self-insured arrangements), workers’ compensation, disability
        benefits, supplemental unemployment benefits, vacation benefits, pension
        or
        retirement benefits or for deferred compensation, profit-sharing, bonuses,
        phantom stock, stock appreciation rights or other forms of incentive
        compensation or post-retirement insurance, compensation or fringe benefits
        or
        any co-employment agreement that (a) is not an Employee Plan, (b) is
        entered into, maintained or contributed to, as the case may be, by a Seller
        or
        any of its ERISA Affiliates or any Co-Employer and (c) covers any
        Employee
        or former Employee of a Seller.

       

      
        
           

        

        
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      “Co-Employer”
        means
        any entity that is or was considered to be a co-employer with a
        Seller.

       

      “Employee”
        for
        purposes of this Section IX means any employee of a Seller or an affiliate
        of
        Seller who is employed or engaged in, provides services to, or otherwise
        is
        useful in, or necessary for, the operation of the Business, including any
        employee Co-employed by a Seller and Co-Employer.

       

      “Employee
        Plan”
        means
        each “employee benefit plan,” as such term is defined in Section 3(3) of
        ERISA, that (a) is subject to any provision of ERISA and (b) is
        maintained or contributed to by a Seller or any of their ERISA Affiliates
        or any
        Co-Employer, as the case may be.

       

      “ERISA”
        means
        the Employee Retirement Income Security Act of 1974, as amended.

       

      “ERISA
        Affiliate”
        of any
        entity means any other entity that, together with such entity, would be treated
        as a single employer under Section 414 of the Code or Section 4001
        of
        ERISA.

       

      “Transferred
        Employees”
        means
        those Employees who are offered employment by Buyer and who commence employment
        with Buyer as of the Closing Date.

       

      9.02.  ERISA
        Representations.
        Sellers, jointly and severally, hereby represent and warrant to Buyer
        that:

       

      (a)  Schedule 9.02
        lists
        each Employee Plan that covers any Employee. Parent has previously provided
        to
        Buyer (i) correct and complete copies of all material documents embodying
        or relating to each Employee Plan, including all amendments thereto and material
        written interpretations thereof; (ii) the most recent annual actuarial
        valuations, if any, prepared for each Employee Plan; (iii) the three
        most
        recent annual reports (Series 5500 and all schedules thereto), if
        any,
        required under ERISA or the Code in connection with each Employee Plan or
        related trust; (iv) if the Employee Plan is funded, the most recent
        annual
        and periodic accounting of Employee Plan assets; (v) the most recent
        summary plan description together with the most recent summary of material
        modifications, if any, with respect to each Employee Plan; (vi) all IRS
        determination, opinion, notification and advisory letters and rulings relating
        to Employee Plans and copies of all applications and correspondence to or
        from
        the IRS, DOL or any other Governmental Entity with respect to any Employee
        Plan;
        (vii) all material written agreements and contracts relating to each
        Employee Plan, including but not limited to fidelity or ERISA bonds,
        administrative service agreements, group annuity contracts and group insurance
        contracts; (viii) all communications material to any Employee or Employees
        relating to any Employee Plan and any proposed Employee Plans, in each case
        relating to any amendments, terminations, establishments, increases or decreases
        in benefits, acceleration of payments or vesting schedules or other events
        which
        would result in any material liability to a Seller and which are not reflected
        in the current summary plan description and plan document; (ix) all
        forms
        and notices relating to the provision of post-employment continuation of
        health
        coverage; (x) all policies pertaining to fiduciary liability insurance
        covering the fiduciaries of each Employee Plan; and (xi) all discrimination
        and
        qualification tests, if any, for each Employee Plan for the most recently
        completed plan year. Except as set forth in Schedule
        9.02,
        with
        respect to each Employee Plan, all annual reports (Form 5500) required to
        be
        filed with the Internal Revenue Service or Department of Labor have been
        properly filed on a timely basis.

       

      
        
           

        

        
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      (b)  Schedule
        9.02
        also
        includes a list of each Benefit Arrangement of a Seller, copies or descriptions
        of which have been made available or furnished previously to Buyer.

       

      (c)  Except
        as
        set forth in Schedule
        9.02,
        none of
        the Employee Plans or Benefit Arrangements listed on Schedule 9.02
        is
        subject to the laws of any jurisdiction outside the United States.

       

      (d)  No
        non-exempt “prohibited transaction,” as defined in Section 406 of ERISA or
        Section 4975 of the Code, has occurred with respect to any Employee
        Plan.

       

      (e)  No
        Seller
        nor any ERISA Affiliate maintains or has ever maintained or contributed to
        or
        incurred or expects to incur liability with respect to any Multiemployer
        Plan as
        defined in Section 4001(a)(3) of ERISA, a Multiple Employer Plan as defined
        in
        Section 210 of ERISA, or a Plan subject to Title IV of ERISA or Section 412
        of
        the Code. No Seller nor any ERISA Affiliate has incurred nor does it reasonably
        expect to incur any liability with respect to any transaction described in
        Section 4069 of ERISA.

       

      (f)  Each
        Employee Plan which is intended to be qualified under Section 401(a)
        of the
        Code is so qualified and has been so qualified during the period from its
        adoption to date, and each trust forming a part thereof is exempt from tax
        pursuant to Section 501(a) of the Code. Each Employee Plan and Benefit
        Arrangement has been maintained in compliance in all material respects with
        its
        terms and with the applicable requirements prescribed by any and all statutes,
        orders, rules and regulations.

