Document:

RELEASE

     For and in consideration  of that certain  Enterprise  Engines,  Inc. Stock
Purchase Agreement by and among QAD INC. (the "Purchaser"), DAVID A. TAYLOR (the
"Seller") and ENTERPRISE  ENGINES,  INC. (the "Company") dated December 15, 1999
(the "Stock Purchase Agreement"), Purchaser, Seller and the Company hereby enter
into this Mutual Release.

     1.  Release by Seller.  Seller  does hereby  fully and forever  release and
discharge  the  Purchaser  and the Company,  and any and all  entities  owned or
controlled by any of the foregoing, and all the officers,  directors,  employees
and agents of those entities (collectively,  the "Purchaser Releasees") from and
against any and all claims, causes of action, rights,  damages, costs, losses or
expenses or any other claims, causes of action or rights of any kind whatsoever,
whether known or unknown (collectively,  the "Purchaser Claims") that the Seller
may assert on the basis of facts in  existence  on the date  hereof  against the
Purchaser  Releasees  arising out of, or in any way related to or connected with
the Purchaser Releasees,  provided,  however, that the Purchaser Releasees shall
not be released and discharged of any Purchaser  Claims directly  related to (i)
the Stock  Purchase  Agreement,  (ii) the Promissory  Note,  (ii) the QAD Stock,
(iii)  the  Consulting  Agreement  or (iv) the  Noncompetion  Agreement  (all as
defined in the Stock Purchase Agreement).

     2.  Release by  Purchaser  and the  Company.  Purchaser  and the Company do
hereby fully and forever  release and  discharge the Seller from and against any
and all claims, causes of action, rights,  damages, costs, losses or expenses or
any other  claims,  causes of action or rights of any kind  whatsoever,  whether
known or unknown  (collectively,  the "Seller Claims") that the Purchaser or the
Company may assert on the basis of facts in existence on the date hereof against
the  Seller  arising  out of, or in any way  related  to or  connected  with the
Seller, provided,  however, that the Seller shall not be released and discharged
of any Seller Claims directly related to (i) the Stock Purchase Agreement,  (ii)
the Consulting Agreement or (iii) the Noncompetion  Agreement (all as defined in
the Stock Purchase Agreement).

     3. Section 1542.  Seller,  Purchaser and the Company agree that this Mutual
Release  shall also apply to those types of claims set forth in Section  1542 of
the California Civil Code, which provides:

          "A general  release does not extend to claims which the creditor  does
          not know or suspect to exist in his favor at the time of executing the
          release,  which  if known by him must  have  materially  affected  his
          settlement with the debtor."

     4. No Assignment. Each of Seller, Purchaser and the Company represents that
it has not  assigned  any claims that it may have and is fully able to sign this
Mutual Release.  Each of Seller  Purchaser and the Company further agree that it
has sought independent counsel prior to the execution of this Mutual Release.

<PAGE>

     Executed this 15th day of December, 1999.

                                       PURCHASER:

                                       QAD Inc.

                                       By: /s/ A.J. Moyer
                                           --------------------------------
                                           Name:  Albert J. Moyer
                                           Title:  Chief Financial Officer

                                       SELLER:

                                       /s/ David A. Taylor
                                       -----------------------------------
                                       David A. Taylor

                                       COMPANY:

                                       ENTERPRISE ENGINES, INC.

                                       By: /s/ David A. Taylor
                                          ------------------------------
                                          Name:  David A. Taylor
                                          Title:  President and Chief Executive
                                                  OfficerNON-COMPETITION AGREEMENT

     THIS  NON-COMPETITION  AGREEMENT (the "Agreement") is made and entered into
as of this  15th day of  December,  1999,  by and  among  DAVID A.  TAYLOR  (the
"Seller"),  QAD INC., a Delaware  corporation  (the  "Purchaser") and ENTERPRISE
ENGINES, INC. (the "Company").

                                    RECITALS

     A. The Seller is the legal and beneficial  owner of Two Million One Hundred
Thousand  (2,000,100) shares of common stock, without par value, of the Company,
constituting One Hundred Percent (100%) of the issued and outstanding  shares of
common stock of the Company (the "Shares");

     B. The Purchaser has agreed to purchase the Shares pursuant to the terms of
the Stock Purchase Agreement dated December 15, 1999 (the "Purchase  Agreement")
by and between the Seller, the Purchaser and the Company;

     C. The Company has, is and plans to continue carrying on in the business of
the  Company.  The Company  and its  business,  trademarks  and trade names have
established a favorable reputation and/or recognition throughout the world; and

     D. In order to protect the name,  goodwill  and business of the Company and
as  a  condition  to  and  in  consideration  of  the  execution,  delivery  and
performance of the Purchase Agreement by the Purchaser, the Seller has agreed to
(i) refrain from competing  with the Company or the  Purchaser,  as set forth in
this  Agreement  and (ii) refrain  from making  disparaging  comments  about the
Purchaser or the Company.

