Document:

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                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                             SOLIANCE NETWORKS, LLC

                           Dated as of August 25, 1999
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            THIS LIMITED LIABILITY COMPANY AGREEMENT of SOLIANCE NETWORKS, LLC a
Delaware limited liability company (the "Company"), is made and effective as of
August 25, 1999, among Sempra Energy Information Solutions, a California
corporation ("SEIS"), Modis, Inc., a Florida corporation ("Modis"), and
Cayenta.com, a Delaware corporation, ("Cayenta") (SEIS, Modis and Cayenta are
collectively referred to herein as the "Members").

            WHEREAS, the Members desire to form the Company under the Delaware
Act for the purposes and upon the terms and conditions set forth herein;

            WHEREAS, the Members desire that the Company be their vehicle for
the provision of certain products and services supporting underlying business
processes to be marketed to organizations within the energy, water, and utility
industries on the terms and conditions set forth herein; and

            WHEREAS, Modis, SEIS and Cayenta have agreed to provide certain
necessary services to the Company pursuant to the Management Service Agreements.

            NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:

                                    ARTICLE I
                                  DEFINED TERMS

            SECTION 1.01 Definitions. Each of the following terms shall have the
meaning provided in the Section or Schedule set forth opposite such term:

            Term                                            Section
            ----                                            -------

            Adjusted Capital Account                        Schedule 1.01
            Adjusted Capital Account Deficit                Schedule 1.01
            Affiliate                                       Schedule 1.01
            Agreement                                       Schedule 1.01
            Appraiser                                       11.02
            Asset Value                                     Schedule 1.01
            Auditors                                        9.01
            Bankruptcy                                      Schedule 1.01
            Business Day                                    Schedule 1.01
            Capital Account                                 Schedule 1.01
            Capital Contribution                            Schedule 1.01
            Cayenta                                         Preamble

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            Cayenta Dedicated Assets                        4.02
            Cayenta Initial Membership Units                5.02
            Cayenta Representatives                         6.03
            Certificate                                     Schedule 1.01
            Chairman                                        6.03
            Code                                            Schedule 1.01
            Company                                         Preamble
            Company Business                                Schedule 1.01
            Company Minimum Gain                            Schedule 1.01
            Conversion                                      16.01
            Conversion Date                                 16.01
            Corporation                                     16.01
            Covered Person                                  Schedule 1.01
            Customer Contract                               Schedule 1.01
            Debt                                            Schedule 1.01
            Dedicated Assets                                Schedule 1.01
            Delaware Act                                    Schedule 1.01
            Delinquent Member                               4.04
            Depreciation                                    Schedule 1.01
            Existing Programs                               14.01
            Fair Market Value                               11.02
            Fiscal Year                                     Schedule 1.01
            Former Member                                   11.02
            GAAP                                            Schedule 1.01
            Information                                     14.04
            Interest Rate                                   Schedule 1.01
            License Agreement                               4.02
            Liens                                           Schedule 1.01
            Liquidating Trustee                             11.03
            Majority Vote                                   Schedule 1.01
            Management Services Agreement                   4.02
            Managing Members                                Schedule 1.01
            Marketable Securities                           Schedule 1.01
            Member                                          Schedule 1.01
            Member Nonrecourse Debt                         Schedule 1.01
            Member Nonrecourse Debt Minimum Gain            Schedule 1.01
            Member Nonrecourse Deductions                   Schedule 1.01
            Members                                         Preamble
            Members Committee                               6.03
            Membership Unit                                 Schedule 1.01
            Modis                                           Preamble
            Modis Dedicated Assets                          4.02
            Modis Initial Membership Units                  5.02
            Modis Representatives                           6.03
            Net Distributable Cash                          Schedule 1.01

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            Non-Delinquent Members                          4.04
            Nonrecourse Deductions                          Schedule 1.01
            Nonrecourse Liability                           Schedule 1.01
            Officers                                        6.11
            Person                                          Schedule 1.01
            President                                       6.11
            Products                                        Schedule 1.01
            Property                                        Schedule 1.01
            Regulations                                     Schedule 1.01
            Regulatory Allocations                          7.03
            Related Agreements                              Schedule 1.01
            Representatives                                 6.02
            SEIS                                            Preamble
            SEIS Dedicated Assets                           4.02
            SEIS Initial Membership Unit                    5.02
            SEIS Representatives                            6.03
            Services Agreement                              Schedule 1.01
            Subsidiary or Subsidiaries                      Schedule 1.01
            Transfer                                        Schedule 1.01
            Transferee                                      Schedule 1.01
            Unanimous Vote                                  Schedule 1.01
            Unrecovered Capital                             16.01

                                   ARTICLE II
                               FORMATION AND TERM

            SECTION 2.01 Formation.

            (a) The parties hereto hereby form and confirm the formation of the
Company as a limited liability company under and pursuant to the provisions of
the Delaware Act and all other pertinent laws of the State of Delaware for the
purposes and upon the terms and conditions hereinafter set forth. The parties
hereto agree that the rights, duties and liabilities of the initial Members and
any additional Member admitted to the Company in accordance with the terms
hereof shall be as provided in the Delaware Act, except as otherwise provided
herein.

            (b) The name and mailing address of each Member shall be listed on
Schedule 2.01 attached hereto. Each of SEIS, Modis and Cayenta is hereby
admitted as a Member of the Company. Additional Members shall be admitted as
Members of the Company in accordance with Article X. The Chief Executive
Officer, or a designee of the Chief Executive Officer, shall be required to
update Schedule 2.01 from time to time, as necessary to reflect accurately the
information herein as known by the Chief Executive Officer, but no such update
shall modify Schedule 2.01 in any manner inconsistent with this Agreement or the
Delaware Act. Any amendment or revision to Schedule 2.01 made in accordance with
this Agreement shall not be deemed an amendment to this Agreement for purposes
of Section 17.12. Any reference in this

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Agreement to Schedule 2.01 shall be deemed to be a reference to Schedule 2.01,
as amended and in effect from time to time.

            (c) The President, or a designee of the Chief Executive Officer, is
hereby designated as an authorized person, within the meaning of the Delaware
Act, to execute, deliver and file, or to cause the execution, delivery and
filing of, any amendments or restatements of the Certificate and any other
certificates, notices, statements or other instruments (and any amendments or
restatements thereof) necessary or advisable for the formation of the Company or
the operation of the Company in all jurisdictions where the Company may elect to
do business, but no such amendment, restatement or other instrument may be
executed, delivered or filed unless adopted in a manner authorized by this
Agreement.

            SECTION 2.02 Name. The name of the Company is Soliance Networks. The
business of the Company may not be conducted under any other name unless all the
parties hereto expressly agree in writing.

            SECTION 2.03 Term. The term of the Company shall commence, and the
Certificate shall be filed in the office of the Secretary of State of the State
of Delaware, on the date hereof and shall continue for a term as set forth in
the Certificate of Formation, subject to the provisions set forth in Article XI
and applicable law. The existence of the Company as a separate legal entity
shall continue until cancellation of the Certificate in the manner required by
the Delaware Act or this Agreement.

            SECTION 2.04 Principal Place of Business. The principal place of
business of the Company shall be SEIS's principal place of business, whether in
California or otherwise, or such other place as the Members Committee may
determine from time to time, and the Company shall have other regional offices
and operations as the Members Committee may determine from time to time.

            SECTION 2.05 Title to Company Property. All property of the Company,
whether real, personal or mixed, tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Member, individually, shall have any
direct ownership interest in such property. At no time will the Company own or
include in Company Property, the SEIS Dedicated Assets, the Modis Dedicated
Assets or the Cayenta Dedicated Assets.

            SECTION 2.06 Agent for Service of Process. The Company's registered
agent for service of process in the State of Delaware shall be as set forth in
the Certificate, as the same may be amended by the Members Committee from time
to time.

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                                   ARTICLE III
                        PURPOSE AND POWER OF THE COMPANY

            SECTION 3.01 Purpose. The purpose of the Company is to engage in (a)
the Company Business and (b) any and all lawful activities in accordance with
the Delaware Act which the Members Committee deems necessary or advisable in
connection with the Company Business.

            SECTION 3.02 Powers of the Company. Subject to the limitations set
forth in this Agreement, the Company will possess and may exercise all of the
powers and privileges granted to it by the Delaware Act, by any other law or
this Agreement, together with all powers incidental thereto, so far as such
powers are necessary or convenient to the conduct, promotion or attainment of
the purpose of the Company set forth in Section 3.01.

            SECTION 3.03 Maintenance of Separate Existence. The Company shall do
all things necessary to maintain its limited liability company existence
separate and apart from each Member and any Affiliate of any Member, including
holding regular meetings of the Members and maintaining its books and records on
a current basis separate from that of any Affiliate of the Company or any other
Person, and shall not commingle the Company's assets with those of any Affiliate
of the Company or any other Person. In furtherance, and not in limitation, of
the foregoing, the Company shall not:

            (a) Authorize or permit any Person, other than the Chief Executive
Officer, to act on its own behalf with respect to matters (other than matters
customarily delegated to others under powers of attorney) for which a limited
liability company's members or managing member would customarily be responsible;

            (b) Fail (i) to maintain, or cause to be maintained by an agent
under the Company's control, physical possession of all its books and records,
(ii) to maintain capitalization adequate for the conduct of its business, (iii)
to account for and manage all of its liabilities separately from those of any
other Person, including payment by it of administrative expenses and taxes,
other than income taxes, from its own assets, or (iv) to the extent practicable,
to identify or cause to be identified, on its books and records or otherwise,
separately all of its assets from those of any other Person;

            (c) Except as contemplated by the preceding clause (b) or Section
4.03, commingle or permit the commingling of its funds with the funds of any
Member or any Affiliate of any Member or use its funds for other than the
Company Business; or

            (d) Except as contemplated by Section 4.03, maintain or permit the
maintenance of joint bank accounts or other depository accounts to which any
Member would have independent access.

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                                   ARTICLE IV
                         CAPITAL CONTRIBUTIONS, RELATED
                        AGREEMENTS, DEDICATION OF ASSETS,
                          CAPITAL ACCOUNTS AND ADVANCES

            SECTION 4.01 Capital Contributions.

            (a) SEIS. In exchange for the SEIS Initial Membership Units, SEIS
hereby agrees to make a Capital Contribution of $4,000,000 as provided in
Section 4.01(d) below.

            (b) Modis. In exchange for the Modis Initial Membership Units, Modis
hereby agrees to make a Capital Contribution of $5,000,000 as provided in
Section 4.01(d) below.

            (c) Cayenta. In exchange for the Cayenta Initial Membership Units,
Cayenta hereby agrees to make a Capital Contribution of $5,000,000 as provided
in Section 4.01(d) below.

            (d) Initial Capital Contributions. SEIS, Modis and Cayenta shall
make their respective Initial Capital Contribution on or before October 1, 1999
after receiving appropriate wire instructions from the Company.

            SECTION 4.02 Related Agreements: Dedication of Assets.

            (a) SEIS. SEIS hereby agrees:

                  (i) to enter into (A) a Management Services Agreement with the
Company for Energy Commodity Products dated and effective as of the date hereof
in form and substance satisfactory to the Members ( "Management Services
Agreement") and (B) an intellectual property license agreement with the Company
effective as of the date hereof in form and substance satisfactory to the
Members ("License Agreement"), and

                  (ii) to make available to the Company on a non-exclusive
basis, to the extent requested by the Members Committee and approved by SEIS,
such other assets, facilities and services as the Members Committee may
reasonably request at any time (such assets, facilities and services being the
"SEIS Dedicated Assets"). The Company shall have no right to the earnings or
other financial results of any such dedicated assets.

                  (iii) to provide Company a restricted source code license in
perpetuity to the Sempra Energy Enterprise Frameworks (EFX) and its related
components. SEIS shall provide Modis and Cayenta a restricted source code
license in perpetuity to the EFX for use in their respective businesses outside
of the American gas, water and electric utility industries. In the event of a
dissolution and winding up of the Company by SEIS, Cayenta and Modis shall
receive an unrestricted source code license in perpetuity to the Sempra Energy
Enterprise Frameworks (EFX) and its related components subject to Section 14.01
herein.

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            (b) Modis. Modis hereby agrees:

                  (i) to enter into (A) a Management Services Agreement with the
Company dated and effective as of the date hereof in form and substance
satisfactory to the Members, and (B) a License Agreement, and

                  (ii) to make available to the Company on a non-exclusive
basis, to the extent requested by the Members Committee pursuant to a Majority
Vote and approved by Modis, such other assets, facilities and services as the
Members Committee may reasonably request at any time (such assets, facilities
and services being the " Modis Dedicated Assets"). The Company shall have no
right to the earnings or other financial results of any such dedicated assets.

            (c) Cayenta. Cayenta hereby agrees:

                  (i) to enter into (A) a License Agreement, and (B) a
Management Services Agreement, and

                  (ii) to make available to the Company on a non-exclusive
basis, to the extent requested by the Members Committee and approved by Cayenta,
such other assets, facilities and services as the Members Committee may
reasonably request at any time (such assets, facilities and services being the
"Cayenta Dedicated Assets"). The Company shall have no right to the earnings or
other financial results of any such dedicated assets.

            (d) All parties shall have the right of first refusal to provide any
and all personnel for internal and external development activities, projects, or
maintenance requirements for all areas outlined in the Company's Service Level
Agreement.

            (e) Compensation.

                  (i) The Company shall pay SEIS, Modis and Cayenta the amounts
due them in accordance with the Management Services Agreement or the License
Agreement to which such Member shall be a party. All licenses granted to the
Company under the License Agreements shall be royalty-free.

                  (ii) The Company shall pay SEIS, Modis and Cayenta an amount
for the use of the SEIS Dedicated Assets, the Modis Dedicated Assets or the
Cayenta Dedicated Assets, respectively.

                  (iii) The Members Committee shall adopt guidelines to
calculate costs under Related Agreements and for use of Dedicated Assets. Such
guidelines shall not include as a cost salaries and benefits of senior
executives of such Member. Within five Business Days of the last day of each
month, each Member shall notify the Company in writing of the compensation due
for services under its Related Agreement and for the use of its Dedicated

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Assets, during the preceding month. Should the Company not pay said sum, or any
part thereof, within 30 calendar days from the date of the monthly invoice (A)
interest at the Interest Rate shall be additionally due and owing on the unpaid
balance from the date past due and (B) the Member to which such sum is owed
shall, effective 30 days following the delivery of written notice to the
Company, have no further obligation pursuant to its Related Agreement to perform
thereunder or pursuant to Section 4.02 to make available to the Company any of
its Dedicated Assets until such unpaid balance plus all accrued interest shall
have been paid; provided, that no Member shall be relieved of any of its
obligations pursuant to a Related Agreement to perform such services or pursuant
to this Section 4.02 to make available its Dedicated Assets if, following the
delivery of written notice pursuant to this clause (B) but prior to 30 days
following such delivery, the Company shall deliver to the relevant Member
written notice setting forth in reasonable detail why the Company in good faith
believes no unpaid amount is owed pursuant to its Related Agreement or this
Section 4.02. Such Member will research the items in question and resolve any
differences with the Company. In the event any amount that was paid by the
Company was not properly owed, then within 30 days after the delivery of such
notice, the Company shall be reimbursed that amount with interest at the
Interest Rate from the date the original payment was received until the
adjustment was refunded. Upon the dissolution and winding up of the Company,
each Member will bill the Company for the actual costs it incurred since the
last billing under the terms and conditions mentioned above and the Company
shall pay promptly such Member.

            (f) Audit Rights. The Company shall conduct an annual audit to
examine the costs, payments, and/or settlements charged to the Company pursuant
to Section 4.02(d) in respect of Related Agreements and Dedicated Assets. Such
audit shall take place in the first quarter of each year for the immediately
preceding year and be conducted by the Auditors who shall report the findings to
the Member's Committee no later than April 15 of each year. By unanimous vote
the Members may elect not to conduct such audit. In any event each Member
reserves the right to designate its own employee representative, or its
contracted representative, who shall have the right to audit and to examine any
cost, payment, settlement, or supporting documentation charged to the Company
pursuant to Section 4.02(d) in respect of any other Member's Related Agreement
or Dedicated Assets. Any such audit shall be undertaken at the expense of the
party requesting such audit at reasonable times and in conformance with
generally accepted auditing standards. The Company and each Member agree to
fully cooperate with any such audit. The right to audit shall extend during the
term of this Agreement and for a period of two years following the date of final
payment by the Company to such Member. Each Member and its respective Affiliates
shall retain all necessary records/documentation for two years, or such longer
period as may be required by order, law, regulation or rule, after the year to
which they pertain. Each Member and the Company will be notified in writing of
any exception taken as a result of an audit. If the auditing Member and the
audited Member agree that the Company has been overcharged with regard to the
audited Member's Related Agreement or Dedicated Assets, such Member shall refund
the agreed upon amount plus interest to the Company within 30 days (or,
alternatively, with prior written approval of the Company, deduct the dollar
amount from the next invoice submitted to the Company). In the event agreement
is not reached within 30 days of delivery of the notice referred to above, the
matter shall be referred to the Auditors who shall decide such matter within 60
days of such referral. The fees of the Auditors in

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connection with such matter shall be paid by the party against which the
Auditors decide. Interest will be computed at the Interest Rate from the date
the excess payment was made by the Company until the repayment or offset was
made.

            SECTION 4.03 Additional Funding.