       

      (g)  With
        respect to the Employees and former Employees, there are no employee
        post-retirement health or welfare plans in effect, except as required by
        Section 4980B of the Code or applicable state law. No tax under
        Section 4980B or 4980D of the Code has been incurred in respect of
        any
        Employee Plan that is a group health plan, as defined in Section 5000(b)(1)
        of
        the Code.

       

      (h)  All
        contributions, reserves or premium payments accrued under each Employee Plan
        and
        Benefit Arrangement have been made as of the Closing Date or are reflected
        on
        the Closing Balance Sheet.

       

      (i)  No
        Employee will become entitled to any bonus, retirement, severance or similar
        benefit or enhanced benefit solely as a result of the transactions contemplated
        hereby.

       

      9.03.  Employees
        and Offers of Employment.

       

      (a)  On
        or
        prior to the Closing Date, Buyer may, at its sole discretion, offer employment
        on such terms and conditions as it determines in its sole discretion and
        on an
        at-will basis, to some or all of the Employees. No Seller has made any
        representation or assurance to any Employee about whether he or she will
        receive
        an offer of employment and/or about any terms or conditions of employment
        Buyer
        may offer. Buyer will cooperate with Sellers in connection with Sellers’
        negotiations with certain members of senior management of the Business to
        waive
        or otherwise modify such persons’ entitlement to severance payments from
        Sellers.

       

      
        
           

        

        
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      (b)  Sellers
        agree to (i) use commercially reasonable efforts to cooperate with
        Buyer in
        Buyer’s recruitment of the Employees, (ii) terminate the employment of the
        Employees who have accepted Buyer’s offer of employment, on or immediately prior
        to the Closing Date and to pay any and all accrued liabilities with respect
        to
        each Transferred Employee, including, but not limited to, all such liabilities
        relating to such termination, including, without limitation any payments
        and
        benefits due such Transferred Employees pursuant to accrued salary and wages,
        bonuses, commissions, pension, retirement, savings, health, welfare and other
        benefits and severance payments or similar payments of the Transferred
        Employees, and (iii) provide to each Transferred Employee any notice
        (which
        notice shall be reasonably acceptable to Buyer) required under any law or
        regulations in respect of such termination including, without limitation,
        the
        Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
        (“COBRA”),
        and
        the Federal Workers Adjustment and Retraining Notification Act (“WARN
        Act”).
        

       

      (c)  Sellers
        shall use their commercially reasonable efforts to assist Buyer in obtaining
        from the Transferred Employees executed assignment of inventions,
        confidentiality and noncompetition (if applicable) agreements in form
        satisfactory to Buyer.

       

      9.04.  No
        Third Party Beneficiaries.
        No
        provision of this Article IX or any other provision in this Agreement shall
        create any third party beneficiary or other rights in any employee or former
        employee (including any beneficiary or dependent thereof) of a Seller in
        respect
        of continued employment (or resumed employment) with either Buyer or the
        Business or any of their Affiliates and no provision of this Article IX
        shall create any such rights in any such Persons in respect of any benefits
        that
        may be provided, directly or indirectly, under any Employee Plan or Benefit
        Arrangement or any plan or arrangement that may be established by Buyer or
        any
        of its Affiliates. No provision of this Agreement shall constitute a limitation
        on rights to amend, modify or terminate after the Closing Date any such plans
        or
        arrangements of Buyer or any of its Affiliates.

       

      ARTICLE
        X

       

      CONDITIONS
        TO CLOSING

       

      10.01.  Conditions
        to the Obligations of Each Party.
        The
        obligations of Buyer and Sellers to consummate the Closing are subject to
        the
        satisfaction of the following conditions:

       

      (a)  No
        provision of any applicable law or regulation and no judgment, injunction,
        order
        or decree shall prohibit the consummation of the Closing.

       

      (b)  Approval
        of the Asset Sale by the requisite vote of the Parent’s
        stockholders.

       

      
        
           

        

        
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      10.02.  Conditions
        to the Obligations of Buyer.
        The
        obligation of Buyer to consummate the Closing is subject to the satisfaction
        of
        the following further conditions, any of which may be waived by Buyer in
        writing:

       

      (a)  (i)
        There
        shall not have occurred any change concerning, or other event affecting,
        any
        Sellers or the Business that, individually or in the aggregate, has had or
        could
        reasonably be expected to have, a Material Adverse Effect, (ii) each Seller
        shall have performed in all material respects all of its obligations hereunder
        required to be performed by it on or before the Closing Date, (iii) the
        representations and warranties of Sellers contained in this Agreement at
        the
        time of execution and delivery and in any certificate or other writing delivered
        by any Seller pursuant hereto, disregarding all qualifications and exceptions
        contained therein relating to materiality or Material Adverse Effect, shall
        be
        true and correct in all material respects at and as the date of this Agreement
        and as of the Closing Date, as if made at and as of such date and
        (iv) Buyer shall have received a certificate signed by the President
        and
        Chief Executive Officer of each Seller to the foregoing effect.

       

      (b)  No
        court,
        arbitrator or governmental body, agency or official shall have issued any
        order,
        and there shall not be any statute, rule or regulation, restraining the
        effective operation by Buyer of all or any portion of the Purchased Assets
        after
        the Closing Date and no proceeding challenging this Agreement or the
        transactions contemplated hereby or seeking to prohibit, alter, prevent or
        delay
        the Closing shall have been instituted by any Person before any court,
        arbitrator or governmental body, agency or official and be pending.

       

      (c)  Buyer
        shall have received an opinion of Arent Fox PLLC, dated the Closing Date
        with
        respect to such matters as listed on Exhibit
        C.