     NOW, THEREFORE,  in consideration of the mutual covenants contained herein,
the parties agree as follows:

     1. COMPETITION

     1.1 Agreement Not To Compete.

     (a) The Seller  will  refrain,  for a period of two (2) years from the date
hereof,  either alone or in  conjunction  with any other Person,  or directly or
indirectly through his present or future Affiliates, from:

               (i) employing, engaging or seeking to employ or engage any Person
          who  within  the prior  twelve  (12)  months  had been an  officer  or
          employee of the Company or the Purchaser;

                                       1
<PAGE>

               (ii) causing or attempting  to cause (A) any client,  customer or
          supplier of the Company or the  Purchaser to  terminate or  materially
          reduce its  business  with the  Company or the  Purchaser,  or (B) any
          officer,  employee or  consultant  of the Company or the  Purchaser to
          resign or sever a relationship with the Company or the Purchaser;

               (iii) disclosing  (unless compelled by judicial or administrative
          process) or using any confidential or secret  information  relating to
          the  Company or the  Purchaser,  or any of their  respective  clients,
          customers or suppliers; or

               (iv) competing with,  participating  or engaging in, or otherwise
          lending   assistance   (financial   or   otherwise)   to  any   Person
          participating or engaged in selling, creating or developing Enterprise
          Applications   Software  for  businesses   engaged  in  manufacturing,
          distribution or supply chain  management  functions which involves any
          of the functionality of the E-Ware System as further described below.

EEI has designed and is currently building a set of technologies for integrating
and executing  business  models known as the E-Ware System.  These  technologies
include the following:

Application  Interface:  This  interface  surrounds all the other  functionality
listed  below.  It is the  interface to which all  applications  are written and
hides the details of transactions,  collections,  naming,  events, etc. from the
application programmer.

Transactions:  These are all the  transactional  semantics  and  mechanics  that
control  the  concurrency  and  integrity  of  every  unit of work in a  running
application.  This advanced transaction model will allow multiple  transactional
views to be open for each  client,  allowing end users to manage  multiple  work
orders concurrently.

Dynamic UI: This is the  infrastructure to support dynamic Java user interfaces.
The UI,  which can be either a Java  applet or a Java  application,  can respond
dynamically to changes in the model. This  infrastructure  also provides all the
smart  caching   necessary  to  make  these  UIs  perform  in  mission  critical
applications that require fast response times.

Query and Indexing:  This is the subsystem  necessary for the  application to do
the searching and reporting on all of the data within the application.

Event Notification: this functionality allows the application programmer to send
events at a predetermined time and rate to any other object(s) within the system

Systems  Interface:  This is the  infrastructure  to support the interfaces that
will be used to communicate with external entities like other ERP or

Object  Import/Export:  This subsystem allows us to migrate object data from one
version of an application to another.

                                       2
<PAGE>

Business  Backplane:  A new architecture for business components to be developed
by EEI  and  integrated  into  the  Engine.  It  includes  components  interface
definitions and supports independent component upgrades.

Electronic Exchange: A market-based message broker for identifying and selecting
among candidate providers for business requests. Exchanges may be used at levels
ranging from low-level data requests to Internet-based buying and selling.

     (b) The  parties  hereto  recognize  that the Laws and public  policies  of
various  jurisdictions  may  differ as to the  validity  and  enforceability  of
covenants similar to those set forth in this Section. It is the intention of the
parties that the  provisions  of this Section be enforced to the fullest  extent
permissible   under  the  Laws  and  policies  of  each  jurisdiction  in  which
enforcement may be sought, and that the unenforceability (or the modification to
conform to such Laws or policies) of any  provisions  of this Section  shall not
render  unenforceable,  or  impair,  the  remainder  of the  provisions  of this
Section. Accordingly, if any provision of this Section shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall be deemed to
apply only with  respect to the  operation of such  provision in the  particular
jurisdiction  in which such  determination  is made and not with  respect to any
other provision or jurisdiction.