            (a) In the event that the Members Committee determines pursuant to a
Majority Vote that additional capital or credit support is required by the
Company, it will be funded through any or a combination of the following
mechanisms at the option of the Members Committee:

                  (i) pursuant to a Majority Vote through revolving credit
facilities or other credit support from third parties (such as banks);

                  (ii) pursuant to a Majority Vote through credit support,
subject to availability, from SEIS and/or its Affiliates (by means of guaranty
or otherwise);

                  (iii) pursuant to a Unanimous Vote through additional capital
contributions made by all Members at the same ratio as the initial capital
contributions. Unless approved by Unanimous Vote the maximum additional capital
contribution, shall be $2 million for SEIS; $2.5 million for Modis and $2.5
million for Cayenta. Unless a Member fails to make its capital contribution
hereunder, in which case such Member shall be subject to the terms of Section
4.04 herein, such contributions shall increase the number of Membership Units of
each Member by the ratio of the additional capital contribution to the initial
capital contribution.

                  (iv) pursuant to a Unanimous Vote through Member loans by each
of SEIS, Modis and Cayenta and/or their Affiliates (a schedule of anticipated
Member loans including repayment terms will be developed by the Company after
six months of operation hereunder); it being understood that such Member loans
shall not exceed an aggregate of $8 million and $1 million, and $1 million
respectively, for the first six months after the date hereof; or

                  (v) pursuant to a vote of the majority of the Members
representing at least the majority of the outstanding Member Units through
additional cash capital contributions made by existing Members, who elect to
make such additional contributions, or new member(s).

            (b) In the event that such funding is to be made in the form of
Member loans or credit support, the Company shall notify SEIS, Modis, and/or
Cayenta, as the case may be, of the Member loans to be made or credit support to
be provided, pursuant to this Section 4.03 by delivering a written notice to
SEIS, Modis and/or Cayenta, specifying the aggregate amount of Member loans to
be made by each of them. In each case, the obligation of SEIS, Modis and/or
Cayenta to make Member loans or provide credit support, as the case may be, as
determined by the Members Committee, shall be subject to and conditioned on the
Company meeting funding criteria. The Members expect that the funding criteria
will be established by the Members Committee prior to January, 2000 and reviewed
and revised by the Members Committee from

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time to time based on the then current operations and business plans of the
Company. The amount of Member loans to be made by SEIS, Modis and/or Cayenta
shall be the product of (A) the aggregate amount of Member loans to be made and
(B) a fraction, the numerator of which shall be the aggregate number of
Membership Units owned by SEIS, Modis, or Cayenta, as the case may be, and the
denominator of which shall be the number of outstanding Membership Units owned
by the parties. The Member loans to be made by SEIS, Modis and Cayenta shall be
made in such amount as is specified in such notice in immediately available
funds by wire transfer or other similar means to a bank account designated by
the Company in such notice prior to the close of business on the fifth Business
Day following the date of delivery of such notice. Subject to paragraphs (c) and
(d) below, each Member loan shall be on such terms as to repayment and otherwise
as the Members by a Majority Vote shall agree.

            (c) The Company shall, on demand, reimburse SEIS, Modis, Cayenta
and/or their Affiliates, as the case may be, for all costs and expenses directly
incurred by them in providing any Member loan, credit support or other extension
of credit to or for the benefit of the Company and reimburse them for all
amounts payable to third parties in connection with each such extension of
credit provided by them. The Company shall compensate SEIS, Modis, and Cayenta
for any Member loans made by them and for funds advanced under credit support
and the extensions of credit to or for the benefit of the Company by SEIS and/or
its Affiliates on a quarterly basis until repaid in full together with interest
thereon, by the payment of interest at the Interest Rate calculated from the
date each loan or advance is made until the date all outstanding principal and
interest thereon is paid in full. Member loans and funds advanced under credit
support or other extension of credit for the Company shall be repaid, in inverse
order of maturity, in equal quarterly installments over such period of time as
approximately two (2) years, provided, that, in addition to repayment of such
amounts in such equal quarterly installments, the Company shall make mandatory
prepayments out of Net Distributable Cash in respect of such Member loans and
funds advanced under credit support or other extension of credit for the Company
each quarter in an amount determined in accordance with Section 8.05(a)(iii)
hereof (after giving effect to any distributions called for by clauses (i) or
(ii) thereof), and upon withdrawal of such Member its Member loans and credit
supports and other extensions of credit for the Company shall be repayable on
the same terms as if such Member did not so withdraw. For purposes hereof, a
borrowing by SEIS, Modis, and/or Cayenta to fund a Member loan or credit support
or otherwise provide liquidity to or for the benefit of the Company, or the
extension to the Company of credit as an unmargined line shall, in every
instance, be treated as a Member loan.

             (d) Notwithstanding any other provisions in this Agreement, the
obligations of the Members pursuant to this Section 4.03 shall not be, and shall
not be deemed to be, a guaranty, maintenance or support agreement or other
similar agreement, or under any circumstances utilized to satisfy the general or
other obligations and liabilities of the Company.

            SECTION 4.04 Delinquent Members. If SEIS, Modis, or Cayenta
wrongfully fails to timely advance all or any portion of any capital
contributions or Member loans that it has agreed to make pursuant to the
provisions of this Article IV, within 15 days following notice by the Company to
such Member (the "Delinquent Member") of such failure, the Company may exercise
any one or more of the following rights or remedies:

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            (a) Taking such action as the Managing Members other than the
Delinquent Member deem appropriate to obtain payment or provision by the
Delinquent Member of that portion of its agreed advance or credit support that
is in default, together with interest thereon at the Interest Rate from the date
that such advance or credit support was due until the date that such advance is
made, at the cost and expense of the Delinquent Member; and

            (b) Permitting those Members that desire to do so (the
"Non-Delinquent Members") to advance that portion of the advance that is in
default, with the result that, the sum thus advanced shall be determined to be a
loan from the Non-Delinquent Members to the Delinquent Member pursuant to this
Article IV. The loan shall have the following terms: (A) the principal balance
of such loan and all accrued unpaid interest thereon shall be due and payable in
whole within thirty days after written demand therefor has been given to the
Delinquent Member by the Non-Delinquent Members; (B) the loan shall bear
interest at the Interest Rate, from the date that the loan was made until the
date that such loan, together with all interest accrued thereon, is repaid to
the Non-Delinquent Members; (C) all distributions from the Company that would
otherwise be made to the Delinquent Member are hereby assigned by the Delinquent
Member to the Non-Delinquent Members (whether before or after dissolution of the
Company) until the loan and all interest accrued thereon have been repaid in
full to the Non-Delinquent Members (with all such payments being applied first
to interest earned and unpaid and then to principal); and (D) the Non-Delinquent
Members shall have the right, in addition to the other rights and remedies
granted to them pursuant to this Agreement or available to them at law or in
equity, to take such action as the Non-Delinquent Members deem appropriate to
obtain payment by the Delinquent Member of the principal balance of such loan
and all accrued and unpaid interest thereon, at the cost and expense of the
Delinquent Member.

            SECTION 4.05 Status of Capital Contributions.

            (a) No Member shall receive any interest, salary or drawing with
respect to its Capital Contributions or its Capital Account or for services
rendered on behalf of the Company or otherwise in its capacity as a Member,
except as otherwise specifically provided in this Agreement or in the Management
Services Agreements, or License Agreements. Except as otherwise expressly
provided herein, no Member will be permitted to borrow, make an early withdrawal
of, or demand or receive a return of any Capital Contributions. Under
circumstances requiring a return of any Capital Contributions, except as
otherwise expressly provided in this Agreement, no Member will have the right to
receive property other than cash.

            (b) Except as otherwise provided herein, the Members shall be liable
only to make their Capital Contributions and Member loans and other credit
support pursuant to this Article IV, and no Member shall otherwise be required
to lend any funds to the Company or, after a Member's Capital Contributions have
been fully paid pursuant to this Article IV, to make any additional capital
contributions to the Company. No Member shall have any personal liability for
the repayment of any Capital Contribution of any other Member or Transferee. A
Member's obligation to contribute capital to the Company is conditional (within
the meaning of Section 18-502(b) of the Delaware Act), payable only to the
extent, and only in such amounts,

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required to be paid to the Company pursuant to this Agreement. Notwithstanding
any other provision in this Agreement, the obligations of the Members pursuant
to this Section 4.05 shall not be, and shall not be deemed to be, a guaranty,
maintenance or support agreement or other similar agreement, or under any
circumstances utilized to satisfy the general or other obligations and
liabilities of the Company.

            SECTION 4.06 Capital Accounts.

            (a) An individual Capital Account shall be established and
maintained for each Member.

            (b) The Capital Account of each Member shall be maintained in
accordance with the substantial economic effect and special rule provisions of
Regulations Sections 1.704-1(b)(2) and 1.704-2 and the following provisions:

                  (i) to each Member's Capital Account there shall be credited
such Member's Capital Contributions, such Member's distributive share of Net
Profits, any items in the nature of income or gain that are specially allocated
to such Member pursuant to Article VII and the amount of any Company liabilities
that are assumed by such Member or that are secured by any Company assets
distributed to such Member;

                  (ii) to such Member's Capital Account there shall be debited
the amount of cash and the Asset Value of any Company assets distributed to such
Member pursuant to any provision of this Agreement, such Member's distributive
share of Net Losses, any items in the nature of deductions or losses that are
specially allocated to such Member pursuant to Article VII and the amount of any
liabilities of such Member that are assumed by the Company or that are secured
by any property contributed by such Member to the Company;

                  (iii) in the event all or some of a Member's interest in the
Company is assigned in accordance with Article X, the assignee shall succeed to
the Capital Account of the assignor to the extent it relates to the assigned
interest; and

                  (iv) no Member shall be required to pay to the Company or to
any other Member or Person any deficit in such Member's Capital Account upon
liquidation (as such term is defined in Regulations Section
1.704-1(b)(2)(ii)(g)) of its interest in the Company or upon dissolution of the
Company or otherwise.

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                                    ARTICLE V
                                MEMBERSHIP UNITS

            SECTION 5.01 Membership Units. All Membership Units shall have
identical rights in all respects as all other Membership Units except as
otherwise specified in this Agreement. Each Member hereby agrees that its
interest in the Company and in its Membership Units shall for all purposes be
personal property. A Member shall have no interest in specific Company property.

            SECTION 5.02 Initial Membership Units. Effective as of the date
hereof, SEIS shall have an aggregate of 800 Membership Units (the "SEIS Initial
Membership Units"), Modis shall have an aggregate of 100 Membership Units (the "
Modis Initial Membership Units"), and Cayenta shall have an aggregate of 100
Membership Units (the "Cayenta Initial Membership Units").

            SECTION 5.03 Additional Membership Units. In the event additional
Membership Units shall be issued to an initial Member, or to any other Person
and such Person shall be admitted as a Member in accordance with Article X, the
Chairman (as defined in Section 6.03(a) shall amend Schedule 2.01 accordingly.
The Capital Contribution to be made by such Person except as provided for in
4.03(iii) shall be in the form and amount determined by Unanimous Vote and the
amount of such Capital Contribution shall be credited to such Person's Capital
Account.

                                   ARTICLE VI
                      MANAGING MEMBERS; MEMBERS COMMITTEE;
                       MANAGEMENT COMMITTEE; AND OFFICERS

            SECTION 6.01 Management by the Managing Members. The Company shall
be managed by the Managing Members.

            SECTION 6.02 Power of Managing Members.

            (a) The Managing Members shall have the power to exercise any and
all rights or powers granted to the Members pursuant to the terms of this
Agreement. In addition to the foregoing, the Managing Members shall have the
power to exercise any and all other rights or powers of the Company and do all
lawful acts and things as are not directed or required to be exercised or done
by the Company under the Delaware Act or this Agreement.

            (b) With respect to the internal management of the Company, without
limiting the authority of the Managing Members, in their capacities as such, to
act for and bind the Company, the Managing Members shall act through their
designees (collectively, the "Representatives") on the Members Committee, who
may be replaced at any time by the Managing Member that appointed such
Representative (with or without cause), subject to Section 6.03(a). Any vote or
consent to be taken by the Managing Members shall be taken with

                                       13
<PAGE>

the approval of not less than a Majority Vote of the Members Committee, except
as otherwise provided in the Delaware Act or this Agreement.

            SECTION 6.03 Members Committee.

            (a) The forum for meetings of the Managing Members shall be a
members committee (the "Members Committee"). Each Managing Member shall be
entitled to be represented at Members Committee meetings by its Representatives.
The total number of Representatives that shall be entitled to attend Members
Committee meetings shall be six, (i) of whom two shall be designated by SEIS
(the "SEIS Representatives"), (ii) two shall be designated by Modis (the " Modis
Representatives") and (iii) two shall be designated by Cayenta (the "Cayenta
Representatives"). In addition, the President of the Company shall be entitled
to participate but not vote in all Members Committee meetings unless the
President is also acting as a Representative of one of the Managing Members. The
Members Committee shall select a chairman (the "Chairman") from among the SEIS
Representatives, who shall preside over meetings of the Members Committee. The
SEIS Representatives shall be officers, directors or employees of SEIS or its
Affiliates, the Modis Representatives shall be officers, directors or employees
of Modis or its Affiliates, and the Cayenta Representatives shall be officers,
directors or employees of Cayenta or its Affiliates. The initial SEIS
Representatives, Modis Representatives and Cayenta Representatives are named on
Schedule 6.03. The number of Representatives in the Members Committee may be
amended by unanimous vote of the Members to accommodate new Members.

            (b) In addition to the Members' Representatives, officers,
directors, employees or other representatives (including the accountants,
attorneys and/or financial advisors) of a Member and its Affiliates shall be
permitted to attend Members Committee meetings as observers, in accordance with
non-discriminatory rules to be adopted by the Members Committee.

            (c) The Members Committee shall meet no less frequently than
semi-annually at such place and time as shall be determined by Majority Vote.
Special meetings of the Members Committee, to be held at the offices of the
Company as above provided (or such other place as shall be agreed by Majority
Vote), shall be called at the direction of the Chairman or a Managing Member
upon not less than five Business Days' notice given by the Chairman.

            (d) With respect to quarterly meetings and special meetings, not
later than five Business Days before each such meeting the Chairman shall
deliver to each Managing Member, together with the notice of each such meeting,
an agenda specifying in reasonable detail the matters to be discussed at the
applicable Members Committee meeting. Any Managing Member that wishes to have
any additional matter discussed at any such meeting, shall give to the Chairman
and each other Managing Member not later than two Business Days prior to any
such meeting, notice of each matter it so wishes to discuss.

            (e) At any meeting of the Members, every Member entitled to vote may
vote or attend in person or by proxy.

                                       14
<PAGE>

            (f) A quorum shall be at least one Representative of each Member.
Notwithstanding the above, if a Member has not attended two consecutive duly
noticed Member Meetings and does not attend the subsequent duly noticed
meeting(s), such Member will be deemed to be present so that a quorum will be
considered present. For any vote of the Members at such meeting the votes of the
absent Member shall be cast to concur with the majority vote of the Members who
are present.

            (g) For each Membership Unit (or fraction thereof) of a Member, such
Member shall be entitled to one vote (or a corresponding fractional vote).
Member's votes may be cast by any one of its Representatives.

            (h) Any one or more Members or Representatives or any committee
thereof may participate in a meeting of such Members, Members Committee or other
committee by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at the
meeting.

            SECTION 6.04 Approval Required.

            (a) Except as expressly required by the Delaware Act or by this
Agreement, no vote, consent or authorization of the Members shall be required
for the taking of any action on behalf of or with respect to the Company. The
Members Committee shall have authority with respect to all aspects of the
operation of the Company. Except as otherwise provided in the Delaware Act or in
this Agreement, action required to be approved by vote of the Members or Members
Committee shall be authorized if approved by a Majority Vote. Except as
otherwise provided herein, in every instance where this Agreement requires the
consent or authorization of Members or of any particular group of Members, such
consent or authorization need not be in writing.