       

      (d)  Sellers
        shall have received all of the Required Consents listed on Schedule 10.02(d)
        and
        delivered same to Buyer.

       

      (e)  Sellers
        shall have delivered to Buyer the tax clearance certificates identified in
        Section 5.12 and such other clearance certificates or similar document(s)
        which
        may be required by any Tax authority to relieve Buyer of (x) any obligation
        to withhold Taxes in connection with the transactions contemplated by this
        Agreement and (y) any liability for Taxes (determining without regard to
        provisions of this Agreement assigning responsibility therefor) for which
        relief
        is available by reason of the filing of an appropriate certificate or other
        document.

       

      (f)  Sellers
        shall have paid all sales and use taxes identified in Schedule 8.02(b)
        and all
        sales, use, transfer, stamp, documentary and other similar Taxes and recording
        and filing fees incurred in connection with the transactions contemplated
        by
        this Agreement. 

       

      (g)  Sellers
        shall have delivered to Buyer payoff letters with respect to the Laurus Debt
        and
        any other Indebtedness of Sellers requested by Buyer and releases of any
        and all
        Liens held by third parties shall have been obtained.

       

      (h)  On
        or
        prior to the Closing Date, Sellers shall have delivered or caused to be
        delivered to Buyer, each of the following:

       

      
        
           

        

        
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      (i)  certified
        copies of the certificate of incorporation and bylaws of each Seller and
        the
        resolutions of each Sellers’ boards of directors and each Seller’s
        stockholder(s) authorizing the execution, delivery and performance of this
        Agreement and the Ancillary Agreements and approving the consummation of
        the
        transactions contemplated hereby and thereby;

       

      (ii)  certificates
        of the secretary of state of the jurisdiction(s) in which Sellers are
        incorporated and each jurisdiction where a Seller is qualified to do business
        stating that such Seller is in good standing; and

       

      (iii)  such
        other documents or instruments as Buyer may reasonably request to effect
        the
        transactions contemplated hereby.

       

      (i)  Parent
        shall prepare and shall have delivered to Buyer no less than three (3) business
        days prior to the Closing Date a balance sheet reflecting the consolidated
        assets and liabilities of the Business estimated as of the Closing Date (the
        “Closing
        Balance Sheet”);

       

      (j)  Sellers
        shall have executed and delivered to Buyer the Transition Services Agreement
        and
        any other documents in connection therewith;

       

      (k)  On
        or
        prior to the Closing Date, Sellers shall have filed the requisite documents
        with
        the applicable government agencies to cause the change of corporate name
        of each
        Seller and their Affiliates in accordance Section 5.07 and shall have delivered
        to Buyer evidence satisfactory to Buyer of such name changes.

       

      (l)  Sellers
        shall have paid, or caused to be paid, all accrued liabilities with respect
        to
        the Transferred Employees in accordance with Section 9.03 and shall have
        delivered to Buyer evidence
        satisfactory to Buyer of such payment.

       

      (m)  Before
        the Closing Date, all of the Purchased Assets owned or held by any Transferring
        Affiliate shall have been properly assigned, transferred and delivered to
        ASOC
        and evidence thereof satisfactory to Buyer’s counsel shall have been delivered
        to Buyer. 

       

      (n)  Axeda
        Systems Limited shall have taken such action requested by Buyer, or Buyer’s
        counsel, to allow Buyer (or an affiliate thereof) to hire the Transferred
        Employees of Axeda Systems Limited, including releasing such Transferred
        Employees from their employment with, and any noncompetition obligations
        in
        favor of, Axeda Systems Limited.

       

      (o)  No
        event
        shall have occurred, and no circumstance or condition exists, that (with
        or
        without notice or lapse of time) will, or could reasonably be expected to,
        result in the delivery, license, or disclosure of the source code for any
        Seller
        Software to any other Person without Buyer’s express written
        consent.

       

      10.03.  Conditions
        to Obligations of Sellers.
        The
        obligation of Sellers to consummate the Closing is subject to the satisfaction
        of the following further conditions, any of which may be waived by Parent
        in
        writing:

       

      
        
           

        

        
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      (a)  (i)
        Buyer
        shall have performed in all material respects all of its obligations hereunder
        required to be performed by it at or prior to the Closing Date, (ii) the
        representations and warranties of Buyer contained in this Agreement at the
        time
        of its execution and delivery and in any certificate or other writing delivered
        by Buyer pursuant hereto, disregarding all qualifications and exceptions
        contained therein relating to materiality or Material Adverse Effect, shall
        be
        true and correct in all material respects at and as of the Closing Date,
        as if
        made at and as of such date and (iii) Parent shall have received a
        certificate signed by the President and Chief Executive Officer of Buyer
        to the
        foregoing effect.

       

      (b)  Buyer
        shall have received all consents, authorizations or approvals from governmental
        agencies referred to in Section 4.03, in each case in form and substance
        reasonably satisfactory to Seller, and no such consent, authorization or
        approval shall have been removed or revoked.

       

      (c)  Buyer
        shall have executed and delivered to Sellers the Transition Services
        Agreement.

       

      (d)  Each
        of
        the waivers, dated as of the date hereof, between Parent and each Employee
        identified in Schedule
        10.03(d)
        shall
        have become effective in accordance with its terms.