     (c) The parties hereto acknowledge and agree that any remedy at Law for any
breach of the provisions of this Section would be inadequate,  and Seller hereby
consents  to the  granting  by any  court of an  injunction  or other  equitable
relief,  without the necessity of actual  monetary  loss being proved,  in order
that the  breach or  threatened  breach of such  provisions  may be  effectively
restrained.

     1.2 Consideration For NonCompetition  Agreement.  The Purchaser will pay to
the Seller ONE HUNDRED THOUSAND DOLLARS  ($100,000) for this covenant payable in
twelve (12) equal monthly installments commencing on December 16, 1999.

     2. REMEDIES.

     2.1  Injunctive  Relief.  The  Seller  acknowledges  and  agrees  that  the
covenants and obligations contained in this Agreement relate to special,  unique
and extraordinary matters, that the skills, talents, experience and knowledge of
the Seller are very  valuable  and,  if used to compete  with the Company or the
Purchaser, or if the Seller is permitted to disclose confidential information or
permitted to make  negative or  disparaging  comments  about the  Company,  such
competition,  disclosure  and/or comments will greatly decrease the value of the
business  transferred to the Purchaser pursuant to the Purchase  Agreement,  and
that a violation of any of the terms of this  Agreement will cause the Purchaser
and the  Company  irreparable  injury  for which  adequate  remedy at law is not
available.  Therefore,  in addition to other  remedies that the Purchaser or the
Company may have,  the Seller agrees that the Purchaser  shall be entitled to an
injunction,  restraining  order  or other  equitable  relief  from any  court of
competent jurisdiction,  restraining the Seller from committing any violation of
the  covenants and  obligations  set forth in this  Agreement,  together with an
award of attorneys' fees to be set by the Court.

                                       3
<PAGE>

     2.2 Remedies Cumulative.  The Purchaser's rights and remedies under Section
2.1 above are  cumulative  and are in addition to, and not in lieu of, any other
rights and remedies the Purchaser may have at law or in equity.

     3. MISCELLANEOUS.

     3.1 Notice.  All notices,  demands and requests  required by this Agreement
shall be in  writing  and shall be  deemed  to have  been  given or made for all
purposes (i) upon  personal  delivery,  (ii) one (1) day after being sent,  when
sent by  professional  overnight  courier  service,  (iii)  five (5) days  after
posting  when  sent by  registered  or  certified  mail,  or (iv) on the date of
transmission  when sent by  telegraph,  telegram,  telex or other  form of "hard
copy" transmission,  to either party hereto at the address set forth below or at
such other  address as either  party may  designate  by notice  pursuant to this
Section 3.1.

          If to Purchaser:    QAD Inc.
                              6450 Via Real
                              Carpinteria, CA  93013
                              Attn:    General Counsel
                              Facsimile: 805-566-6080

          With copy to:       Joseph E. Nida, Esq.
                              Nida & Maloney, LLP
                              800 Anacapa Street
                              Santa Barbara, CA  93101
                              Facsimile No.:  805-568-1955

          If to Seller:       David A. Taylor
                              4008 Bayview Avenue
                              San Mateo, california  94403
                              Facsimile:  none

          With copy to:       Heller, Ehrman, White & McCauliffe
                              525 University Avenue
                              Palo Alto, CA  94301
                              Attn:  Sarah A. O'Dowd
                              Facsimile No.: 650-324-0638

          If to Company:      Enterprise Engines, Inc.
                              c/o QAD Inc.
                              10,000 Midlantic, #200 East
                              Mt. Laurel, NJ  08054
                              Attn:  Roland B. Desilets
                              Facsimile No.:  856-850-2698

                                       4
<PAGE>

          With copy to:       Joseph E. Nida, Esq.
                              Nida & Maloney, LLP
                              800 Anacapa Street
                              Santa Barbara, CA  93101
                              Facsimile No.:  805-568-1955

     This Agreement  shall be binding on, and shall inure to the benefit of, the
parties hereto and their respective heirs,  legal  representatives,  successors,
and  assigns;  provided,  however,  that the Seller may not assign,  transfer or
delegate his rights or  obligations  hereunder and any attempt to do so shall be
void.

     3.3 Entire Agreement. This Agreement and the Purchase Agreement contain the
entire  agreement of the parties with respect to the subject matter hereof,  and
all other agreements, written or verbal, are of no further force or effect.

     3.4 Amendment.  This Agreement may be modified or amended only by a written
agreement signed by the Purchaser and the Seller.

     3.5 Waivers.  No waiver of any term or provision of this  Agreement will be
valid  unless  such waiver is in writing  and signed by the party  against  whom
enforcement of the waiver is sought. The waiver of any term or provision of this
Agreement shall not apply to any subsequent breach of this Agreement.