            (b) Without limiting the generality of the foregoing, the Company
shall not take any of the following actions except pursuant to an Unanimous
Vote:

                  (i) the conduct by the Company of any business other than, or
the engagement by the Company in any transaction not substantially related to,
the Company Business; it being understood that the approval of the modification
or expansion of Company Business or any component thereof, shall not by itself
modify or expand the scope of Section 14.01;

                  (ii) the amendment or restatement of the Articles, except as
otherwise permitted pursuant to Section 17.12;

                  (iii) the admission of a Member and the approval of any
Transfer by a Member of a Membership Interest or Member loan, except as
otherwise permitted pursuant to Section 10.01(a);

                                       15
<PAGE>

                  (iv) the sale, transfer, lease, sublease, license or other
disposition by the Company to a third party of any material property or asset,
real, personal or mixed (including leasehold interests and intangible assets
other than in the ordinary course of the Company's Business); or grant a Lien on
any assets of the Company, other than pursuant to Section 4.03(d);

                  (v) the authorization, issuance, sale, acquisition, repurchase
or redemption by the Company of any Membership Units or other equity interest
(or option, warrant, conversion or similar right with respect to any equity
interest) in or of the Company, including but not limited to, the establishment
of a Membership Unit option plan and the granting of options or other rights
thereunder;

                  (vi) the merger or consolidation with, or acquisition of an
interest in, any Person other than in the ordinary course of the Company
Business, or the acquisition of a substantial portion of the assets or business
of any Person or any division or line of business thereof other than in the
ordinary course of the Company Business, or any other acquisition of material
assets not in the ordinary course of the Company Business, or the entering into
of any joint venture, partnership or similar arrangement;

                  (vii) the assumption or guarantee of any Debt of any third
party, other than of Members with respect to obligations incurred in accordance
with a Related Agreement or a Member loan, credit support or other extension of
credit to or for the benefit of the Company as contemplated by Section 4.03;

                  (viii) the commitment to any capital expenditure in excess of
$5 million;

                  (ix) other than pursuant to the types of contracts described
in clause (c)(vi) below and as contemplated by Section 4.03, the entering into
by the Company of any agreement, contract or arrangement pursuant to which the
Company is obligated to pay or entitled to receive payments in excess of
$5,000,000 over the term of such contract;

                  (x) the entering into, or amendment of, any (1) agreement,
arrangement or transaction, including a Related Agreement, with any officer,
Affiliate or Member of the Company (or any relative, beneficiary, employee or
Affiliate of such person), (2) any arrangement that would obligate the Company
to pay any employee in excess of $350,000 per year, or (3) any arrangement that
would obligate the Company to pay any employee compensation based on the net
profits, revenues or gross sales of the Company or any other contingent basis;

                  (xi) the commencement or settlement of any litigation for an
amount in excess of $1 million in any such commencement or settlement or series
of relate commencements or settlements; or

                  (xii) any change in the number of, or method of designating,
Representatives on the Members Committee;

                                       16
<PAGE>

                  (xiii) the appointment of any President, chief executive
officer, or chief financial officer;

                  (xiv) (1) the dissolution, liquidation or winding up of the
Company, or

                              (2) the commencement of a voluntary proceeding
seeking reorganization or other similar relief;

            (c) To avoid confusion, the Company shall be entitled to take any of
the following actions pursuant to a Majority Vote:

                  (i) any determination with respect to, or the sending of any
notice to SEIS, Modis, and Cayenta requesting, additional capital contributions,
credit support or Member loans pursuant to Section 4.03;

                  (ii) other than pursuant to the types of contracts described
in clause (vii) below, the incurrence, issuance, assumption or refinancing of
any Debt of the Company if the aggregate amount of such Debt and all other
outstanding Debt of the Company exceeds $5,000,000, other than Member loans,
credit supports or other extensions of credit to or for the benefit of the
Company as contemplated by Section 4.03;

                  (iii) the declaration, making or payment of any dividend or
distribution (whether in cash, securities or other property) to the Members or
otherwise;

                  (iv) the termination of any President, Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, General Manager,
President or Senior Vice President, or any person who performs similar
functions, or the selection or replacement of the independent auditors of the
Company; the appointment of any Chief Operating Officer, General Manager,
President or Senior Vice President, or any person who performs similar
functions;

                  (v) unless required by law or a change in GAAP, the making of
any material change in the accounting methods of the Company;

                  (vi) the initial public offering of securities by the Company
or the Conversion of the Company into a Corporation in connection therewith or
otherwise, including the authorization, issuance and sale by the Company of any
Membership Unit or other equity interest (or option, warrant, conversion or
similar right with respect to any equity interest) in or of the Company in
connection therewith.

            (d) To avoid confusion, the President and/or Chief Financial Officer
of the Company are authorized to enter into contracts and commitments on behalf
of the Company up to a maximum $1 million and the Management Committee is
authorized to enter into such contracts and commitments up to a maximum of $5
million, without obtaining approval from the Members Committee.

                                       17
<PAGE>

            SECTION 6.05 Management Committee.

            (a) The Members Committee may, by resolution passed by a Majority
Vote, appoint a Management Committee of three members, to serve at the pleasure
of the Members Committee, to consist of one member designated by each Member,
including as one of such three members, the President of the Company. Each
designee of a Member shall also be one of its Representatives. The Chairman of
the Management Committee, who shall preside over meetings of the Executive
Committee, shall be the President. The initial members of the Management
Committee are named on Schedule 6.03. Any member of the Management Committee may
be removed or replaced by the Member that designated such member.

            (b) In addition to the members of the Management Committee,
designees, officers, directors, employees or other representatives (including
the accountants, attorneys and/or financial advisors) of a Member and its
Affiliates shall be permitted to attend Management Committee meetings as
observers, in accordance with non-discriminatory rules to be adopted by the
Management Committee.

            (c) The Management Committee shall, by a vote of a majority of its
members, fix its own times and places of meeting, and prescribe its own rules of
procedure, no change in which shall be made save by a majority vote of its
members; provided, that no such rule shall be inconsistent with any provision of
this Agreement.

            (d) During the intervals between the meetings of the Members
Committee, except as otherwise provided by the Members Committee in the
resolutions establishing the Management Committee or otherwise, the Management
Committee shall possess and may exercise all the powers of the Members Committee
in the management and direction of the business and affairs of the Company which
are legally delegable to a committee of Members; provided, that the Management
Committee shall not have the power to take any of the actions that require a
Unanimous Vote or Majority Vote of the entire Members Committee pursuant to
Section 6.04. All action taken by the Management Committee shall be subject to
review, amendment and repeal by the Members Committee; provided, that no rights
of third parties shall be adversely affected by any such review, amendment or
repeal. A quorum shall be at least two-thirds (2/3) of all members of the
Management Committee.

            SECTION 6.06 Action by Written Consent. Any action required or
permitted to be taken by the Managing Members, the Members Committee or the
Management Committee, either at a meeting or otherwise, may be taken without a
meeting if Managing Members or Representatives having not less than the same
voting power required to approve such action at a meeting of the Managing
Members, the Members Committee or the Management Committee, as the case may be,
consent in writing and the writing or writings are filed with the minutes of
proceedings of the Managing Members, the Members Committee or the Management
Committee, as the case may be. At least two Business Days prior to the
effectiveness of any such action, written consent will be given by the President
or Secretary of the Company to those Managing Members who have not consented in
writing.

                                       18
<PAGE>

            SECTION 6.07 Telephonic Meetings. Managing Members and
Representatives may participate in a meeting of the Managing Members, the
Members Committee or the Management Committee, as the case may be, by means of a
conference telephone or similar communications equipment through which all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at such meeting.

            SECTION 6.08 Company Minutes. The decisions and resolutions of the
Members, the Members Committee and the Management Committee shall be reported in
minutes, which shall state the date, time and place of the meeting (or the date
of the written consent in lieu of meeting), the Members or Representatives, as
the case be, present at the meeting, the resolutions put to a vote (or the
subject of a written consent) and the results of such voting (or written
consent). The minutes shall be entered in a minute book kept at the principal
office of the Company and a copy of the minutes shall be provided to each
Managing Member. All action by the Management Committee shall be reported
promptly to the Members Committee.

            SECTION 6.09 No Reimbursements. Except as set forth in this
Agreement or in any Related Agreement, or otherwise agreed upon by the Members
Committee, the Company shall not reimburse the Members for any expenses incurred
by the Members on behalf of the Company.

            SECTION 6.10 Partition. Until termination of the Company, each
Member hereby specifically renounces, waives and forfeits all rights, whether
arising under contract or statute or by operation of law, to seek, bring or
maintain any action in any court of law or equity for partition of the Company,
or any interest which is considered to be Company assets, regardless of the
manner in which title to any such assets may be held.

            SECTION 6.11 Officers.

            (a) The Company shall have employees or agents who are denominated
as officers (including, but not limited to a President, one or more
Vice-Presidents, a Chief Financial Officer or a Treasurer, one or more Assistant
Treasurers, a Secretary, and one or more Assistant Secretaries), as the Members
Committee may designate from time to time (the "Officers"). The initial chief
executive officer of the Company shall be the President. The President shall be
a designee of SEIS.

            (b) The Officers shall be responsible for implementing the decisions
of the Members Committee and Management Committee and for conducting the
ordinary and usual business and affairs of the Company, including, subject to
the policies and limitations established by, and the supervision of, the Members
Committee or Management Committee and subject to the terms of this Agreement,
including, without limitation, Section 6.04:

                                       19
<PAGE>

                  (i) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Company;

                  (ii) the acquisition or disposition of assets in the ordinary
course of the Company Business;

                  (iii) the use of the assets of the Company (including, without
limitation, the financing of the conduct of the operations of the Company, the
lending of funds to other Persons and the repayment of obligations of the
Company);

                  (iv) the maintenance of insurance for the benefit of the
Members and the Company; and

                  (v) the control of any matters affecting the rights and
obligations of the Company, including, without limitation, the bringing and
defending of actions at law or in equity and otherwise engaging in the conduct
of litigation and the incurring of legal expenses and settlement of claims and
litigation up to $250,000 in amount.

            (c) The Officers shall be entitled to receive for their services to
the Company such compensation as may be determined by the Members Committee from
time to time, such compensation to be paid by the Company. The Officers shall at
all times be subject to the supervision and control of the Members Committee and
shall conform to policies and programs established by the Members Committee, and
the scope of the Officers' authority shall be limited to such policies and
programs. The acts of the Officers shall bind the Company when conducted within
the scope of the authority of such Officers. Except as otherwise authorized by
the Members Committee or the President, no other Person shall have authority to
bind or act for, or assume any obligations or responsibilities on behalf of, the
Company. The Officers shall keep the Members Committee informed as to all
matters of concern to the Company.

            (d) Nothing in this Section 6.11 shall be construed so as to limit
the authority of the Managing Members, in their capacities as such, to act for
and bind the Company.

                                   ARTICLE VII
                            ALLOCATIONS; TAX MATTERS

            SECTION 7.01 Allocations.

            (a) The Company's Net Profits and Net Losses, subject to the special
allocations pursuant to Sections 7.02 and 7.03, shall be allocated for each
fiscal year to the Members as follows:

                                       20
<PAGE>

                  (i) the Company's Net Profits shall be allocated to the
Members pro rata in accordance with the number of Membership Units owned by each
Member; and

                  (ii) the Company's Net Losses shall be allocated to the
Members, pro rata in accordance with the number of Membership Units owned by
each Member.

            (b) Notwithstanding anything to the contrary in Section 7.01(a), in
the event of the winding up and dissolution of the Company pursuant to Section
11.04 hereof, Net Profit and Net Losses (and items of gross income, loss or
deduction, if necessary), including gain or loss realized by the Company upon
the sale (or deemed sale) of its property or assets, shall be allocated to the
extent possible, subject to the special allocations of Sections 7.02 and 7.03,
in a manner so as to cause the Capital Accounts of the Members to equal the
amounts due the respective Members in accordance with the provisions of Section
11.04.

            SECTION 7.02 Special Allocations.

            (a) Minimum Gain Chargeback. Except as otherwise provided in Section
1.704-2(f) of the Regulations, notwithstanding any other provision of this
Article VII, if there is a net decrease in Company Minimum Gain during any
fiscal year, each Member shall be specially allocated items of Company income
and gain for the fiscal year (and, if necessary, subsequent fiscal years) in an
amount equal to such Member's share of the net decrease in Company Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Sections 1.704-2(f)(6)
and 1.704-2(j)(2) of the Regulations. This Section 7.02(a) is intended to comply
with the minimum gain chargeback requirement in Section 1.704-2(f) of the
Regulations and shall be interpreted consistently therewith.

            (b) Member Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
this Section 7, if there is a net decrease in Member Nonrecourse Debt Minimum
Gain attributable to a Member Nonrecourse Debt during any Allocation Year, each
Member who has a share of the Member Nonrecourse Debt, determined in accordance
with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated
items of Company income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Member's share of the
net decrease in Member Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amount required to be allocated to
each Member pursuant thereto. The items to be so allocated shall be determined
in accordance with Sections 1.704-2(i)(4) of the Regulations. This Section
7.02(b) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently
therewith.

            (c) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of
the Regulations, items of Company gross

                                       21
<PAGE>

income and gain shall be specially allocated to each such Member in an amount
and manner sufficient to eliminate, to the extent required by the Regulations,
the Adjusted Capital Account Deficit of such Member as quickly as possible;
provided, that an allocation pursuant to this Section 7.02(c) shall be made only
if and to the extent that such Member would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article VII have been
tentatively made as if this Section 7.02(c) were not in the Agreement.

            (d) Gross Income Allocation. In the event any Member has a deficit
Capital Account at the end of any fiscal year which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provision of
this Agreement, and (ii) the amount such Member is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated
items of Company gross income and gain in the amount of such excess as quickly
as possible; provided, that an allocation pursuant to this Section 7.02(d) shall
be made only if and to the extent that such Member would have a Adjusted Capital
Account Deficit in excess of such sum after all other allocations provided for
in this Article VII have been made as if Section 7.02(c) and this Section
7.02(d) were not in the Agreement.

            (e) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year shall be allocated to the Members, pro rata, in accordance with the number
of Membership Units owned by such Member.

            (f) Member Loan Deductions. All items of Company gross deduction and
loss attributable to a Member loan which constitutes partner nonrecourse debt
within the meaning of Regulations Section 1.704-2(b)(4) shall be allocated to
the Member or Members that bear the economic risk of loss for such loan in
accordance with Regulations Section 1.704-2(i)(1).

            (g) Net Losses Limitation. The Net Losses and items of Company gross
deduction or loss allocated pursuant to Sections 7.01 and 7.02 shall not exceed
the maximum amount of Losses and items of deduction and loss that can be so
allocated without causing any Member to have an Adjusted Capital Account Deficit
at the end of any Fiscal Year. All Net Losses and items of Company gross
deduction or loss in excess of the limitations set forth in this Section 7.02
shall be allocated to the Members who do not have Adjusted Capital Account
Deficit in proportion to their Adjusted Capital Accounts.

            SECTION 7.03 Curative Allocations. The allocations set forth in
Section 7.02 hereof (the "Regulatory Allocations") are intended to comply with
certain requirements of the Regulations. It is the intent of the Members that,
to the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of
Company income, gain, loss or deduction pursuant to this Section 7.03.
Therefore, notwithstanding any other provision of this Article VII (other than
the Regulatory Allocations), the Members shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner they
determine appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible,

                                       22
<PAGE>

equal to the Capital Account balance such Member would have had if the
Regulatory Allocations were not part of the Agreement and all Company items were
allocated pursuant to this Article VII without regard to the Regulatory
Allocations. In exercising their discretion under this Section 7.03, the Members
shall take into account future Regulatory Allocations under Section 7.02 that,
although not yet made, are likely to offset other Regulatory Allocations
previously made under Section 7.02.

            SECTION 7.04 Other Allocation Rules.

            (a) Solely for purposes of determining the Members' proportionate
share of the "excess nonrecourse liabilities" of the Company within the meaning
of Regulations Section 1.752-3(a)(3), the Members' interests in Company profits
are in proportion to their ownership of Membership Units.

            (b) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Members shall endeavor to treat distributions of cash as having
been made from the proceeds of a nonrecourse liability only to the extent that
such distributions would cause or increase an Adjusted Capital Account Deficit
for any Member.

            (c) If the number of Membership Units owned by any Member changes
during the fiscal year, the Company's Net Profits and Net Losses for that fiscal
year shall be allocated evenly among each day of the fiscal year, and each
Members' share of Net Profits and Net Losses for such fiscal year shall be the
sum of its shares of the Net Profits and Net Losses for each day during the
fiscal year.

            SECTION 7.05 Tax Allocation.

            (a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect to any property
contributed to the capital of the Company shall, solely for tax purposes, be
allocated among the Members so as to take account of any variation between the
adjusted basis of such property to the Company for Federal income tax purposes
and its initial Asset Value (computed in accordance with the definition of Asset
Value).

            (b) In the event the Asset Value of any Company asset is adjusted
pursuant to subparagraph (ii) of the definition of Asset Value, subsequent
allocations of income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset for
Federal income tax purposes and its Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder.

            (c) Any elections or other decisions relating to such allocations
shall be made by the tax matters Member in any manner that reasonably reflects
the purpose and intention of this Agreement. Allocations pursuant to this
Section 7.05 are solely for purposes of Federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Net Profit, Net Losses, other items, or
distributions pursuant to any provision of this Agreement.

                                       23
<PAGE>

            (d) Except as otherwise provided in this Agreement, all items of
Company gain, loss, deduction, and any other allocations not otherwise provided
for shall be divided among the Members in the same proportion as they share Net
Profit or Net Losses, or amounts specially allocated pursuant to Section 7.02 or
7.03 hereof, as the case may be, for the fiscal year.

            SECTION 7.06 Tax Decisions.

            (a) The Company shall file as a partnership for Federal and state
income tax purposes. All elections required or permitted to be made by the
Company, and all other tax decisions and determinations relating to Federal,
state or local tax matters, shall be made by the tax matters Member, in
consultation with the Managing Members and the Company's attorneys and/or
accountants. Tax audits, controversies and litigations shall be conducted under
the direction of the tax matters Member. The tax matters Member shall submit to
the Members, for their review and comment, any settlement or compromise offer
with respect to any disputed item of income, gain, loss, deduction or credit of
the Company. SEIS shall be the initial tax matters Member within the meaning of
Section 6231(a)(7) of the Code. The tax matters Member shall furnish to the
Members a copy of all notices or other written communications received by the
tax matters Member from the Internal Revenue Service or any state of local
taxing authority. The tax matters Member shall cause all tax returns of the
Company to be timely filed. Copies of such returns shall be kept at the
Company's principal place of business or at such other place as the tax matters
Member shall determine and shall be available for inspection by the Members or
their duly authorized representatives during regular business hours. The tax
matters Member shall distribute to each of the Members, as soon a practicable
after the end of the fiscal year of the Company, information with respect to the
Company necessary for each Member to prepare its Federal, state and local tax
returns.