       

      ARTICLE
        XI

       

      SURVIVAL;
        INDEMNIFICATION

       

      11.01.  Survival.
        The
        representations and warranties of the parties contained in this Agreement,
        the
        Ancillary Agreements or in any certificate or other writing delivered pursuant
        hereto or thereto or in connection herewith or therewith shall survive the
        Closing until the first anniversary of the Closing Date, except: (i) in the
        case
        of Sections 3.14 and 3.18 which shall survive the Closing until the fifth
        anniversary of the Closing Date; (ii) in the case of the representations
        and
        warranties contained in Articles VIII and IX, which shall survive the Closing
        until 180 days after the expiration of the statutory period of limitations
        applicable to third party claims pertaining to such matters, if later (giving
        effect to any waiver, mitigation or extension thereof); and (iii) in the
        case of
        Sections 3.02, 3.03, 3.04, 3.10, 3.22 and 4.02, which shall survive the Closing
        in perpetuity. All covenants and agreements contained in this Agreement,
        the
        Ancillary Agreements or in any certificate or other writing delivered pursuant
        hereto or thereto or in connection herewith or therewith shall survive the
        Closing and shall continue to remain in full force and effect in perpetuity
        after the Closing Date, unless they terminate earlier in accordance with
        their
        express terms.

       

      11.02.  Indemnification.

       

      (a)  Sellers
        shall, jointly and severally, indemnify, defend and hold harmless Buyer and
        its
        Affiliates and
        each
        of their respective officers, directors, employees, stockholders, agents
        and
        representatives (collectively,
        the “Buyer
        Indemnified Parties”)
        from
        and
        against:

       

      
        
           

        

        
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      (i)  any
        Loss
        suffered or incurred
        by, or asserted against, any
        Indemnified Party
        that is
        attributable to, is based upon, is caused by, results from, or in any way
        arises
        from:

       

      (A)  any
        inaccuracy in or breach of any representation or warranty of Sellers contained
        in this Agreement, the Ancillary Agreements or in any certificate or other
        writing delivered pursuant hereto or thereto or in connection herewith or
        therewith (other than the representations and warranties contained in Articles
        VIII and IX), and any claim, action, suit or proceeding by any third party
        alleging facts that if proven true would constitute any inaccuracy in or
        breach
        of any such representation or warranty of Sellers; 

       

      (B)  any
        inaccuracy in or breach of any representation or warranty of Sellers contained
        in Articles VIII and IX, and any claim, action, suit or proceeding by any
        third
        party alleging facts that if proven true would constitute a any inaccuracy
        in or
        breach of any such representation or warranty of Sellers; 

       

      (C)  any
        breach, or failure to perform, by any Seller of any of their respective
        obligations, covenants or agreements set forth in this Agreement, the Ancillary
        Agreements or in any certificate or other writing delivered pursuant hereto
        or
        thereto or in connection herewith or therewith; 

       

      (D)  any
        Excluded Liability; 

       

      (E)  any
        failure to comply with applicable bulk sales laws in connection with the
        sale
        and transfer of the Purchased Assets to Buyer; and

       

      (F)  any
        claims by employees or former employees of the Business arising out of or
        in
        connection with their employment relationship with Sellers or any of their
        Affiliates or the termination of such employment relationship; and

       

      (ii)  any
        and
        all notices, actions, suits, litigations, arbitrations, proceedings,
        investigations or claims arising out of or incident to any and all Losses
        or any
        of the foregoing.

       

      (b)  Buyer
        shall indemnify, defend and hold harmless Sellers and their respective
        Affiliates and
        each
        of their respective officers, directors, employees, stockholders, agents
        and
        representatives (collectively,
        the “Seller
        Indemnified Parties”;
        and
        together with the Buyer Indemnified Parties, the “Indemnified
        Parties”)
        from
        and
        against:

       

      (i)  any
        Loss
        suffered or incurred
        by, or asserted against, any
        Indemnified Party
        that is
        attributable to, is based upon, is caused by, results from, or in any way
        arises
        from:

       

      (A)  any
        inaccuracy in or breach of any representation or warranty of Buyer contained
        in
        this Agreement, the Ancillary Agreements or in any certificate or other writing
        delivered pursuant hereto or thereto or in connection herewith or therewith,
        and
        any claim, action, suit or proceeding by any third party alleging facts that
        if
        proven true would constitute a any inaccuracy in or breach of any such
        representation or warranty of Buyer; 

       

      
        
           

        

        
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      (B)  any
        breach, or failure to perform, by Buyer of any of Buyer’s obligations, covenants
        or agreements set forth in this Agreement, the Ancillary Agreements or in
        any
        certificate or other writing delivered pursuant hereto or thereto or in
        connection herewith or therewith; 

       

      (C)  any
        Assumed Liability; and

       

      (D)  any
        and
        all notices, actions, suits, litigations, arbitrations, proceedings,
        investigations or claims arising out of or incident to any of the
        foregoing.

       

      11.03.  Limitations.
        Notwithstanding anything to the contrary in this Agreement, the obligations
        and
        liabilities of Sellers and Buyer under this Article XI shall be subject to
        the
        following limitations:

       

      (a)  The
        obligations of the Sellers and Buyer for indemnification under
        Sections 11.02(a)(i)(A) and (B) and Section 11.02(b)(i)(A),
        respectively, shall terminate on expiration of the applicable survival periods
        described in Section 11.01, except for matters as to which any Indemnified
        Party has made a claim for indemnity or given written notice of a possible
        claim
        for indemnity on or prior to such date, which shall survive the expiration
        of
        such period until such claim is finally resolved in accordance with the terms
        of
        this Agreement and any obligations with respect thereto are fully
        satisfied.