     3.6 Captions and Cross-references. Captions to the various sections in this
Agreement are for the  convenience  of the parties only and shall not affect the
meaning  or  interpretation  of this  Agreement.  All  cross-references  in this
Agreement,  unless specifically directed to another agreement or document, refer
to provisions within this Agreement.

     3.7 Counterparts.  This Agreement may be executed in several  counterparts,
each of which shall be deemed an original,  but together  they shall  constitute
one and the same instrument.

     3.8  Severability.  The terms and  provisions  of this  Agreement  shall be
deemed  severable,  and if any term,  provision or part of any provision is held
illegal,  void or invalid  under  applicable  law,  the same shall be deleted or
changed  to the  minimum  extent  necessary  to make it, as so  changed,  or the
remainder of the provision in the case of a deletion of any part of a provision,
legal,  valid and binding.  If any term or  provision of this  Agreement is held
illegal, void or invalid in its entirety,  the remaining terms and provisions of
this  Agreement  shall not in any way be affected or impaired  but shall  remain
binding in accordance with their terms. 3.9 ARBITRATION. Any dispute relating to
this Agreement shall be resolved in accordance  with the arbitration  provisions
set forth in the Purchase Agreement.

     3.9  Arbitration.  Any dispute relating ot this Agreement shall be resolved
in  accordance  with  the  arbitation  provisions  set  forth  in  the  Purchase
Agreement.

                                       5
<PAGE>

     3.10  Attorneys'  Fees and  Costs.  In the event of any action at law or in
equity between the parties hereto to enforce any of the provisions  hereof,  the
unsuccessful  party or parties to such  litigation  shall pay to the  successful
party or parties all costs and expenses  including  reasonable  attorneys' fees,
incurred  therein by such  successful  party or parties,  and if such successful
party or parties shall recover  judgment in any such action or proceeding,  such
costs,  expenses,  and  attorneys  fees may be  included  in and as part of such
judgment. The successful party shall be the party who is entitled to recover his
costs of suit,  whether or not the suit proceeds to final judgment.  If no costs
are awarded, the successful party shall be determined by the court.

     3.11 GOVERNING LAW AND FORUM. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PURCHASER,  THE COMPANY AND THE SELLER HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF
THE  STATE OF  CALIFORNIA  APPLICABLE  TO  CONTRACTS  MADE  AND TO BE  PERFORMED
ENTIRELY  WITHIN SUCH STATE.  EXCEPT AS SET FORTH IN SECTION 3.9 ABOVE,  ANY AND
ALL ACTIONS AND PROCEEDINGS  ARISING OUT OF OR RELATED DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT SHALL BE LITIGATED IN ANY STATE COURT OR FEDERAL COURT SITTING IN
SAN  FRANCISCO,  STATE OF  CALIFORNIA,  AND EACH PARTY HERETO  HEREBY  EXPRESSLY
CONSENTS AND SUBMITS TO THE  JURISDICTION OF ANY SUCH COURT AND TO VENUE THEREIN
AND  CONSENTS  TO THE  SERVICE OF PROCESS IN ANY SUCH  ACTION OR  PROCEEDING  BY
CERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND COMPLAINT THEREIN DIRECTED TO
THE PARTIES IN THEIR RESPECTIVE ADDRESSES SET FORTH IN SECTION 3.1 HEREOF.

     3.12  Covenant  to Perform  Necessary  Acts.  Each party  hereto  agrees to
perform any further acts and execute and deliver any further documents which may
be  reasonably  necessary  or  otherwise  reasonably  required  to carry out the
provisions of this Agreement.

     3.13 Number and Gender. Words in the singular shall include the plural, and
words in a  particular  gender  shall  include  either or both  genders when the
context in which such words are used indicate that such is the intent.

                                       6
<PAGE>

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

                                     PURCHASER:

                                     QAD Inc.

                                     By: /s/ A.J. Moyer
                                        ------------------------------
                                        Name:  Albert J. Moyer
                                        Title:  Chief Financial Officer

                                     SELLER:

                                     /s/ David A. Taylor
                                     ---------------------------------
                                     David A. Taylor

                                     COMPANY:

                                     ENTERPRISE ENGINES, INC.

                                     By:  /s/ David A. Taylor
                                        -------------------------------
                                        Name:  David A. Taylor
                                        Title: President and Chief Executive
                                               Officer

                                       7
<PAGE>

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