            (b) The Managing Members may, by Majority Vote, amend the provisions
of this Agreement relating to the manner in which tax items are allocated to the
extent necessary to comply with Regulations Sections 1.704-1(b) and 1.704-2;
provided, however, that any such amendment may be made only if it is not likely
to have a material effect on the amounts distributable to any Member pursuant to
Article XI hereof upon the liquidation of the Company.

                                       24
<PAGE>

                                  ARTICLE VIII
                                  DISTRIBUTIONS

            SECTION 8.01 Distributions.

The Members Committee, as determined in accordance with Article VI, may make
distributions to the Members, pro rata in accordance with their respective
Membership Units.

            SECTION 8.02 Liquidation Distributions. Distributions made upon
liquidation of the Company shall be made as provided in Section 11.04.

            SECTION 8.03 Distribution Rules.

            (a) All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment, distribution or
allocation by the Company to the Members shall be treated as amounts distributed
to the Members pursuant to this Article VIII for all purposes of this Agreement.
The President is authorized and directed to withhold from distributions, or with
respect to allocations, to the Members and to pay over to any Federal, state or
local government any amounts required to be so withheld pursuant to the Code or
any provision of any other Federal, state or local law and shall allocate such
amounts to those Members with respect to which such amounts were withheld.
Promptly upon learning of any requirement under any provision of the Code or any
other applicable law requiring the Company to withhold any sum from a
distribution to a Member or to make any payment to any taxing authority in
respect of such Member, the Company shall give written notice to such Member of
such requirement and, if practicable and if requested by such Member, shall
cooperate with such Member in all lawful respects to minimize or to eliminate
any such withholding or payment.

            (b) A Member shall not have the status of, and is not entitled to
the remedies available to, a creditor of the Company with regard to
distributions on its Membership Units that such Member becomes entitled to
receive pursuant to this Agreement and the Delaware Act.

            (c) If any amounts owed by a Member to the Company pursuant to any
of the Related Agreements are then due and payable, the Company shall have the
right to withhold and offset all or part of such amounts from and against any
distributions otherwise payable to such Member.

            SECTION 8.04 Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Member on account of its Membership Units, if (i)
such distribution would violate Section 18-607(a) of the Delaware Act or other
applicable law, (ii) such distribution would be made from funds other than Net
Distributable Cash, (iii) any costs or expenses directly incurred by SEIS,
Modis, Cayenta and/or their Affiliates in providing any Member loan, credit
support or other extension of credit to or for the benefit of the Company, or
any regular quarterly payment of principal theretofore due in respect of any
such Member loan, credit support or other extension of credit, or any mandatory
prepayment based on Net Distributable Cash contemplated by the proviso in
Section 4.03(c) above), or any interest thereon, shall in any such case be due
and

                                       25
<PAGE>

remain unpaid, provided that this clause (iii) shall not prohibit distributions
in accordance with Sections 8.05(a)(i) and (ii) prior to such mandatory
prepayments, or if such mandatory prepayment or other payments shall be made
from borrowed funds or otherwise on credit, or (iv) any amount then due and
payable by the Company to any Member pursuant to any of the Related Agreements
remains outstanding and unpaid.

            SECTION 8.05 Distribution Priority. Distribution Priority
Distributions (including the payments contemplated by clause (a)(ii) below which
shall not be an equity transaction), other than distributions upon the
liquidation of the Company, and contractual or guaranteed payments, whether in
respect of Net Distributable Cash of the Company or otherwise, shall be made to
the Members as follows and in the following order of priority:

            (a) The following distributions (including the payments contemplated
by clause (ii) below which shall not be an equity transaction) shall be made
each quarter, unless determined otherwise by an Unanimous Vote of the Members:

                  (i) After the end of each Fiscal Year, to the extent
permissible pursuant to financing agreements to which the Company is now or
hereafter may become a party, the Company shall distribute to each Member the
aggregate amount by which (A) United States federal and state income taxes that
would be payable by a Member in the highest tax bracket applicable from time to
time to a corporation (and taking into account the character of such income),
with respect to the taxable income and gains of the Company allocated to such
Member for the Fiscal Year of the Company ending in such year and for all prior
Fiscal Years, and after giving effect to all deductions and losses of the
Company allocated to such Member for such Fiscal Year and prior Fiscal Years, if
applicable (and in each case applying such highest applicable tax brackets
thereto), exceeds (B) all amounts previously distributed (or deemed distributed)
to such Member in respect of its Membership Interest pursuant to this Agreement.
Subject to the limitations set forth above, the Company will, where reasonably
practicable, make distributions on a quarterly basis to facilitate the payment
of quarterly estimated income taxes by the Members, subject to adjustment at or
following the end of such calendar year, as the Company may deem appropriate
(including the right of the Company to require prompt repayment of amounts
distributed under this sentence in excess of that ultimately determined to be
required to be distributed for such period).

                  (ii) Thereafter, distributions to the Members will be made in
respect of the outstanding balance of all debts and liabilities of the Company
to the Members to whom the same are owed, including Member loans and amounts
payable to withdrawing members pursuant to Section 10.06, in the ratio of the
aggregate outstanding amount owed to each such Member by the Company, until paid
in full.

            (b) Thereafter, the following distributions shall be made if, as and
then only to the extent determined from time to time by a Majority Vote of the
Members in the sole and absolute discretion of such majority in interest:

                                       26
<PAGE>

                  (i) Distributions to the Members will be made in the ratio of
their respective Membership Units.

            (c) Distributions in connection with the liquidation of the Company
shall be made as provided in Article XI hereof.

                                   ARTICLE IX
                     BOOKS AND RECORDS; FINANCIAL STATEMENTS

            SECTION 9.01 Books and Records; Financial Statements

            (a) At all times during the continuance of the Company, the Company
shall maintain separate books of account for the Company that shall show a true
and accurate record of all costs and expenses incurred, all charges made, all
credits made and received and all income derived in connection with the
operation of the Company Business in accordance with GAAP consistently applied,
and, to the extent inconsistent therewith, in accordance with this Agreement.
Such books of account, together with a complete and correct copy of this
Agreement and of the Articles, shall at all times be maintained at the principal
place of business of the Company and shall be open to inspection and examination
at reasonable times by each Member and its duly authorized representatives for
any purpose reasonably related to such Member's interest in the Company. The
books of account and the records of the Company shall be examined by and
reported upon as of the end of each Fiscal Year by a firm of independent
certified public accountants that shall be selected by the Members Committee
from among the five largest U.S. accounting firms (the "Auditors"). Any Member
shall have the right to have a private audit of the Company books and records
conducted at reasonable times and after reasonable advance notice to the Company
for any purpose reasonably related to such Member's interest in the Company, but
any such private audit shall be at the expense of the Member desiring it, and it
shall not be paid for out of Company funds. Such private right to audit the
books and records of the Company shall also include the right to audit and make
recommendations regarding the internal control systems, policies and procedures
and compliance therewith of the Company.

            (b) The President, Chief Financial Officer, Treasurer or Controller
shall prepare and maintain, or cause to be prepared and maintained, the books of
account of the Company and the following financial information, prepared, in the
case of (i)(A), (i)(B) and (i)(C) below in accordance with GAAP, and in the case
of (i)(A), on an accrual basis, together with an operating report in a form to
be determined by the Members Committee analyzing such information, shall be
transmitted by the President, Chief Financial Officer, Treasurer or Controller
to each Member at the times hereinafter set forth:

                  (i) Within 60 days after the close of each Fiscal Year, the
following financial statements, examined by and certified to by the Auditors:

                                       27
<PAGE>

                        (A) the balance sheet of the Company as of the close of
such Fiscal Year;

                        (B) a statement of Company Net Profits and Net Losses
for such Fiscal Year;

                        (C) a statement of the Company's cash flows for such
Fiscal Year; and

                        (D) a statement of such Member's Capital Account as of
the close of such Fiscal Year, and changes therein during such Fiscal Year.

                  (ii) Within 60 days after the close of each Fiscal Year, a
statement indicating such Member's share of each item of Company income, gain,
loss, deduction or credit for such Fiscal Year for income tax purposes.

                  (iii) As soon as available and in any event within 30 days
after the end of each three-month period, balance sheets of the Company as of
the end of such three-month period and statements of income and Company Net
Profits and Net Losses for the period commencing at the end of the previous
fiscal year and ending with the end of such three-month period, certified by the
President, Chief Financial Officer, Treasurer or Controller of the Company.

                  (iv) As soon as practicable and in any event within 20 days
following the end of each calendar month, a monthly operating summary of the
Company's activities in a form to be established by the Members' Committee.

            (c) Each Member shall provide to the President, Chief Financial
Officer, Treasurer or Controller upon request tax basis information about
contributed assets and other tax information reasonably requested by the
President, Chief Financial Officer, Treasurer or Controller.

            SECTION 9.02 Reporting Requirements. The President shall furnish or
cause to be furnished to each Member:

            (a) as soon as possible and in any event within ten days after the
Company has received notice of the occurrence of any default or event of default
continuing on the date of such statement under any agreement relating to any
material obligation of the Company, a statement of the President setting forth
details of such default or event of default and the action which the President
has taken and proposes to take with respect thereto;

            (b) promptly after the sending or filing thereof, copies of all
material reports that the Company sends to any of its creditors, and copies of
all income tax returns that the Company files with any federal or state taxing
authority;

                                       28
<PAGE>

            (c) within 15 days of the filing by the tax matters Member of the
Company's federal tax return (Federal Form 1065), a copy of Schedule K-1 of
Federal Form 1065 reporting the Member's allocable share of Net Profits, Net
Losses and other items of income, gain, deductions or loss for such Fiscal Year;
and, from time to time, such additional information as the Member may reasonably
require for tax purposes;

            (d) on a quarterly basis, a copy of the report from Modis, Cayenta
and SEIS pursuant to its Management Services Agreement, stating, among other
things, its current accomplishments, problems/issues, upcoming events, schedule
progress, budget versus actual revenues and expenses and such other information
regarding the condition or operations, financial or otherwise, of the Company as
any Member may from time to time reasonably request.

                                    ARTICLE X
                     TRANSFERABILITY AND ADDITIONAL MEMBERS

            SECTION 10.01 General Restrictions on Transfer

            (a) No Transfer may be made by any Member of all or any part of its
Membership Units in the Company or Member loan except pursuant to the Unanimous
Vote of the Members Committee, except that a Member may transfer its Membership
Units or Member loan to an Affiliate without the consent of the other Members so
long as neither the Company nor any non-Transferring Member shall incur any
additional liability as a result of such Transfer and the Transferring Member
shall not be released from any liability or obligation under this Agreement or
any Related Agreement. Notwithstanding the foregoing, any Member or Affiliate of
a Member may pledge, hypothecate or grant a Lien on any Member loan in
connection with such Member's financing thereof.

            (b) Each time a Member proposes to transfer all or any part of its
Membership Units (or as required by operation of law or other involuntary
transfer to do so), such Member shall first offer such Membership Units to the
Company and the non-transferring Members in accordance with the following
provisions:

                  (i) Such Member shall deliver a written notice ("Option
Notice") to the Company and the other Members stating such Member's bona fide
intention to transfer such Membership Units, the Membership Units to be
transferred, the purchase price and terms of payment for which the Member
proposes to transfer such Membership Units and the name and address of the
proposed transferee.

                  (ii) Within thirty (30) days after receipt of the Option
Notice, the Company shall have the right, but not the obligation, to elect to
purchase all or any part of the Membership Units upon the price and terms of
payment designated in the Option Notice. If the Option Notice provides for the
payment of non-cash consideration, the Company may elect to pay the
consideration in cash equal to the good faith estimate of the present fair
market value of

                                       29
<PAGE>

the non-cash consideration offered as determined by the Management Committee. If
the Company exercises such right within such thirty (30) day period, the
Management Committee shall give written notice of the fact to the transferring
and non-transferring Members.

                  (iii) If the Company fails to elect to purchase the entire
Membership Units proposed to be transferred within the thirty (30) day period
described in Section 10.01(b)(ii), the non-transferring Members shall have the
right, but not the obligation, to elect to purchase any remaining share of such
Membership Units upon the price and terms of payment designated in the Option
Notice. If the Option Notice provides for the payment of non-cash consideration,
such purchasing Members each may elect to pay the consideration in cash equal to
the good faith estimate of the present fair market value of the non-cash
consideration offered as determined by the Management Committee. Within sixty
(60) days after receipt of the Option Notice, each non-transferring Member shall
notify the Management Committee in writing of its desire to purchase a portion
of the Membership Units proposed to be so transferred. The failure of any Member
to submit a notice within the applicable period shall constitute an election on
the part of that Member not to purchase any of the Membership Units which may be
so transferred. Each Member so electing to purchase shall be entitled to
purchase a portion of such Membership Units in the same proportion that the
Units of such Member bears to the aggregate of the Units of all of the Members
electing to so purchase the Membership Units being transferred. In the event any
Member elects to purchase none or less than all of its pro rata share of such
Membership Units, then the other Members can elect to purchase more than their
pro rata share.

                  (iv) If the Company and the other Members elect to purchase or
obtain any or all of the Membership Units designated in the Option Notice, then
the closing of such purchase shall occur within ninety (90) days after receipt
of such notice and the transferring Member, the Company and/or the other Members
shall execute such documents and instruments and make such deliveries as may be
reasonably required to consummate such purchase.

                  (v) If the Company and the other Members elect not to purchase
or obtain, or default in their obligation to purchase or obtain, all of the
Membership Units designated in the Option Notice, then the transferring Member
may transfer the portion of the Membership Units described in the Option Notice
not so purchased, to the proposed transferee, providing such transfer is
completed within thirty (30) days after the expiration of the company's and the
other Members' right to purchase such Membership Units, is made on terms no less
favorable to the transferring Member than as designated in the Option Notice. If
such Membership Units are not so transferred, the transferring Member must give
notice in accordance with this Section prior to any other or subsequent transfer
of such Membership Units.

            (c) In the case of permitted Transferees, any Transferee of a
Membership Units (including an Affiliate of the transferor) shall be admitted as
a Member only after such Transferee agrees to assume all obligations of the
transferor hereunder and otherwise be bound by the provisions of this Agreement.

            (d) Any Person that becomes a Member after the date hereof, accepts,
ratifies and agrees to be bound by all actions duly taken pursuant to the terms
and provisions of this

                                       30
<PAGE>

Agreement by the Company prior to the date such Person became a Member and,
without limiting the generality of the foregoing, specifically ratifies and
approves all agreements and other instruments as may have been executed and
delivered on behalf of the Company prior to such date and which are in force and
effect on such date.

            (e) Each Transfer of all or a part of Membership Units (other than
any Transfer of all or part of Membership Units or any interest therein upon
foreclosure of a security interest created in such Membership Units) to a
permitted Transferee shall entitle such Transferee to share in such Net Profits
and Net Losses, to receive such distributions, and to receive such allocations
of income, gain, loss, deduction or credit or similar item to which the
transferor was entitled, but only to the extent of the transferred Membership
Units. Such Transfer shall also give a permitted Transferee the right to
participate in the management of the Company through voting or otherwise and any
other rights exercisable by a Member or, in the case of a Transfer by a Managing
Member, such Managing Member, subject to the compliance of such Transferee with
the provisions of paragraph (b) above and the admission of such Transferee as a
Member.

            (f) Notwithstanding the above, a Managing Member may transfer up to
twenty per cent (20%) of its initial Membership Units to one or more of its
employees. Such Transfer shall entitle such Transferee to share in such Net
Profits and Net Losses, to receive such distributions, and to receive such
allocations of income, gain, loss, deduction or credit or similar item to which
the transferor was entitled, but only to the extent of the transferred
Membership Units. Such Transfer shall not give such employee Transferee the
right to participate in the management of the Company through voting or
otherwise nor any other rights exercisable by a Member.

            SECTION 10.02 Recognition of Transfer by Company. No Transfer of
Membership Units, or any part thereof, that is in violation of this Article X
shall be valid or effective, and neither the Company nor the Members shall
recognize the same for the purpose of making distributions pursuant to Section
8.01 hereof with respect to such Membership Units or part thereof. Neither the
Company nor the non-transferring Members shall incur any liability as a result
of refusing to make any such distributions to the Transferee of any such invalid
Transfer.

            SECTION 10.03 Indemnification. In the case of a Transfer or
attempted Transfer of an interest in the Company contrary to the provisions of
Section 10.01 hereof, the parties engaging or attempting to engage in such
Transfer shall indemnify and hold harmless the Company and each of the other
Members from all costs, liabilities or damages that any of such indemnified
Persons may incur (including, without limitation, incremental tax liability and
lawyers' fees and expenses) as a result of such Transfer or attempted Transfer
and efforts to enforce terms of this Agreement and the indemnity granted hereby.

            SECTION 10.04 Effective Date of Transfer. Any valid Transfer of a
Membership Units in the Company, or part thereof, shall be effective as of the
close of business on the last day of the calendar month in which such Transfer
occurs. The Company shall, from the effective date of such Transfer, thereafter
pay all further distributions on account of the Membership Units (or part
thereof) so transferred, to the Transferee of such interest, or part

                                       31
<PAGE>

thereof. As between any Member and its Transferee, Net Profits and Net Losses
for the Fiscal Year of the Company in which such Transfer occurs shall be
apportioned for federal income tax purposes in accordance with any convention
permitted under Code Section 706(d) and selected by the transferring Member and
its Transferee.