       

      (b)  Sellers
        shall not be liable to the Buyer Indemnified Parties for any Loss under
        Section 11.02(a)(i)(A) unless the aggregate amount for which Sellers
        would
        otherwise (but for this Section 11.03(b)) be liable on account thereof
        exceeds in the aggregate $50,000. Buyer shall not be liable to the Seller
        Indemnified Parties for any Loss under Section 11.02(b)(i)(A) unless
        the
        aggregate amount for which Buyer would otherwise (but for this
        Section 11.03(b)) be liable on account thereof exceeds in the aggregate
        $50,000. If and when such Losses do exceed this amount, the indemnifying
        party
        shall indemnify the Indemnified Parties fully for the entire amount of all
        such
        Losses, including the portion below $50,000.

       

      (c)  Sellers
        shall only be liable for indemnification under Sections 11.02(a)(i)(A)
        up
        to an aggregate amount equal to the Purchase Price.

       

      11.04.  Procedures.

       

      (a)  Any
        Indemnified Party seeking indemnification under this Article XI shall give
        prompt written notice to the persons against whom indemnification is sought
        (the
“Indemnifying
        Party”)
        of the
        assertion of any claim by a third party or the discovery of any fact upon
        which
        the Indemnified Party intends to base a claim under this Article XI. The
        delay
        or failure of any Indemnified Party to provide notice hereunder shall not
        in any
        way limit its indemnification rights hereunder except to the extent that
        the
        Indemnifying Party demonstrates that its ability to defend or resolve such
        claim
        is actually and materially prejudiced thereby. Any such notice shall describe
        the facts and circumstances upon which the asserted claim for indemnification
        is
        based and shall include the amount of the indemnifiable Losses (or, if such
        amount is not then determined, a good faith estimate thereof) and the basis
        for
        the determination of the amount of such Losses.

       

      
        
           

        

        
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      (b)  With
        respect to a third-party claim: 

       

      (i)  The
        Indemnifying Party may, if applicable, and at the request of the Indemnified
        Party shall, participate in and control the defense of any third-party claim
        at
        its own expense. If the Indemnifying Party elects to assume the defense (whether
        or not obligated to) of any such claim, the Indemnified Party may participate
        in
        such defense, but in such case the expenses of the Indemnified Party shall
        be
        paid by the Indemnified Party. If the Indemnifying Party shall fail to defend
        a
        third-party claim or, if after commencing or undertaking any such defense,
        shall
        fail to prosecute or shall withdraw from such defense, the Indemnified Party
        shall have the right to undertake the defense thereof at the Indemnifying
        Party’s expense. Notwithstanding the foregoing, if the Indemnifying Party
        assumes the defense of a third-party claim and if the Indemnified Party later
        determines in good faith that the third-party claim is (x) likely to materially
        adversely affect it or its business in a manner that may not be adequately
        compensated by money damages or (y) may expose the Indemnified Party to
        potential obligations or Losses that may not be fully satisfied by the
        Indemnifying Party, then the Indemnified Party may, by written notice to
        the
        Indemnifying Party, assume the exclusive right to defend, compromise, or
        settle
        such claim. If the Indemnified Party shall so assume the exclusive right
        to
        defend, compromise, or settle such claim, all attorneys’ fees and other expenses
        incurred by the Indemnified Party in the defense, compromise or settlement
        of
        such claim shall be at the Indemnifying Party’s expense. 

       

      (ii)  The
        party
        controlling the defense of any third-party suit, action or proceeding shall
        keep
        the other party advised of the status of such action, suit or proceeding
        and the
        defense thereof and shall consider in good faith recommendations made by
        the
        other party with respect thereto.

       

      (iii)  The
        Indemnifying Party shall not settle any third-party claim without the consent
        (which consent shall not be unreasonably withheld or delayed) of the Indemnified
        Party if any relief, other than the payment of money damages which the
        Indemnifying Party shall be obligated to pay in full, would be granted against
        the Indemnified Party or its Affiliates by such settlement or if the Indemnified
        Party would be liable to the third party for any portion of such settlement.
        

       

      11.05.  No
        Waiver.
        All
        representations, warranties, covenants and agreements of Sellers and Buyer
        made
        in this Agreement (as modified by the disclosure schedules attached hereto)
        shall be deemed to have been relied upon by the party or parties to this
        Agreement to whom they are made, and shall survive the Closing as provided
        in
        Sections 11.01 regardless of any investigation or knowledge of any facts,
        circumstances or events on the part of such party or its representatives,
        and
        each party hereby expressly reserves their respective rights to rely on,
        enforce
        and seek redress with respect to any breach of or non-compliance with any
        such
        representations, warranties, covenants and agreements regardless of any
        investigation or knowledge of any facts, circumstances or events on the part
        of
        such party or its representatives (other than in respect of such facts,
        circumstances or events disclosed in such disclosure schedules), in each
        case
        subject to the limitations set forth in this Article XI. No waiver of a closing
        condition by Buyer or Sellers shall limit the respective rights of the parties
        under this Article XI.

       

      
        
           

        

        
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      11.06.  Purchase
        Price Adjustment.
        All
        indemnification payments made under this Agreement shall be treated as
        adjustments to the Purchase Price.

       

      11.07.  Exclusive
        Remedies.
        Except
        for fraud, intentional misrepresentation and other remedies that cannot be
        waived as a matter of law, and except for equitable remedies, the remedies
        set
        forth in this Article XI shall be the sole and exclusive remedies of the
        parties
        to this Agreement under this Agreement from and after the Closing with respect
        to any misrepresentation or breach of warranty, or any breach of or failure
        to
        perform any covenant to be performed prior to the Closing by any party under
        this Agreement.