            SECTION 10.05 Additional Transfer Provisions. In the case of any
Transfer under this Article X:

            (a) Except as otherwise provided in this Section 10.05, upon the
Transfer of the entire Membership Units of a Member, such Member shall have no
further obligations as a Member pursuant to this Agreement, except that (i) the
obligations of such Member pursuant to Section 14.01 shall survive for a period
of twelve (12) months after the Transfer in accordance with the terms thereof
and Section 14.04 shall survive indefinitely, (ii) the obligations of such
Member pursuant to Article XV and Sections 17.02 and 17.10 shall survive for a
period of 24 months after the effective date of such Transfer, unless a claim
for indemnification shall have been made under Section 15.02 prior to the
expiration of such 24-month period, in which case such Member's obligations
under Article XV shall survive until the final disposition of such claim
pursuant to a binding settlement, non-appealable decision of a court of law or
otherwise, and (iii) if such Member shall transfer its Membership Units to an
Affiliate, such Member shall not be released from any liability or obligation
under this Agreement, and for purposes of all provisions of this Agreement which
are based on or calculated with respect to such date of Transfer, including
without limitation, the provisions of Section 10.05(b), 10.06 and 14.01 (but
other than the second sentence of Section 10.04), the date of Transfer shall be
deemed the date such Membership Units shall become owned by a Person other than
the Member or an Affiliate. The contractual rights and obligations of such
Member to the Company (other than pursuant to this Agreement) shall remain
unaffected unless otherwise provided in paragraph (b) below.

            (b) Upon the Transfer of a Member's Membership Units (other than to
an Affiliate), the following specific provisions shall apply (which provisions
illustrate and clarify the provisions of paragraph (a) above):

                  (i) such Member shall no longer have any obligation to make
Capital Contributions or provide credit support or make Member loans, pursuant
to Section 4.01 or 4.03, but any assets or cash contributed to the Company prior
to the date of such Transfer shall remain property of the Company;

                  (ii) such Member shall continue to provide to the Company the
Dedicated Assets provided by it, so long as requested by the Company (and shall
be entitled to continue to receive compensation therefor), in accordance with
Section 4.02, but not longer than one hundred eighty (180) days after the
Transfer,

                  (iii) any License Agreement between such Member and the
Company shall remain in effect in accordance with its terms;

                                       32
<PAGE>

                  (iv) any Management Services Agreement between such Member and
the Company shall remain in effect in accordance with its terms, so long as
requested by the Company, but not more than one hundred eighty (180) days after
the Transfer;

                  (v) such Member shall have no further obligation to make
certain Persons available to perform services in accordance with Section
12.01(a); and

                  (vi) Persons who become employees of the Company in accordance
with Section 12.01(b) shall remain employees of the Company.

            (c) The Transferee or Transferees, as the case may be, shall be
required to pay any and all filing and recording fees, fees of counsel and
accountants and other costs and expenses reasonably incurred by the Company as a
result of such Transfer.

            (d) No such Transfer of Membership Units shall be made except upon
terms which would not, in the opinion of counsel to the Company, result in a
violation of the Securities Act of 1933, as amended, or any "Blue Sky" laws or
other securities laws of any state of the United States applicable to the
Company or the Membership Interest to be transferred.

            (e) Notwithstanding any other provision of this Article X, no
Transfer of Membership Units will occur (a) unless and until any and all
necessary regulatory approvals and third-party approvals have been obtained,
including, without limitation, expiration of any applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
(b) if such transfer would (x) cause the Company or any Member to become subject
to any statute, rule, regulation, order or injunction that would impose material
limitations or restrictions on its ability to conduct the Company Business.

            SECTION 10.06 Withdrawal.

            (a) Each Member shall have the right, upon thirty (30) days prior
written notice of its desire to withdraw given to all other Members, to withdraw
from the Company and resign as a Member at any time, commencing on the
expiration of thirty-six (36) full calendar months after the month in which this
Agreement is executed. Such notice shall become effective upon the expiration of
such thirty (30) day period, and shall specify a time and date (which shall not
be less than thirty (30) days following the determination of the Fair Market
Value) for the purchase of such Membership Units. No Member may otherwise
withdraw from the Company or resign as a Member except as a result of a Transfer
made in accordance with this Article X or upon dissolution in accordance with
Article XI. If any Member withdraws from the Company or resigns as a Member in
breach of this provision, such withdrawal or resignation shall be of no force or
effect. The withdrawal of a Member shall not dissolve the Company.

            (b) Upon the withdrawal or resignation of any Member for any reason,
the following shall apply:

                                       33
<PAGE>

                  (i) all Customer Contracts shall remain the property of the
Company;

                  (ii) the provisions of Section 10.05 shall apply with respect
to such Member as if it affected a Transfer, including without limitation, the
provisions of Section 14.01 for a period of twelve (12) months after the date of
such withdrawal;

                  (iii) if the Company is continued in accordance with Section
11.02(d) after the expiration of the fiscal quarter after the quarter in which
the closing shall occur, the withdrawing Member shall be entitled to receive,
subject to the Delaware Act, the Fair Market Value of its Membership Units,
determined in accordance with Section 11.02, as of the date of withdrawal,
except that the cost of determining the Fair Market Value shall be borne 50% by
the Company and 50% by the withdrawing Member. The interest of any Member who
has given notice of its desire to withdraw shall thereafter not be included in
calculating the requisite number of Members or percentage of interests required
for action of the Company; and

                  (iv) all Member loans, credit supports and other extensions of
credit to or for the benefit of the Company by the withdrawing Member shall be
payable on the same terms as if such Member did not so withdraw, including
distributions in accordance with Section 8.05(a)(iii).

            (c) The closing of such purchase of such Membership Units shall take
place at the offices of the Company in accordance with, and at the time
specified in, such notice of withdrawal. The purchase price for the Membership
Interest shall be paid out of the Net Distributable Cash of the Company (if any)
to the extent that such purchase price balance plus the purchase price balance
resulting from any other purchase by the Company of a Membership Interest does
not exceed 50% of such Net Distributable Cash. In the event the Company shall
have any such purchase price payment obligations to two or more Members, the
amount payable out of such Net Distributable Cash for any given period shall be
allocated pro rata among such Members. Subject to the foregoing, payments in
respect of the Membership Units of a withdrawn Member shall be made quarterly,
out of Net Distributable Cash (if any) on the same basis as, and pro rata with,
mandatory prepayments of the principal amount of Member loans pursuant to
Section 8.05(a)(iii). The remaining purchase price balance for any such purchase
and sale shall be due and payable on the fifth (5th) anniversary of the date of
withdrawal, and shall bear interest at a rate equal to the rate announced from
time to time by the principle lending bank to SEIS, as its prime rate, or in the
absence thereof at the prime rate published in The Wall Street Journal or an
analogous publication selected by SEIS.

            (d) On the closing date, such withdrawing Member shall pay to the
Company any and all liabilities and monetary obligations of the withdrawing
Member to the Company or to any other Member, and the Company shall be entitled
to deduct from the purchase price payable hereunder the full amount of such
liabilities and obligations, as well as any income tax which the Company is
obligated (in the opinion of counsel chosen by the remaining Managing Members)
to deduct and withhold as a result of the subject purchase and sale. At the
closing, the withdrawing Member shall transfer, convey and deliver all right,
title and interest in and to such Membership Units being transferred by such
party, which shall constitute (and, at the closing, the withdrawing

                                       34
<PAGE>

Member shall certify the same in writing) good and unencumbered title to such
Membership Units, free and clear of all Liens. In addition, the withdrawing
Member shall deliver to the Company at such closing any opinions of counsel
(relating to transferability) and certificates that the Company may reasonably
request.

            (e) In each case where the Company is required to purchase a
Membership Units pursuant to this Section 10.06, each Member (including the
withdrawing Member) shall, at the request of the Company, take such action as is
necessary and lawful to permit the Company's purchase, including, but not
limited to, the incurrence of indebtedness and, if applicable, the creation of
legally available surplus (whether by reduction of capital, revaluation of
assets or otherwise).

            SECTION 10.07 Further Assurances. The Members shall cooperate and
use all reasonable efforts to take all actions necessary to complete a Transfer
in accordance with this Article X, including the making of filings, and
provision of information, necessary to comply with Sections 10.05(e).

                                   ARTICLE XI
                    DISSOLUTION, LIQUIDATION AND TERMINATION

            SECTION 11.01 No Dissolution. The Company shall not be dissolved by
the admission of additional Members in accordance with the terms of this
Agreement.

            SECTION 11.02 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:

            (a) the expiration of the term of the Company as provided in Section
2.03;

            (b) at any time after the expiration of twenty-four (24) months
after the effective date of this Agreement, the Majority Vote of the Members
Committee to dissolve, wind up and liquidate the Company;

            (c) the sale of all or substantially all the assets of the Company;

            (d) the Bankruptcy, insolvency, expulsion from the Company or
withdrawal pursuant to Section 10.06 of a Managing Member, unless within 90 days
after the occurrence of such an event, Members holding a majority of the
remaining Membership Units agree in writing to continue the Company Business and
to the appointment, if necessary or desired, effective as of the date of such
event, of one or more additional Members; or

            (e) the entry of a decree of judicial dissolution under Section
18-802 of the Delaware Act.

                                       35
<PAGE>

            If the Company is continued pursuant to clause (d) above after the
Bankruptcy, insolvency, expulsion or withdrawal of a Managing Member (the
"Former Member"), the other Managing Members and the Company shall have the
right to purchase the Membership Interest of such Former Member at the Fair
Market Value of such Membership Units in accordance with the procedures set
forth below. The cost of determining the Fair Market Value shall be borne 50% by
the Company and 50% by the Former Member.

            The "Fair Market Value" of the Company shall be determined by a
nationally recognized investment banking firm, accounting firm or valuation firm
selected by the other Managing Members from a list of three such firms provided
by a representative of the Former Member (the "Appraiser"). The Appraiser's
determination of the Fair Market Value shall be considered in the context of a
hypothetical purchase of the Company negotiated between a willing buyer and a
willing seller, neither of whom is under compulsion to act, without any control
premium or any discount for a minority interest, transfer restrictions,
illegality or other similar factors. The Appraiser shall also assume that the
Company will continue to have obligations to third parties but that the proceeds
of the sale shall be used to make payments representing a return of Capital
Contributions and the repayment of any Member loans by the Former Member
(including any interest thereon). In evaluating the Company, the Appraiser shall
give due consideration to the prospects and potential of the Company. Within 30
days of the date of selection, the Appraiser will determine the Fair Market
Value and allocate such value between the Membership Interests of the Former
Member and the other Members and within 30 days of the delivery of such
determination and allocation by the Appraiser, the other Managing Members shall
notify the representative of the Former Member whether such other Managing
Members will exercise their right to acquire the Membership Units of the Former
Member. Any acquisition pursuant to this Section 11.02 shall be completed within
90 days of the date of the selection of the Appraiser.

            SECTION 11.03 Notice of Dissolution. Upon the dissolution of the
Company, the Person or Persons approved by the Members holding a majority of the
remaining Membership Units to carry out the winding up of the Company (the
"Liquidating Trustee") shall promptly notify the Members of such dissolution,
except that in the case of a dissolution pursuant to Section 11.02(d) the
Liquidating Trustee shall be the Managing Member (or Members) that is not a
Former Member.

            SECTION 11.04 Liquidation.

            (a) Upon dissolution of the Company, the Liquidating Trustee shall
immediately commence to wind up the Company's affairs; provided, that a
reasonable time shall be allowed for the orderly liquidation of the assets of
the Company and the satisfaction of liabilities to creditors so as to enable the
Members to minimize the normal losses attendant upon a liquidation. The Members
shall continue to share Net Profits and Net Losses and items of Company gross
income, gain, deduction and loss during liquidation in the same proportions, as
specified in Article VII hereof, as before liquidation. Each Member shall be
furnished with a statement audited by the Auditors that shall set forth the
assets and liabilities of the Company as of the date of dissolution. Each Member
(and its Affiliates) shall pay to the Company all amounts

                                       36
<PAGE>

then owing by it (and them) to the Company. The Liquidating Trustee shall take
the following action and make the following distributions out of the assets of
the Company, in the following manner and order of priority:

                  (i) first, pay or establish adequate reserves for all debts
and liabilities of the Company to persons other than Members and expenses of
liquidation in the order of priority provided by law;

                  (ii) then, establish any reserves which are reasonably deemed
necessary to provide for contingent liabilities or obligations of the Company;
provided, however, that, at the expiration of such period of time as the
Liquidating Trustee may reasonably deem advisable, the balance of any reserves
shall be paid or distributed as provided in clauses (iii) through (v) of this
Section 11.04 (in the order of priority thereof), it being agreed that such
reserves may, at the election of the Liquidating Trustee, be paid over to an
independent escrow agent to be held by it in escrow for the purpose of
disbursing such reserves in payment of any of the aforesaid contingencies;

                  (iii) then, pay out of the balance of such assets, if any, the
outstanding balance of all remaining debts and liabilities of the Company to the
Members including any Member who has withdrawn pursuant to Section 10.06 to whom
the same are owed, pro rata, including satisfaction of the liabilities of the
Company and borrowings by SEIS, Modis, and/or Cayenta to fund Member loans or
credit supports or otherwise provide liquidity to or for the benefit of the
Company, including the extension of credit as an unmargined line (whether by
payment or the making of reasonable provision for payment thereof), other than
liabilities for distributions on Membership Units;

                  (iv) then, after giving effect to all allocations provided in
Article VII hereof, including those required under clause (ii) of the definition
of "Asset Value" on Schedule 1.01, pay the Members who have Unrecovered Capital,
pro rata, to the extent of their respective amounts of Unrecovered Capital but
not in excess of their respective Capital Accounts, the balance, if any, of such
assets; and

                  (v) then pay the balance, if any, of such assets to the
Members in the following order and priority:

                        (A) to the Members, pro rata, in accordance with their
positive Capital Account balances;

                        (B) to the Members, pro rata, in accordance with the
number of Membership Units owned by each such Member.

            To the extent that the Members determine that any or all of the
assets of the Company shall be sold, such assets shall be sold as promptly as
practicable, in a commercially reasonable manner. For purposes of making the
liquidating distributions required by this Section 11.04(a), the Liquidating
Trustee may determine, at the direction of the Members by Majority

                                       37
<PAGE>

Vote, whether to distribute all or any portion of the assets of the Company in
kind or to sell all or any portion of the assets of the Company and distribute
the proceeds therefrom. Each Member shall receive copies of all customer
information relating to customers of the Company. Subject to paragraph (c)
below, Customer Contracts will be divided among the Members such that each
Member receives its pro rata share (in accordance with the number of Membership
Units) of the aggregate value of Customer Contracts, unless all of the Members
otherwise agree in writing to distribute Customer Contracts to certain but not
all Members. The Capital Account of each Member shall be adjusted to take into
account the Net Profit and Net Losses resulting from the sale of the Company's
assets and all other transactions in connection with the winding up of the
Company.

            Notwithstanding anything herein to the contrary, all Joint Work
Product (as such term is defined in the License Agreement) except all Company
Marks and Hybrid Marks (as those terms are defined in the License Agreement)
shall be distributed to the Members and such Joint Work Product shall thereafter
be jointly owned by the Members and each Member shall have the unrestricted
right to use, license, distribute, sell or otherwise fully exploit such rights
without accounting to the other Members, subject to any rights of third parties
with regard to such Joint Work Product. In the event that any Joint Work Product
is embodied in or is used in connection with a Member's Separate Work Product
(as such term is defined in the License Agreement), such Member shall grant to
each other Member a limited non-exclusive, royalty-bearing license, on
commercially reasonable terms, to use the Separate Work Product solely in
connection with obligations and services being provided pursuant to contracts
and agreements in effect on the date liquidation of the Company begins, and not
for general use of the Joint Work Product in the Member's business. The
Liquidating Trustee shall promptly cause copies of any physical embodiments of
all Joint Work Product (including source code) other than Company Marks and
Hybrid Marks to be delivered to each Member. All Company Marks and all Hybrid
Marks shall be deemed to be abandoned. The Members shall have no rights in the
Company Marks, Hybrid Marks or any component parts of any Hybrid Marks, or any
goodwill associated with any of the foregoing except that (x) the Members shall
be permitted to use such Company Marks and Hybrid Marks solely in connection
with obligations and services being provided pursuant to contracts and
agreements in effect on the date liquidation of the Company begins, and not for
general use in the Member's business and (y) SEIS shall own and have the sole
right to use the name "Soliance" and all variations thereof and derivations
therefrom. All rights in said component parts, and the goodwill associated
therewith, shall revert to the Member owning such component parts.

            (b) Notwithstanding any provision to the contrary in this Section
11.04, upon dissolution of the Company as a result of Section 11.02(a) or (b),
the Liquidating Trustee shall, to the extent practicable and consistent with
Sections 11.04(a)(iv) and 11.04(a)(v), distribute in kind to each Member the
respective assets contributed or transferred by such Member to the Company. The
value of each such asset at dissolution shall be determined using the same
methodology that was used to determine the value of the assets to be contributed
to the Company.