       

      ARTICLE
        XII

       

      TERMINATION

       

      12.01.  Grounds
        for Termination.
        This
        Agreement may be terminated at any time prior to the Closing:

       

      (a)  by
        written agreement of Buyer and Parent;

       

      (b)  by
        either
        Buyer or Parent if the Closing shall not have been consummated on or before
        December 15, 2005; provided that such termination right shall not be available
        to a party that has failed to fulfill its obligations under this Agreement
        or
        whose acts or omissions have been a significant cause of the Closing not
        occurring on or before such date;

       

      (c)  by
        either
        Parent or Buyer if there shall be any law or regulation that makes consummation
        of the transactions contemplated hereby illegal or otherwise prohibited or
        if
        consummation of the transactions contemplated hereby would violate any
        nonappealable final order, decree or judgment of any court or governmental
        body
        having competent jurisdiction;

       

      (d)  by
        Buyer
        (provided that it is not then in material breach of any representation,
        warranty, covenant or agreement contained in this Agreement) by means of
        a
        written notice to Parent if there has been (i) a material breach by
        any
        Seller of any representation, warranty, covenant or agreement set forth in
        this
        Agreement, which breach (A) would result in a failure to satisfy the closing
        conditions contained in Section 10.02(a) and (B) has not been cured within
        five
        business days following receipt by Parent of notice of such breach or (ii)
        a
        Material Adverse Change;

       

      (e)  by
        Parent
        (provided that none of the Sellers is then in material breach of any
        representation, warranty, covenant or agreement contained in this Agreement)
        by
        means of a written notice to Buyer if there has been a material breach by
        any
        Buyer of any representation, warranty, covenant or agreement set forth in
        this
        Agreement, which breach (A) would result in a failure to satisfy the
        closing conditions contained in Section 10.03(a) and (B) has not been cured
        within five business days following receipt by Buyer of notice of such breach;
        

       

      
        
           

        

        
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      (f)  by
        Buyer,
        if (i) the Parent Board (or any committee thereof) shall have failed to make
        in
        the Proxy Statement, or shall have withdrawn, modified, amended or qualified
        in
        a manner adverse to Buyer, its approval or recommendation of this Agreement,
        the
        Asset Sale or any of the transactions contemplated hereby; or (ii) the Parent
        Board shall have (x) recommended that the stockholders of Parent accept or
        approve an Acquisition Proposal, or (y) failed to recommend that the
        stockholders of Seller reject or not accept an Acquisition Proposal (or the
        Seller Board shall have resolved to take any such action); or

       

      (g)  by
        either
        Buyer or Parent, if this Agreement, the Asset Sale and the other transactions
        contemplated hereby shall have failed to receive the requisite vote for approval
        and adoption by the Parent’s stockholders upon the holding of a duly convened
        Stockholders Meeting or any adjournment thereof.

       

      The
        party
        desiring to terminate this Agreement pursuant to this Section 12.01 shall
        give
        notice of such termination to the other parties. Notwithstanding anything
        to the
        contrary in this Agreement, neither Parent nor any Seller may terminate this
        Agreement unless prior thereto or concurrently therewith Sellers shall have
        paid
        or caused to be paid all amounts required to be paid by Section 12.02(b),
        (c)
        and (d) in accordance with Section 12.02, and such termination of this Agreement
        by Parent or any Seller shall not be effective unless and until such amounts
        shall have been paid in full in accordance with Section 12.02.

       

      12.02.  Effect
        of Termination.

       

      (a)  If
        this
        Agreement is terminated as permitted by Section 12.01, such termination
        shall be without liability of any party (or any shareholder, director, officer,
        employee, agent, consultant or representative of such party) to any other
        party
        to this Agreement; provided
        that
        (i) if such termination shall result from the willful failure of any
        Seller
        to fulfill a condition to the performance of the obligations of any party
        or to
        perform a covenant of this Agreement or from a willful breach of any
        representation or warranty by any Seller, Sellers shall be fully liable for
        any
        and all Losses incurred or suffered by Buyer as a result of such failure
        or
        breach, (ii) if such termination shall result from the willful failure
        of
        Buyer to fulfill a condition to the performance of the obligations of any
        party
        or to perform a covenant of this Agreement or from a willful breach of any
        representation or warranty by Buyer to this Agreement, Buyer shall be fully
        liable for any and all Losses incurred or suffered by Sellers as a result
        of
        such failure or breach, and (iii) Sellers shall be required to make
        any
        payments to Buyer as are required pursuant to Sections 12.02(b) and/or (c).
        The
        provisions of Sections 5.06 (Confidentiality), 13.03 (Expenses), 13.10
        (Jurisdiction), 13.11 (Waiver of Jury Trial) and this Section 12.02
        shall
        survive any termination hereof pursuant to Section 12.01.

       

      (b)  If
        at any
        time on and after June 29, 2005 any Seller receives an Acquisition Proposal
        and
        this Agreement is terminated for any reason other than for the reasons set
        forth
        in Sections 12.01(e) or 12.01(g), then Sellers shall pay to JMI Management,
        Inc.
        an amount in cash equal to Five Hundred Thousand Dollars
        ($500,000).

       

      
        
           

        

        
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      (c)  Upon
        termination of this Agreement for any reason, Sellers shall immediately repay
        in
        full all amounts owing under the Bridge Loans and Sellers shall reimburse
        Buyer
        and JMI Management, Inc. for all of their reasonable fees and expenses for
        legal, accounting and financial advisory services incurred in connection
        with
        the transactions contemplated by this Agreement and the Ancillary
        Agreements.