                                       38
<PAGE>

            (c) To the extent that, pursuant to the provisions of paragraphs (a)
and (b) above, a Member does not, as provided in Section 11.04(a)(v), receive
property or assets equal to the value of such Member's Capital Account plus a
proportionate share of the remainder of property and assets available for
distribution after all Members' Capital Accounts have been eliminated pursuant
to the liquidation, an attempt will be made to re-allocate the Customer
Contracts such that each Member receives property and assets equal to the value
of such Member's aggregate Capital Account plus a proportionate share of the
remainder of property and assets available for distribution after all Members'
Capital Accounts have been eliminated pursuant to the liquidation. In the event
that the re-allocation of the Customer Contracts fails to provide each Member
with the full value of such Member's Capital Account plus a proportionate share
of the remainder of property and assets available for distribution after all
Members' Capital Accounts have been eliminated pursuant to the liquidation, each
Member which has received more than the full value of its Capital Account plus a
proportionate share of the remainder of property and assets available for
distribution after all Members' Capital Accounts have been eliminated pursuant
to the liquidation, shall pay to the other Member(s), within five Business Days
of the notice described in paragraph (d) below becoming final, a cash amount in
immediately available funds, equal to the difference in the amount such Member
was entitled to receive pursuant to Section 11.04(a)(v) and the amount such
Member actually received. Notwithstanding any other provisions of this
paragraph, in the event that should there be an insufficient amount of assets to
return to each Member the full value of its Capital Account, the Liquidating
Trustee will, in its discretion, divide the assets such that each Member
receives as near as possible the proportionate amount it was entitled to receive
pursuant to Section 11.04(a)(v).

            (d) As soon as practicable, the Liquidating Trustee shall deliver a
notice to each Member setting forth the value assigned to each asset and the
Member to which such asset will be distributed, in connection with the
provisions of paragraphs (a), (b) and (c) above. Each Member shall have 15 days
to dispute such valuation and if no notice of dispute is delivered to the
Liquidating Trustee and the other Members, the notice of valuation shall become
final. If such notice of dispute is delivered, the matter shall be submitted to
a nationally recognized investment banking firm, accounting firm or valuation
firm selected by the Liquidating Trustee from a list of three such firms
provided by the disputing Member. The banking, accounting or valuation firm
shall make a decision within 60 days of referral, which decision shall be final
and binding, and the fees and expenses of such firm shall be borne by the
Company.

            SECTION 11.05 Termination. The Company shall terminate when all of
the assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
holders of Membership Units in the manner provided for in this Article XI, and
the Certificate shall have been canceled in the manner required by the Delaware
Act.

            SECTION 11.06 Claims of the Members. The Members shall look solely
to the Company's assets for the return of their Capital Contributions, and if
the assets of the Company remaining after payment of or due provision for all
debts, liabilities and obligations of the Company (including any credit support
or other liquidity provided by SEIS or Member loans

                                       39
<PAGE>

made by SEIS and Cayenta and borrowings thereof to fund Member loans, credit
support or otherwise provide liquidity to or for the benefit of the Company) are
insufficient to return such Capital Contributions, the Members shall have no
recourse against the Company or any other Member or any other Person. No Member
with a negative balance in such Member's Capital Account shall have any
obligation to the Company or to the other Members or to any creditor or other
Person to restore such negative balance upon dissolution or termination of the
Company or otherwise.

                                   ARTICLE XII
                                    EMPLOYEES

            SECTION 12.01 Employees.

            (a) Commencing on the date hereof, each Member hereby agrees to make
certain Persons available to perform services and work for the Company as and
when requested by the Members Committee and approved by such Member. The
relevant Member shall bill the Company at their employees' normal billing rates.
Market-based consultant billing rates will be established for any salaried
employee providing services to the Company. Members are encouraged to enter into
fixed price, fixed time line contracts when appropriate, the details of which
are more fully discussed in the Services Agreements. Should the Company not pay
said sum, or any part thereof, within 30 calendar days from the date of the
monthly invoice (i) interest at the Interest Rate shall be additionally due and
owing on the unpaid balance, from the date past due and (ii) the Member to which
such sum is owed shall, effective 30 days following the delivery of written
notice to the Company, have no further obligation pursuant to this Section 12.01
to make available to the Company any Persons until such unpaid balance plus all
accrued interest shall have been paid; provided, that no Member shall be
relieved of any of its obligations pursuant to this Section 12.01 to make
available any Persons if, following the delivery of written notice pursuant to
this clause (ii) but prior to 30 days following such delivery, the Company shall
deliver to the relevant Member written notice setting forth in reasonable detail
why the Company in good faith believes no unpaid amount is owed pursuant to this
Section 12.01. The Company shall notify the relevant Member of any billing items
in question. Such Member will research the items in question and resolve any
differences with the Company. In the event any amount that was paid by the
Company was not properly owed, then within 30 days after the delivery of such
notice, the Company shall be reimbursed that amount with interest at the
Interest Rate from the date the original payment was received until the
adjustment was refunded. Upon the termination of this Agreement, each Member
will bill the Company for the actual costs incurred since the last billing under
the normal terms and conditions mentioned above. Each Member shall have the same
audit rights in respect of compensation due pursuant to this Section 12.01 as
they have pursuant to Section 4.02(e).

            (b) In the event the Members Committee hires employees to work
directly for the Company, or determines to have certain employees of a Member
become employees of the Company rather than provide services on a dedicated
basis, it shall determine whether to establish welfare and benefit plans for the
Company and provide payroll services directly or

                                       40
<PAGE>

contract with one or more of the Members to provide such benefits and services.
In the event the Members Committee elects to contract with a Member for such
benefits and services, such contract shall be on the terms set forth in
paragraph (a) above, except as otherwise provided in any Management Services
Agreement between the Company and such Member.

            (c) Each Member (and former Member) agrees that from and after the
date hereof, for the duration of the Company and for a period of two (2) years
after the dissolution of the Company or after the date the Member transferred
its Membership Units, it shall not solicit the employment of any employee of any
of the other Members unless such Member consents thereto in advance, provided
that a general advertisement in the public media shall not constitute a
violation of this section.

                                  ARTICLE XIII
                                    PRODUCTS

            SECTION 13.01 Company Products. The Company provides information
products and services to the energy provider market (collectively referred to
herein as, the "Products"). For purposes of this Agreement, "Products" is
defined as the provision of Application Service Provider (ASP) and Web-hosting
services for the utility industry (any company engaged in the generation,
distribution, transmission and retail sale of electrical energy, gas and water
to retail sellers or transporters of energy commodity including municipalities,
utilities and other energy service providers (ESPs). Each Managing Member will
contribute its unique expertise to provide a complete solution for the customer.
SEIS will provide the industry knowledge and expertise, Cayenta will provide
application and technology interoperability expertise, and Modis will provide
application configuration expertise. In addition, SEIS will provide service
bureau operational support, application licenses, and the operations
infrastructure; this can include related sale, lease and rental of software,
hardware, and telecommunication services. When needed, all Managing Members will
provide expert information technology consulting services in support of
delivering a total solution to the customer.

                                       41
<PAGE>

                                   ARTICLE XIV
                               CERTAIN AGREEMENTS

            SECTION 14.01 Scope of Business

            (a) The Products will be marketed by and offered by the Members
through the Company. Members will provide Company all leads on new marketing and
sales opportunities for Products. If the Company elects, in writing, not to
proceed with the lead, the individual Member who initiates the lead may go
forward to unilaterally develop such lead. Any Member may deliver written notice
to the Company requesting whether a Product not then offered by the Company will
be offered by the Company and the Company shall have 90 days to respond to such
Member. In the event that within such 90-day time period the Members Committee
is unable to determine that such Product will be offered by the Company then the
Members hereby agree that such Product may be offered on a non-exclusive basis
by the notifying Member, or any other Member, or any of their Affiliates as well
as by the Company.

                  The Members agree that this Agreement will not prevent any
Member from marketing any products or services that do not constitute Products
at any time, or from marketing Products after the last day of the fifteenth (15)
calendar month commencing with the first month after the month in which such
Member has transferred its entire Membership Interest (other than to an
Affiliate) and ceased to be a Member of the Company or withdrawn from the
Company.

Subject to the foregoing, the Members agree that they will not enter into any
other new agreement to provide any of the Products with any other party.

            (b) No Subsidiary or Affiliate of a Member shall have any obligation
to refrain from (i) engaging in the same or similar activities or lines of
business as the Company or developing or marketing any products or services that
compete, directly or indirectly, with those of the Company or (ii) investing or
owning any interest publicly or privately in, or developing a business
relationship with, any Person engaged in the same or similar activities or lines
of business as, or otherwise in competition with, the Company; and neither the
Company nor any Member (or any Subsidiary or Affiliate of such Member) shall
have any right by virtue of this Agreement in or to, or to be offered any
opportunity to participate or invest in, any venture engaged or to be engaged in
by any other Member (or any Subsidiary or Affiliate of such Member) or any right
of this Agreement in or to any income or profits derived therefrom.

            SECTION 14.02 Compliance with U.S. Foreign Corrupt Practices Act.

            (a) Each Member shall take all appropriate action to cause the
Company to adopt such internal policies as are necessary to assure that the
business of the Company and the conduct of its officers, employees and agents
are consistent with the following operating principles: No money or other thing
of value shall be offered, promised or given directly or indirectly to (i) any
governmental official, (ii) any political party or official thereof, (iii) any
candidate for political office, or (iv) any other person, while knowing or
having reason to know that all or a portion of such money or thing of value will
be offered, promised or given, directly

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<PAGE>

or indirectly, to any of those listed in items (i) through (iv) above for the
purpose of influencing any action, omission or decision by the recipient in
order to either obtain or retain business for the Company or to direct business
to another.

            (b) Upon receiving information which provides reasonable certainty
that any such payment has been made, or action has been taken, each Member shall
(i) advise all other Members of the occurrence, and (ii) take all actions
reasonably necessary to mitigate, correct and report such occurrence, under law
or otherwise (such steps may include termination or severance of the
individual(s) involved).

            All Members acknowledge they have a good working knowledge of the
requirements of the Foreign Corrupt Practices Act. The Members also agree to
adhere to the foregoing operating principle with respect to their own actions on
behalf or in the name of the Company.

            SECTION 14.03 Regulatory Approvals. Each Member shall cooperate and
use its best efforts to promptly prepare and file all necessary documentation,
to effect all necessary applications, notices, petitions, filings and other
documents, and to use all commercially reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all governmental or
regulatory authorities necessary or advisable to (i) consummate the transactions
contemplated by this Agreement and (ii) allow the Company to engage in the
Company Business. Each Member shall have the right to review and approve in
advance all characterizations of the information relating to such Member which
appear in any filing made in connection with the transactions contemplated by
this Agreement. The Members agree that they will consult with each other with
respect to the obtaining of all such necessary permits, consents, approvals and
authorizations of governmental and regulatory authorities. The Members shall
jointly assist the Company in its efforts to obtain necessary approvals from any
governmental or regulatory authority.

            SECTION 14.04 Confidentiality. Each Member and each of its
Affiliates shall keep confidential and not reveal, and shall cause its
Affiliates and Subsidiaries and the officers, directors, employees, agents and
representatives of such Member and its Affiliates and Subsidiaries, to keep
confidential and not to reveal, to any other Person (other than on a "need to
know" basis, to the Company or its officers and employees, to any Affiliate or
any officer, director, employee, agent or representative of such Member or its
Affiliates (each of whom shall be subject to confidentiality obligations), or to
any other Member or such Member's Affiliates), any documents and other
information concerning, relating to or in connection with the Company or another
Member or the business of the Company or such other Member, that come to the
knowledge of such Member or its Affiliates or their respective representatives
or agents by reason of the relationship of such Member or Affiliate with the
Company or such other Member, including but not limited to other leads brought
to the Company for consideration by a Member. Information does not include
knowledge that (a) is generally available to the public (other than as a result
of a disclosure by such Member or its Affiliates), (b) is available to such
Person on a non-confidential basis from a source that is not prohibited from
disclosing such information to such Person, (c) is independently developed by
such Person without assistance by the disclosure

                                       43
<PAGE>

of such information, or (d) such Person can demonstrate was known to it prior to
the disclosure thereof by the Company ("Information"). In the event that any
Member or any such agent, representative, Affiliate, employee, officer or
director becomes legally compelled to disclose any such Information, such party
shall provide the Managing Members with prompt written notice of such
requirement so that such Managing Members or the Company may seek a protective
order or other remedy or waive compliance with this Section 14.04; provided,
that in the event that such protective order or other remedy is not obtained, or
the Managing Members waive compliance with this Section 14.04, the disclosing
party shall furnish only that portion of such Information which is legally
required to be provided and shall exercise all reasonable efforts to obtain
assurances that confidential treatment will be accorded such information. The
Members further agree not to use any Information for any purpose other than in
connection with activities of the Company and shall cause each of their
respective employees who have access to Information to sign a confidentiality
agreement. The provisions of this Section 14.04 shall survive the termination or
dissolution of the Company with respect to any such documents and other
information concerning another Member or the business of such other Member, and
shall survive the Transfer of any Membership Units or the withdrawal of any
Member with respect to any such documents and other information concerning the
Company or another Member or the business of the Company or such other Member.

                                   ARTICLE XV
                          LIABILITY AND INDEMNIFICATION

            SECTION 15.01 Liability.

            (a) Except as otherwise provided by the Delaware Act or this
Agreement, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Covered Person.

            (b) Except as otherwise expressly required by law, a Member, in its
capacity as such, shall have no liability in respect of any distributions
wrongfully distributed to it unless such Member had actual knowledge at the time
of the distribution of facts indicating the impropriety of the distribution and
if immediately after giving effect to such distribution all liabilities of the
Company (other than liabilities to Members or assignees on account of their
Membership Units and liabilities as to which recourse is limited to specific
property of the Company) exceed the fair market value of the Company's assets;
provided, that a Member shall have no liability under this Section 15.01 in
respect of any distribution on or after the third anniversary of the
distribution unless an action to recover such distribution from such Member is
commenced prior to such third anniversary and an adjudication of liability
against such Member is made in such action.

            (c) No Managing Member, nor any Affiliate of any Managing Member,
shall have any personal liability to the Company or any of the Members (i) for
damages for any breach

                                       44
<PAGE>

of duty as a manager of the Company or as a Managing Member or as an authorized
agent, as the case may be, when acting with the requisite consent or
authorization of the Managing Members (which may include such Member) or (ii)
for any act or omission performed or omitted by it pursuant to authority granted
by this Agreement, provided that the foregoing provision shall not eliminate or
limit the liability of any Managing Member if a judgment or other financial
adjudication adverse thereto establishes that acts or omissions thereto involved
intentional misconduct or a knowing violation of law. Each Member, acting in any
capacity hereunder, having the opportunity to grant or withhold its consent or
authorization shall be entitled to grant or withhold its consent or
authorization to any act hereunder in its sole and absolute discretion, and is
entitled to act in its own self-interest in all matters affecting the management
or affairs of the Company. Without limiting the foregoing, no Managing Member
nor any Affiliate of a Managing Member shall have personal liability to the
Company or any of the Members in connection with any decisions, whether for good
reason or no reason, that the Company requires or does not require additional
capital or credit support or as to the manner of providing any such additional
funding, and no consent or authorization as to a level of funding has been
expressed nor should be implied.

            (d) No Member or Managing Member shall be personally liable for the
return or payment of all or any portion of the capital of or profits allocable
to or loans to the Company by any Member (or any successor, assignee or
transferee thereof), it being expressly agreed that any such return of capital
or payment of profits made pursuant to this Agreement, or any payment or
repayment in respect of any such loan, shall be made solely from the assets of
the Company (which shall not include any right of contribution from any Member
or Managing Member).

            SECTION 15.02 Indemnification.

            (a) To the fullest extent permitted by applicable law, a Covered
Person shall be entitled to indemnification from the Company for any loss,
damage or claim incurred by such Covered Person by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on such Covered Person by this Agreement, except that no Covered
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Covered Person by reason of gross negligence, bad faith
or willful misconduct with respect to such acts or omissions; provided, that any
indemnity under this Section 15.02 shall be provided out of and to the extent of
Company assets only, and no other Covered Person shall have any personal
liability on account thereof.

            (b) (i) In the event that any claim, demand, action, suit or
proceeding shall be instituted or asserted or any loss, damage or claim shall
arise in respect of which indemnity may be sought by a Covered Person pursuant
to Section 15.02(a), such Covered Person shall promptly notify the Company
thereof in writing. Failure to provide notice shall not affect the Company's
obligations hereunder except to the extent the Company is actually and
materially prejudiced thereby.

                                       45
<PAGE>

                  (ii) The Company shall have the right, exercisable subject to
the approval of the disinterested Members, to participate in and control the
defense of any such claim, demand, action, suit or proceeding and, in connection
therewith, to retain counsel reasonably satisfactory to each Covered Person, at
the Company's expense, to represent each Covered Person and any others the
Company may designate in such claim, demand, action, suit or proceeding. The
Company shall keep the Covered Person advised of the status of such claim,
demand, action, suit or proceeding and the defense thereof and shall consider in
good faith recommendations made by the Covered Person with respect thereto.

                  (iii) In any such claim, demand, action, suit or proceeding,
any Covered Person shall have the right to retain its own counsel at its own
expense; provided, that the fees and expenses of such Covered Person's counsel
shall be at the expense of the Company if (A) each other Member and such Covered
Person shall have mutually agreed to the retention of such counsel, (B) the
Company shall have failed, within a reasonable time after having been notified
of the existence of an indemnified claim, to assume the defense of such
indemnified claim or (C) the named parties to any such claim, demand, action,
suit or proceeding (including any impleaded parties) include both the Company
and such Covered Person and representation of both parties by the same counsel
would be inappropriate in the judgment of the Covered Person (as evidenced by an
opinion of counsel) due to actual or potential differing interests between them
and the Company shall have failed, within a reasonable time after having been
notified of the Covered Person's objection under this Section 15.02(b)(iii)(C)
to such joint representation, to retain counsel for such Covered Person
reasonably satisfactory to such Covered Person. It is understood that the
Company shall not, in respect of the legal expenses of any Covered Person, in
connection with any claim, demand, action, suit or proceeding or related claims,
demands, actions, suits or proceedings in the same jurisdiction, be liable for
the fees and expense of more than one separate firm (in addition to any local
counsel) for all such Covered Persons and that all such fees and expenses shall
be reimbursed as they are incurred; provided, that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the judgment of a Covered Person (as evidenced by an opinion of
counsel) for the same counsel to represent such Covered Person and any other
Covered Person, then such Covered Person shall be entitled to retain its own
counsel, in each jurisdiction for which the Covered Person reasonably determines
counsel is required, at the expense of the Company.

                  (iv) The Company shall not be liable for any settlement of any
claim, demand, action, suit or proceeding effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled
with such consent or if there be a final judgment for the plaintiff, the Company
agrees to indemnify each Covered Person, to the extent provided in Section
15.02(a), from and against all losses, damages or claims by reason of such
settlement or judgment. The Company shall not effect any settlement of any
pending or threatened claim, demand, action, suit or proceeding in respect of
which any Covered Person is seeking indemnification hereunder without the prior
written consent of each such Covered Person (which consent shall not be
unreasonably withheld or delayed by any such Covered Person), unless such
settlement includes an unconditional release of each such Covered Person from
all liability and claims that are subject matter of such claim, demand, action,
suit or proceeding.

                                       46
<PAGE>

                  (v) As necessary or useful to the defending party in effecting
the foregoing procedures, the parties shall cooperate in the execution and
delivery of agreements, instruments and other documents and in the provision of
access to witnesses, documents and property (including access to perform
interviews, physical investigations or other activities).

            SECTION 15.03 Expenses. To the fullest extent permitted by
applicable law, expenses (including legal fees) actually and reasonably incurred
by a Covered Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Company of an undertaking by or on behalf of the Covered Person to repay
such amount if it shall be determined that the Covered Person is not entitled to
be indemnified therefor as authorized in Section 15.02 hereof.

                                   ARTICLE XVI
                            CONVERSION TO CORPORATION

            SECTION 16.01 Conversion to Corporation.

            (a) At such time and in such manner as the Members shall determine
to be appropriate, the Members Committee by Unanimous Vote shall be entitled to
cause the Company to be converted into and reconstituted as a corporation under
the laws of the State of Delaware (the "Corporation"), whether by conversion
pursuant to Delaware Act ss.18-214, merger, transfer and/or contribution of
assets and liabilities of the Company to the Corporation in exchange for shares
of capital stock of the Corporation (and distribution of such shares to the
Members in liquidation of the Company) or otherwise (a "Conversion", and the
actual date of such Conversion being referred to herein as the "Conversion
Date").

            As of the Conversion Date, each Member shall, to the extent
hereinafter provided, be entitled to receive:

                  (i) a capital share ownership interest in the Corporation
substantially equivalent, as reasonably determined by the Managing Members, to
the Units comprising its Membership Interest as of the Conversion Date; and

                  (ii) each Member shall also be issued in respect of the sum of
such Member's Unrecovered Capital preferred stock of the Corporation with an
aggregate redemption price and liquidation preference equal in the aggregate to
such Unrecovered Capital, and otherwise with such rights, preferences and
privileges as in the reasonable judgment of the Managing Member(s) shall be
equitable in light of the rights, preferences and privileges to which Members
are entitled under this Agreement in respect of their respective Unrecovered
Capital.

            (b) Each of the Members hereby agrees to cooperate fully with such
Conversion and enter into one or more stockholders' agreements which shall
reflect each of their

                                       47
<PAGE>

respective rights and obligations as stockholders of the Corporation, which
rights and obligations shall be substantially equivalent to the respective
rights and obligations of the Members under this Agreement, and with such
changes taking account of the differences between the Company and the
Corporation and the laws governing the same, as the Managing Member(s) shall
reasonably determine.

                                  ARTICLE XVII
                                  MISCELLANEOUS

            SECTION 17.01 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopier or by registered or certified mail (postage prepaid, return receipt
requested), as follows:

                        (i) if given to the Company, in care of the Secretary at
101 Ash Street, San Diego, California 92101, or such other address as the
Company may hereafter designate in writing; or

                        (ii) if given to any Member at the address set forth
opposite its name on Schedule 2.01 attached hereto, or at such other address as
such Member may hereafter designate by written notice to the Company.

            SECTION 17.02 Public Announcements. The Members (and their
Affiliates) agree to consult with each other before issuing any press release or
making any public statement with respect to this Agreement and will not issue
any such press release or make any such public statement prior to such
consultation, and, except as may be required by applicable law, will not issue
any such press release or make any such public statement without the prior
consent of the other party.

            SECTION 17.03 Cumulative Remedies. The rights and remedies provided
by this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.

            SECTION 17.04 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of all of the parties and, to the extent permitted by
this Agreement, their successors, executors, administrators, heirs, legal
representatives and assigns.

            SECTION 17.05 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. Unless otherwise specified, all
references herein to "Articles", "Sections" and paragraphs shall refer to
corresponding provisions of this Agreement.

                                       48
<PAGE>

            SECTION 17.06 Severability. If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby by consummated as
originally contemplated to the fullest extent possible.

            SECTION 17.07 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in two or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

            SECTION 17.08 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining hereto.

            SECTION 17.09 Governing Law; Dispute Resolution

            (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.

            (b) Dispute Resolution.

                  (i) The Members shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation
between their respective executives who have authority to settle the
controversy. Any Member may give the other Members written notice of any dispute
not resolved in the normal course of business. Within five (5) Business Days
after the date that the notice is deemed to have been delivered, executives of
the disputing Members shall agree upon a mutually acceptable time and place to
meet and shall meet at that time and place, and thereafter as often as they
reasonably deem necessary, to exchange relevant information and to attempt to
resolve the dispute. The first of those meetings shall take place within ninety
(90) days after the date that the notice referred to above has been deemed to be
delivered. If a disputing Member intends to be accompanied at a negotiation
meeting by an attorney, that disputing Member shall give the other Members at
least three (3) business days notice of that intention, and the other Members
also may be accompanied by an attorney. If the matter has not been resolved
within ninety (90) calendar days of the disputing Member's notice or if, within
five (5) business days of delivery of that notice, the Members fail to agree on
a time and place for an initial meeting, any Member may initiate arbitration of
the dispute, controversy or claim as provided in Section 17.09. In addition, if
one Member has requested another Member to participate in a non-binding
procedure and the other Member has failed to participate, the requesting Member
may initiate arbitration pursuant to Section 17.09

                                       49
<PAGE>

prior to the expiration of the ninety (90) days. The ninety (90) day periods in
this Section 17.09 are referred to in this Article 17 as the "Notice Periods."

                  (ii) Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement, including the breach, termination or
validity hereof, which cannot be resolved by negotiation as provided in Section
17.09, shall be finally settled under the Rules of Conciliation and Arbitration
of the American Arbitration Association (the "Rules") by an arbitral tribunal
(the "Tribunal") comprising one arbitrator appointed by the disputing Member(s),
one arbitrator appointed by the non-disputing Member(s) and a third arbitrator
appointed by the two arbitrators appointed by the Members. The third arbitrator
shall act as the presiding arbitrator (the "Chairman"). A decision of the
majority of the arbitrators shall be binding.

                  (iii) The arbitration shall be held in San Diego, California.

                  (iv) Any arbitration proceeding hereunder must be instituted
within two (2) years after the dispute, controversy or claim arises. Failure to
institute an arbitration proceeding within the two-year period shall constitute
an absolute bar to the institution of any proceedings respecting the dispute,
controversy or claim and a waiver thereof. The arbitration proceeding shall be
conducted and concluded as soon as reasonably practicable, based on the schedule
established by the Tribunal, but in any event the Tribunal shall render its
decision within one hundred twenty (120) calendar days following the selection
of the Chairman. The Members desire that any dispute, controversy or claim be
resolved quickly and at the lowest possible cost, and the Tribunal shall act in
a manner consistent with these intentions, including limiting discovery to only
that which is absolutely necessary to enable the Tribunal to render a fair
decision that reflects the Members' intent as set forth in this Agreement.

                  (v) The Tribunal shall interpret this Agreement in accordance
with the laws stipulated in Section 17.09 and the rules of construction
stipulated in this Agreement. The procedural law of the forum shall be applied
with respect to matters not covered by the Rules. All statutes of limitation
that otherwise would be applicable shall apply to the arbitration proceeding
provided that such statutes of limitation shall be tolled to the extent
necessary to allow the Members and the Tribunal the full benefit of the Notice
Periods. Any attorney-client privilege and other protection against disclosure
of privileged or confidential information, including any protection afforded the
work product of any attorney, that otherwise could be claimed by any Member
shall be available to and may be claimed by that Member in any arbitration
proceeding. No Member waives any attorney-client privilege or any other
protection against disclosure of privileged or confidential information by
reason of anything contained in, or done pursuant to, the arbitration provisions
of this Agreement.

                  (vi) The decision of the Tribunal pursuant to this Article 17
shall be final and binding on the parties of this Agreement. The Members agree
to submit to the jurisdiction of any court having jurisdiction over the Member
or the property of the Member against whom enforcement is sought for purposes of
the enforcement of any award, order or judgment.

                                       50
<PAGE>

                  (vii) Any award of damages pursuant to the arbitration shall
be included in a written decision signed by the arbitrator (or a majority of the
arbitrators) which shall state the reasons upon which the award was based,
including all the elements involved in the calculation of any award of damages.
The award of damages shall not include punitive, special, exemplary or
consequential damages, including loss of profits or lost business opportunity,
or any damages other than or in addition to actual damages, but may include
interest from the date of the award. Any monetary award shall be in the United
States dollars, free of any tax or other deduction, and shall include interest
from the date of claim for any breach or other violation of this Agreement to
the date paid in full at a floating rate of interest equal to the prime rate of
interest in effect from time to time at Citibank, N.A., New York, New York.

                  (viii) Notwithstanding any provision of this Agreement, either
Member shall have the right, at any time after commencement of any arbitration
proceeding hereunder and prior to the rendering of any award, order or judgment
thereunder, to apply to the Tribunal or to any court of competent jurisdiction
for injunctive or preliminary relief. No application for injunctive or
preliminary relief shall be construed to infringe this arbitration agreement or
affect the powers of the Tribunal.

                  (ix) The Members agree that during the pendency of any
mediation and/or arbitration, the Company shall continue its operations and each
of the Members will continue to provide its services under the existing
Management Services Agreement as if there were no dispute.

            (c) The parties hereto agree that irreparable damage would occur in
the event any provision of this Agreement was not performed in accordance with
the terms hereof and that the parties hereto shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or in
equity.

            SECTION 17.10 Expenses. Each of the Members will bear its own costs
and expenses, including brokers' or finders' fees, if any, incurred in
connection with the preparation and execution of this Agreement.

            SECTION 17.11 Further Assurances. The Members will execute and
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.

            SECTION 17.12 Amendments and Waivers; Assignment.

            (a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by all parties hereto, or in the case of a waiver, by the party or
parties against whom the waiver is to be effective; provided, that Schedule 2.01
to this Agreement shall be deemed amended from time to time to reflect the
admission of a new Member, the withdrawal or resignation of a Member and the
adjustment of the Membership Units resulting from any sale, Transfer or other
disposition of a Membership Unit, in each case that is made in accordance with
the provisions thereof; and

                                       51
<PAGE>

provided, further, that the Members Committee may, by Majority Vote, amend this
Agreement without the consent of any other Member (i) to reflect changes validly
made in the membership of the Company and corresponding changes in the terms and
provisions of this Agreement necessary to reflect or conform with any such
change in membership, (ii) to reflect changes permitted in accordance with this
Agreement in the Capital Accounts and/or Membership Units of the Members, (iii)
to clarify any ambiguities herein or to appropriately adjust any mechanics or
procedures set forth herein so long as the rights of the Members are not
prejudiced thereby, or (iv) if such amendment is of an inconsequential nature
(as reasonably determined by the Managing Members) and does not affect the
rights of the Members in any adverse respect. Anything in the foregoing
provisions of this Section 17.12 to the contrary notwithstanding, this Agreement
shall be amended from time to time (without any required consent of the Members)
in each and every manner deemed necessary or appropriate by the Managing Members
or the tax matters Member to comply with the then existing requirements of the
Code and the Regulations and the Rulings of the Treasury Department or Internal
Revenue Service affecting the Company. Any amendment of the definition of the
term "Company Business" or expansion of the scope or coverage thereof shall not
itself amend or expand the scope or coverage of the restrictions imposed
pursuant to Section 14.01.

            (b) No failure or delay by any party in exercising any right, power
or privilege hereunder (other than a failure or delay beyond a period of time
specified herein) 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.

            (c) Except as provided in Article X hereof, this Agreement shall not
be assigned by the Members and no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
obligations.

            SECTION 17.13 No Third Party Beneficiaries. No person or entity
other than a party hereto shall have any rights or remedies under this
Agreement.

            SECTION 17.14 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no way
intended to describe, interpret, define or limit the scope, extent or intent of
this Agreement or any provision hereof.

                                       52
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have entered into this
Limited Liability Company Agreement or have caused this Agreement to be duly
executed by their respective authorized officers, in each case as of the date
first written above.

                                    Sempra Energy Information Solutions

                                    By:   __________________________________
                                    Name: __________________________________
                                    Title: _________________________________

                                    Modis, Inc.

                                    By:   __________________________________
                                    Name: __________________________________
                                    Title: _________________________________

                                    Cayenta.com

                                    By:   __________________________________
                                    Name: __________________________________
                                    Title: _________________________________

                                       53
<PAGE>

                                  SCHEDULE 1.01

                               Certain Definitions

            "Adjusted Capital Account" means, with respect to each Member, the
balance in such Member's Capital Account as of the end of the relevant Fiscal
Year, after giving effect to the following adjustments:

                  (i) Credit to such Capital Account any amounts which such
Member is obligated to restore pursuant to any provision of this Agreement or is
deemed to be obligated to restore pursuant to the penultimate sentences of each
of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

                  (ii) Debit to such Capital Account the items described in
Sections 1.704-(1)(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.

            "Adjusted Capital Account Deficit" means, with respect to each
Member, the deficit balance, if any, in such Member's Adjusted Capital Account
as of the end of the relevant Fiscal Year.

            "Affiliate" means, with respect to a specified Person, any Person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the specified Person, including,
without limitation, any partnership or joint venture in which the specified
Person (either alone or together with any other subsidiary) has, directly or
indirectly, an interest of 10% or more; provided that, with respect to each of
SEIS, Modis and Cayenta, an "Affiliate" means any non-regulated Person that
directly or indirectly is controlled by it. As used in this definition, the term
"control" means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, as trustee
or executor, by contract or credit arrangements or otherwise.

            "Agreement" means this Limited Liability Company Agreement of
Soliance Networks, as amended, modified, supplemented or restated from time to
time.

            "Asset Value" means, with respect to any asset or liability, such
asset's or liability's adjusted basis for federal income tax purposes, except as
follows:

                  (i) the initial Asset Value of any asset (other than money)
contributed by, or liability assumed from, a Member of the Company shall be the
value of such asset or liability as determined by Unanimous Vote of the Members;
and

                  (ii) the Asset Value of all assets and liabilities of the
Company shall be adjusted to equal their respective gross fair market values, as
determined by the Members Committee, in accordance with Regulations Section
1.704-1(b)(2)(iv)(f) at the following times:

                                       54
<PAGE>

(i) the acquisition of an additional interest in the Company by any new or
existing Member in exchange for more than a de minimis contribution to the
capital of the Company; (ii) the distribution by the Company to a Member of more
than a de minimis amount of Company assets other than money as consideration for
an interest in the Company; and (iii) the liquidation of the Company within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to clauses (i) and (ii) above shall be made only if
required by a Majority Vote of the Managing Members. Upon a revaluation of the
Company's assets pursuant to this clause (ii), each Member's Capital Account
shall be increased or decreased as if such assets were sold for their fair
market values and the gain or loss realized thereon were allocated among the
Members in accordance with Article VII hereof and Regulations Section
1.704-1(b)(2)(iv)(f).

            If the Asset Value of an asset or liability has been determined or
adjusted pursuant to paragraph (i) or paragraph (ii) above, such Asset Value
shall thereafter be reduced by the Depreciation taken into account with respect
to such asset for purposes of computing Net Profits and Net Losses.

                  (iii) The Asset Value of any item of Company assets
distributed to any Member shall be adjusted to equal the gross fair market value
(taking Code Section 7701(g0 into account) of such asset on the date of
distribution as determined by the Members' Committee; and

                  (iv) The Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of
the definition of "Net Profits" and "Net Losses" or Section 7.02 hereof;
provided, however, that Asset Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii)
is required in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv).

            If the Asset Value of an asset has been determined or adjusted
pursuant to subparagraph (ii) or (iv), such Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset, for
purposes of computing Net Profits and Net Losses.