       

      (d)  All
        amounts due under subsections (b) and (c) of this Section 12.02 shall be
        paid in
        immediately available funds as soon as practicable but in any event within
        five
        business days after termination of this Agreement. The parties acknowledge
        and
        agree that the provisions for payment of the amounts under this Section 12.02
        are an integral part of the transactions contemplated by this Agreement and
        are
        included herein in order to induce Buyer to enter into this Agreement.
        Notwithstanding anything to the contrary set forth in this Agreement, if
        Sellers
        fail to pay promptly to Buyer and JMI the amounts due under this Section
        12.02,
        Sellers shall reimburse Buyer on demand for all costs and expenses (including
        legal fees and expenses) incurred in connection with any action, including
        any
        legal action, taken to collect payment of such amounts.

       

      ARTICLE
        XIII

       

      MISCELLANEOUS

       

      13.01.  Notices.
        All
        notices, requests, demands or other communications that are required or may
        be
        given pursuant to the terms of this Agreement shall be in writing and shall
        be
        deemed to have been duly given: (a) on the date of delivery, if personally
        delivered by hand, (b) upon the third day after such notice is deposited
        in
        the United States mail, if mailed by registered or certified mail, postage
        prepaid, return receipt requested, (c) upon the date scheduled for
        delivery
        after such notice is sent by a nationally recognized overnight express courier
        or (d) by fax upon written confirmation (including the automatic
        confirmation that is received from the recipient’s fax machine) of receipt by
        the recipient of such notice:

       

      
        	
                if
                  to Buyer, to:

                 

                c/o
                  JMI Management, Inc.

                1119
                  St. Paul Street

                Baltimore,
                  MD 21202

                Attention:
                  Bradford Woloson

                Telecopy:
                  410-385-2641

              	
                with
                  a copy to:

                 

                Goodwin
                  Procter LLP

                53
                  State Street 

                Boston,
                  MA 02109

                Attention:
                  Mark H. Burnett

                Telecopy:
                  (617) 523-1231

              
	 	 
	
                if
                  to Sellers, to:

                 

                Axeda
                  Systems Inc.

                21
                  Oxford Road

                Mansfield,
                  MA 02048

                Attention:
                  Karen F. Kupferberg

                Telecopy:
                  (508) 337-9201

              	
                with
                  a copy to:

                 

                Arent
                  Fox PLLC

                1675
                  Broadway

                34th
                  Floor

                New
                  York, NY 10019

                Attention:
                  Steven D. Dreyer

                Telecopy:
                  (212) 484-3990

              

      

       

      
        
           

        

        
          -61-

          
            

          

        

        
           

        

      

      13.02.  Amendments;
        No Waivers.

       

      (a)  Any
        provision of this Agreement may be amended prior to the Closing Date if,
        and
        only if, such amendment is in writing and signed by Buyer and Sellers. Any
        provision of this Agreement may be waived by Buyer and Sellers if the waiver
        is
        in writing and signed by the parties to be bound.

       

      (b)  No
        failure or delay by either party in exercising any right, power or privilege
        hereunder shall operate as a waiver thereof nor shall any single or partial
        exercise thereof preclude any other or further exercise thereof or the exercise
        of any other right, power or privilege. The rights and remedies herein provided
        shall be cumulative and not exclusive of any rights or remedies provided
        by
        law.

       

      13.03.  Expenses.
        Except
        as otherwise provided herein, each of the parties shall pay all of its own
        fees,
        costs and expenses (including, without limitation, fees, costs and expenses
        of
        legal counsel, investment bankers, brokers or other representatives and
        consultants and appraisal fees, costs and expenses) incurred in connection
        with
        the negotiation of the Letter of Intent, this Agreement, the Ancillary
        Agreements, the performance of its obligations hereunder and thereunder,
        and the
        consummation of the transactions contemplated hereby and thereby. 

       

      13.04.  Successors
        and Assigns.
        The
        provisions of this Agreement shall be binding upon and inure to the benefit
        of
        the parties hereto and their respective successors and assigns.

       

      13.05.  Governing
        Law.
        This
        Agreement and the Ancillary Agreements shall be construed in accordance with
        and
        governed by the laws of the Commonwealth of Massachusetts, without regard
        to the
        conflicts of law rules of such state.

       

      13.06.  Counterparts;
        Effectiveness.
        This
        Agreement may be signed in any number of counterparts, each of which shall
        be an
        original, with the same effect as if the signatures thereto and hereto were
        upon
        the same instrument. This Agreement shall become effective when each party
        hereto shall have received a counterpart, or facsimile of a counterpart,
        of each
        of the Agreement and Ancillary Agreements, each signed by the other party
        or
        parties hereto or thereto. Delivery of an executed copy of this Agreement
        by
        facsimile transmission shall have the same effect as delivery of an originally
        executed copy of this Agreement, whether an originally executed copy shall
        be
        delivered subsequent thereto.

       

      
        
           

        

        
          -62-

          
            

          

        

        
           

        

      

      13.07.  Entire
        Agreement.
        The
        Disclosure Schedules and Exhibits identified in this Agreement are incorporated
        herein by reference. This Agreement, the Ancillary Agreements and the Mutual
        Non-Disclosure Agreement, dated May 16, 2005, between Parent and JMI,
        constitute the entire agreement between the parties with respect to the subject
        matter hereof and supersede all prior agreements, understandings and
        negotiations, both written and oral, between the parties with respect to
        the
        subject matter hereof. No representation, inducement, promise, understanding,
        condition or warranty not set forth herein has been made or relied upon by
        either party hereto. None of the provisions of this Agreement and the Ancillary
        Agreements is intended to confer upon any Person other than the parties hereto
        any rights or remedies hereunder. 

       

      13.08.  Bulk
        Sales Laws.
        Buyer
        and Seller each hereby waive compliance by Seller with the provisions of
        the
“bulk sales,”“bulk transfer” or similar laws of any state. Seller agrees to
        indemnify and hold Buyer harmless against any and all claims, losses, damages,
        liabilities, costs and expenses incurred by Buyer or any of its Affiliates
        as a
        result of any failure to comply with any such “bulk sales,”“bulk transfer” or
        similar laws.

       

      13.09.  Captions.
        The
        captions herein are included for convenience of reference only and shall
        be
        ignored in the construction or interpretation hereof.

       

      13.10.  Jurisdiction.
        Any
        action or proceeding seeking to enforce any provision of, or based on any
        right
        arising out of, this Agreement shall be brought against any of the parties
        in
        the federal or state courts located in the Commonwealth of Massachusetts,
        and
        each of the parties hereby consents to the jurisdiction of such courts (and
        of
        the appropriate appellate courts) in any such action or proceeding and waives
        any objection to venue laid therein. Process in any such action or proceeding
        may be served on any party anywhere in the world, whether within or without
        the
        Commonwealth of Massachusetts. 

       

      13.11.  Waiver
        of Jury Trial.
        EACH
        SELLER AND BUYER HEREBY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
        ANY
        ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR
        OTHERWISE) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
        ANY
        OTHER RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENT
        OR ACTION RELATED HERETO OR THERETO.

       

      13.12.  Specific
        Performance.
        Sellers
        acknowledge that the Business is unique and recognize and affirm that in
        the
        event of a breach of this Agreement by such Person, money damages may be
        inadequate and Buyer may have no adequate remedy at law. Accordingly, Sellers
        agree that Buyer shall have the right, in addition to any other rights and
        remedies existing in its favor, to enforce its rights and Sellers’ obligations
        hereunder not only by an action or actions for damages but also by an action
        or
        actions for specific performance, injunctive and/or other equitable relief.
        If
        any such action is brought by Buyer to enforce this Agreement, Sellers hereby
        waives the defense that there is an adequate remedy at law.

       

      
        
           

        

        
          -63-

          
            

          

        

        
           

        

      

      13.13.  Severability.
        Whenever possible, each provision of this Agreement shall be interpreted
        in such
        manner as to be effective and valid under applicable law, but if any provision
        of this Agreement is held to be prohibited by or invalid under applicable
        law,
        such provision shall be ineffective only to the extent of such prohibition
        or
        invalidity, without invalidating the remainder of such provisions or the
        remaining provisions of this Agreement.

       

      13.14.  Construction.
        The
        language used in this Agreement shall be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rule of strict construction
        shall
        be applied against any person. Nothing in the Disclosure Schedules hereto
        shall
        be deemed adequate to disclose an exception to a representation or warranty
        made
        herein unless the Disclosure Schedule identifies the exception with reasonable
        particularity and describes the relevant facts in reasonable detail. Without
        limiting the generality of the foregoing, the mere listing (or inclusion
        of a
        copy) of a document or other item shall not be deemed adequate to disclose
        an
        exception to a representation or warranty made herein (unless the representation
        or warranty has to do with the existence of the document or other item itself).
        The parties intend that each representation, warranty, and covenant contained
        herein shall have independent significance. If any party has breached any
        representation, warranty, or covenant contained herein in any respect, the
        fact
        that there exists another representation, warranty, or covenant relating
        to the
        same subject matter (regardless of the relative levels of specificity) which
        the
        party has not breached shall not detract from or mitigate the fact that the
        party is in breach of the first representation, warranty, or covenant. In
        addition, each of the parties acknowledges and agrees that any purchase price
        adjustments as a result of the application of any provision of this Agreement
        or
        any Ancillary Agreement do not prejudice or limit in any respect whatsoever
        any
        party’s rights to indemnification under any other provision of this Agreement or
        any Ancillary Agreement, except to the extent that such a recovery would
        result
        in a duplication of damages. The word “including” shall mean including without
        limitation regardless of whether such words are included in some contexts
        but
        not others.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

       

      

       

      
        
          
            

            

          

           

        

        
          -64-

          
            

          

        

      

      IN
        WITNESS WHEREOF, the parties hereto here caused this Agreement to be duly
        executed by their respective authorized officers as of the day and year first
        above written.

       

      
        	
                 

              	
                ASOC
                  ACQUISITION CORP.

                 

                 

                By: 
                  /s/
                  Bradford D. Woloson

                
                  

                

                Name:
                  Bradford D. Woloson

                Title:
                  President

              
	 	 
	
                 

              	
                AXEDA
                  SYSTEMS INC.

                 

                 

                By:  
                  /s/
                  Robert M. Russell Jr.

                
                  

                

                Name:
                  Robert M. Russell Jr.

                Title:
                  Chief Executive Officer

              
	 	 
	
                 

              	
                AXEDA
                  SYSTEMS OPERATING

                COMPANY,
                  INC.

                 

                 

                By: 
                  /s/
                  Karen F. Kupferberg

                
                  

                

                Name:
                  Karen F. Kupferberg

                Title:
                  Chief Financial Officer

              
	 	 
	
                 

              	
                AXEDA
                  IP, INC.

                 

                 

                By:  
                  /s/
                  Lynn Magnani

                
                  

                

                Name:
                  Lynn Magnani

                Title:
                  Secretary

              

      

      

      

      
        
           

        

          -65-

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