            "Bankruptcy" of a Member shall be deemed to occur for purposes of
this Agreement if:

                  (i) an involuntary petition under any bankruptcy or insolvency
law or under the reorganization provisions of any such law is filed with respect
to such Member or a receiver of or for the property of such Member is appointed
without acquiescence of such Member, which petition or appointment remains
undischarged or unstayed for an aggregate period of 90 days (whether or not
consecutive); or

                                       55
<PAGE>

                  (ii) a voluntary petition under any bankruptcy or insolvency
law or under the reorganization provisions of any such law is filed by such
Member, a voluntary assignment of such Member's property for the benefit of
creditors is made, or a receiver of or for the property of such Member is
appointed by, or acquiesced in, by such Member.

            "Business Day" means any day, except a Saturday, Sunday or other day
on which commercial banking institutions in New York City are authorized or
directed by law or executive order to close.

            "Capital Account" means, with respect to any Member, the account
maintained for such Member in accordance with the provisions of Section 4.06.

            "Capital Contribution" means, with respect to any Member, the
aggregate amount of money contributed to the Company and the initial Asset Value
of any property (other than money) contributed to the Company pursuant to
Article IV with respect to the Membership Units held by such Member. In the case
of a Member that acquires an interest in the Company by virtue of an assignment
or transfer in accordance with the terms of this Agreement, "Capital
Contribution" means the Capital Contribution of such Member's predecessor to the
extent relating to the acquired interest.

            "Certificate " means the Certificate of Formation and any and all
amendments thereto and restatements thereof filed on behalf of the Company with
the office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any corresponding federal tax statute enacted after the date of this
Agreement. The reference to a specific section (ss.) of the Code refers not only
to such specific section but also to any corresponding provision of any federal
tax statute enacted after the date of this Agreement, as such specific section
or corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.

            "Company Business" means any activity, business, project or
undertaking related to the production or distribution of Products as
contemplated in Article XIII in which the Members' Committee by Majority Vote
determines the Company should be engaged, and any other activity, business,
project or undertaking approved by the Unanimous Vote of the Members Committee;
provided, that any such additional activities, businesses, projects or
undertakings approved by such a Unanimous Vote shall not itself amend or expand
the scope or coverage of the restrictions imposed pursuant to Section 14.01.

            "Company Minimum Gain" has the meaning given "partnership minimum
gain" in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

            "Covered Person" means a Member, any Affiliate of a Member, any
officers, directors, Representatives, shareholders, employees or partners or
members of a Member, or its respective Affiliates or any officers of the
Company.

                                       56
<PAGE>

            "Customer Contract" means written agreements between the Company,
directly or through an agent approved by the Members Committee, on the one hand,
and the customer, on the other hand, on such terms and subject to such
conditions as shall be within underwriting and other guidelines to be determined
from time to time by the Members Committee.

            "Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (c)
all obligations of such Person as lessee under leases that have been or should
be, in accordance with GAAP, recorded as capital leases, (d) all obligations,
contingent or otherwise, of such Person in respect of acceptances, letters or
credit or similar extensions of credit, (e) all Debt of others referred to in
clauses (a) through (d) above or clause (f) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (iii) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (f) all Debt referred to in clauses (a) through (e) above secured by
(or which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even through
such Person has not assumed or become liable for the payment of such Debt.
Notwithstanding the foregoing, Capital Contributions made pursuant to Article IV
shall not be considered Debt of any Person.

            "Dedicated Assets" means all or any of the SEIS Dedicated Assets,
the Modis Dedicated Assets and the Cayenta Dedicated Assets.

            "Delaware Act" means the Limited Liability Company Act, Delaware
Code ss.ss.18-101, et seq., as amended from time to time.

            "Depreciation" means, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
Fiscal Year or other period; provided, that if the Asset Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year or other period, Depreciation shall be an amount that bears
the same ratio to such beginning Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction with respect to such
asset for such Fiscal Year or other period bears to such beginning adjusted tax
basis; and provided further that, if the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Year or other
period is zero, Depreciation shall be determined with reference to such
beginning Asset Value using any reasonable method selected by the Members.

                                       57
<PAGE>

            "Fiscal Year" means (i) the period commencing upon the formation of
the Company and ending on December 31, 1999, (ii) any subsequent twelve month
period commencing on January 1 and ending on December 31, or (iii) any portion
of the period described in clause (ii) of this sentence for which the Company is
required to allocate Net Profits, Net Losses and other items of Company income,
gain, loss or deduction pursuant to Article VII hereof.

            "GAAP" means United States generally accepted accounting principles
as in effect from time to time.

            "Interest Rate" means the London Interbank Offered Rate (LIBOR) plus
2%.

            "Liens" means any liens, claims, encumbrances, security interests,
equities, charges and options of any nature whatsoever.

            "Majority Vote" means, with respect to any matter to be voted on by
the Representatives designated by the Members, the written approval of, or the
affirmative vote by, in the aggregate, a majority of the number of Membership
Units.

            "Managing Members" means each of SEIS, Modis and Cayenta and their
respective successors and permitted assigns.

            "Marketable Securities" means shares of common stock that are listed
and traded on a national exchange or the Nasdaq National Market.

            "Member" means any Person named as a member of the Company on
Schedule 2.01 hereto and any Person admitted as an additional Member pursuant to
the provisions of this Agreement, in each case, in such Person's capacity as a
member of the Company.

            "Member Nonrecourse Debt" has the same meaning as the term "partner
nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.

            "Member Nonrecourse Debt Minimum Gain" means an amount, with respect
to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.

            "Member Nonrecourse Deductions" has the same meaning as the term
"partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of
the Regulations.

            "Membership Unit" means an equity interest in the Company
representing such fractional part of the interest of all unit holders pursuant
to this Agreement as is equal to the quotient of one divided by the total number
of Membership Units.

                                       58
<PAGE>

            "Net Distributable Cash" means, for any period for which the amount
thereof is being determined, the net income for the Company for such period,
after the deduction of all expenses incurred (including without limitation, the
amortization of the acquisition cost of Customer Contracts over such period and
at such rate as shall be determined by the Members Committee in accordance with
GAAP, all interest expenses incurred (including Member loans for liquidity or
margin), and reasonable reserves for Customer Contract attrition and
repudiation), and as further adjusted by subtracting the amount of any of the
following added, and by adding any of the following subtracted, in determining
such net income (i) the restoration of any reserve except to the extent that
provision for such reserve was made during such period, (ii) the write-up of any
assets, (iii) net gains arising from the collection of insurance proceeds, (iv)
any net income of any entity in which the Company has an ownership interest
except to the extent of the cash dividends or distributions actually received by
the Company from such entity, and (v) Depreciation (other than amortization of
Customer Contracts and other assets); minus

                  (i) if the Company is not a taxable entity for federal income
tax purposes, the amount of distributions made or to be made by the Company to
its Members with respect to the Company's taxable income for such period; or if
the Company is a taxable entity for federal income tax purposes, the amount of
tax payable in respect of the Company's taxable income for such period; minus

                  (ii) to the extent not previously deducted, all interest, fees
and other charges which are due or have accrued during such period under or in
respect of all indebtedness of the Company, and all principal payments due or
payable during such period under or in respect of indebtedness, including in
each case Member loans, credit supports and other extensions of liquidity in
accordance with Section 4.03; minus

                  (iii) an amount equal to the product of (x) the sum of the
aggregate cash outlay and uses of funds (including without limitation, operating
expenses, debt service (including all principal, interest, fees and charges) and
capital expenditures) of the Company accrued or paid in respect of the previous
fiscal quarter, times (y) the number of fiscal quarters of the Company included
within the period for which Net Distributable Cash is being determined; minus

                  (iv) the amount of capital expenditures actually made during
such period.

            "Net Profits" and "Net Losses" mean, for each Fiscal Year, an amount
equal to the Company's taxable income or loss for such Fiscal Year, determined
in accordance with ss. 703(a) of the Code (but including in taxable income or
loss, for this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to ss. 703(a)(1) of the Code), with the following
adjustments:

                  (i) any income of the Company exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this definition shall be added to such taxable income or loss;

                                       59
<PAGE>

                  (ii) any expenditures of the Company described in ss.
705(a)(2)(B) of the Code (or treated as expenditures described in ss.
705(a)(2)(B) of the Code pursuant to Regulation ss. 1.704-1(b)(2)(iv)(i)) and
not otherwise taken into account in computing Net Profits or Net Losses pursuant
to this definition shall be subtracted from such taxable income or loss;

                  (iii) in the event the Asset Value of any asset of the Company
is adjusted in accordance with paragraph (ii) or paragraph (iii) of the
definition of "Asset Value" above, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for purposes of
computing Net Profits or Net Losses;

                  (iv) gain or loss resulting from any disposition of any asset
of the Company with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Asset Value of the
asset disposed of, notwithstanding that the adjusted tax basis of such asset
differs from its Asset Value;

                  (v) to the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Section 734(b) is required, pursuant to
Regulations Section 1.704(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member's Interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset ) or loss (if the adjustment decreases such basis) from the
disposition of such asset and shall be taken into account for purposes of
computing Net Profits or Net Losses; and

                  (vi) Notwithstanding any other provision of this definition,
any items which are specifically allocated pursuant to Section 7.02 or Section
7.03 hereof shall not be taken into account in computing Net Profits or Net
Losses.

            The amounts of the items of Company income, gain, loss or deduction
available to be specially allocated pursuant to Sections 7.02 and 7.03 shall be
determined by applying rules analogous to those set forth in subparagraphs (i)
through (vi) above. Net Profits and Net Losses shall be determined net of the
items of Company income, gain, loss or deduction specially allocated pursuant to
Sections 7.02 and 7.03.

            "Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.

            "Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.

            "Person" means any individual, corporation, partnership, limited
partnership, limited liability company, joint venture, trust, unincorporated or
governmental organization or any agency or political subdivision thereof.

                                       60
<PAGE>

            "Products" is defined as the provision of Application Service
Provider (ASP) and Web-hosting services for the utility industry (any company
engaged in the generation, distribution, transmission and retail sale of
electrical energy, gas and water to retail sellers or transporters of energy
commodity including municipalities, utilities and other energy service providers
(ESPs).

            "Property" means all real and personal property acquired by the
Company, including cash, and any improvement thereto, and shall include both
tangible and intangible property, but shall not include the SEIS Dedicated
Assets, Modis Dedicated Assets and Cayenta Dedicated Assets.

            "Rate Earned" shall mean the dollar value of interest earned on cash
invested based on the applicable short-term money market rate.

            "Regulations" means the income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

            "Related Agreements" means the Management Services Agreements, and
the License Agreements as any of the same may be amended and/or restated from
time to time.

            "Subsidiary" or "Subsidiaries" of any Person means any corporation,
partnership, limited liability company, joint venture or other legal entity of
which such person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than 50% of the stock or other
equity interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.

            "Transfer" means the voluntary or involuntary sale, assignment,
transfer, pledge, hypothecation or other disposition or conveyance of, or grant
of a Lien in respect of, legal or beneficial interest, directly or indirectly,
whether in one transaction or in a series of related transactions.

            "Transferee" means any Person that is a transferee of a Member's
interest in the Company, or part thereof.

            "Unanimous Vote" means, with respect to any matter to be voted on,
the written approval of, or the affirmative vote by, Representatives designated
by Members owning all of the Membership Units.

            "Unrecovered Capital" shall mean, as to a particular Member at a
particular time, the amount, if any, by which (i) the aggregate Capital
Contributions of such Member pursuant to Sections 4.01 and 4.03(a)(iii) hereof
up to such time, exceeds (ii) all amounts theretofore distributed as a return of
Capital Contributions in respect of such Member's Membership Interest in the
Company pursuant to Sections 8.05(b)(i) and 11.04(b)(iv) hereof.

                                       61
<PAGE>

                                       62
<PAGE>

                                  SCHEDULE 2.01

                    Members, Capital Contributions, Addresses
                         and Number of Membership Units

Member                              Capital                   Number of
Name and Address                    Contribution              Membership Units

Sempra Energy
Information Solutions               $4 million                    800
101 Ash Street
San Diego, CA  92101-3017

Modis, Inc.                         $5 million                    100
1 Independent Drive
Jacksonville, FL  32202

Cayenta.com                         $5 million                    100
225 Broadway, Suite 1500
San Diego, CA  92101

                                       1
<PAGE>

                                  SCHEDULE 6.03

                  Initial Representatives on Members Committee

Initial SEIS                  Initial Modis                 Initial Cayenta
Representatives               Representatives               Representatives

Don Felsinger                 Tim Payne                     Gene Ray
Jerry Deems                   Randy Ridenour                Eric DeMarco

                    Initial Designees on Management Committee

Initial SEIS                  Initial Modis                 Initial Cayenta
Designees                     Designees                     Designees

Dale Kelly-Cochrane           Randy Ridenour                Dave Porreca

                                       2
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   SCHEDULES
                                   ---------

SCHEDULE 1.01           Certain Definitions
SCHEDULE 2.01           Members, Capital Contributions, Addresses and Number of
                        Membership Units
SCHEDULE 6.03           Initial Representatives; Management Committee

                                       i<PAGE>

                                  CONFIDENTIAL

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

                          AGREEMENT AND PLAN OF MERGER

                                   AS AMENDED

                           DATED AS OF OCTOBER 4, 1999

                                  BY AND AMONG

                                INTEL CORPORATION

                                  IPIVOT, INC.

                                       AND

                           WCT ACQUISITION CORPORATION

                                       AND

               BRETT HELM AND WILLIAM STENSRUD, AS SECURITYHOLDER
                                 REPRESENTATIVE

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

<PAGE>

                                  CONFIDENTIAL

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
                                                                                   ----
<S>                                                                                <C>
ARTICLE 1 THE MERGER................................................................1

     Section 1.1. The Merger........................................................1

     Section 1.2. Effective Time ...................................................1

     Section 1.3. Closing of the Merger ............................................2

     Section 1.4. Effects of the Merger ............................................2

     Section 1.5. Certificate of Incorporation and Bylaws ..........................2

     Section 1.6. Directors .............................. .........................2

     Section 1.7. Officers .........................................................2

     Section 1.8. Conversion of Shares .............................................2

     Section 1.9. Dissenters' Rights ...............................................4

     Section 1.10. Payment for Shares; Escrow Amount ...............................5

     Section 1.11  Company's Stock Options .........................................6

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY ............................7

     Section 2.1. Organization and Qualification; Subsidiaries; Investments ........7

     Section 2.2. Capitalization of the Company ....................................8

     Section 2.3. Authority Relative to this Agreement; Recommendation .............9

     Section 2.4. Financial Statements ............................................10

     Section 2.5. Consents and Approvals; No Violations ...........................10

     Section 2.6. No Default ......................................................11

     Section 2.7. No Undisclosed Liabilities; Absence of Changes ..................11

     Section 2.8. Litigation ......................................................12

     Section 2.9. Compliance with Applicable Law ..................................12

     Section 2.10. Employee Benefits ..............................................12

                                       i
<PAGE>

                                  CONFIDENTIAL

     Section 2.11. Labor and Employment Matters ...................................16

     Section 2.12. Environmental Laws and Regulations .............................17

     Section 2.13. Taxes ..........................................................17

     Section 2.14. Intellectual Property ..........................................19

     Section 2.15. Title to Personal Property; Leases; Absence of Liens ...........24

     Section 2.16. Insurance ......................................................24

     Section 2.17. Certain Business Practices .....................................25

     Section 2.18. Product Warranties .............................................25

     Section 2.19. Material Contracts .............................................25

     Section 2.20. Suppliers and Customers ........................................25

     Section 2.21. Vote Required ..................................................26

     Section 2.22. Brokers ........................................................26

     Section 2.23. Representations Complete .......................................26

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION ................26

     Section 3.1. Organization ....................................................26

     Section 3.2. Authority Relative to this Agreement ............................26

     Section 3.3 Consents and Approvals; No Violations ............................27

     Section 3.4. Brokers .........................................................27

     Section 3.5. Litigation ......................................................27

     Section 3.6. Interim Operation of Acquisition ................................27

ARTICLE 4 COVENANTS ...............................................................28

     Section 4.1. Operation of Business Prior to Effective Time ...................28

     Section 4.2. No Solicitation or Negotiation; Non-Solicitation of Employees ...31

     Section 4.3. Access to Information  ..... ....................................32

                                       ii
<PAGE>

                                  CONFIDENTIAL

     Section 4.4. Certain Filings; Reasonable Efforts; Meeting of Stockholders.....33

     Section 4.5. Public Announcements ............................................34

     Section 4.6. Notification of Certain Matters .................................35

     Section 4.7. Additions to and Modification of Company Disclosure Schedule.....35

     Section 4.8. Access to Company Employees .....................................35

     Section 4.9. Deferred Contribution Pension Plans..............................36

     Section 4.10. Service Credit; Employment .....................................36

     Section 4.11. Indemnification and Directors' and Officers Insurance ..........37

     Section 4.12. Fees and Expenses...............................................38

ARTICLE 5 CONDITIONS TO CONSUMMATION OF THE MERGER ................................39

     Section 5.1. Conditions to Each Party's Obligations to Effect the Merger .....39

     Section 5.2. Conditions to the Obligations of the Company ....................39

     Section 5.3. Conditions to the Obligations of Parent and Acquisition .........40

ARTICLE 6 TERMINATION; AMENDMENT; WAIVER ..........................................42

     Section 6.1. Termination .....................................................42

     Section 6.2. Effect of Termination ...........................................43

     Section 6.3. Amendment .......................................................43

     Section 6.4. Extension; Waiver ...............................................43

ARTICLE 7 SURVIVAL; INDEMNIFICATION ...............................................43

     Section 7.1. General Survival ................................................43

     Section 7.2. Indemnification .................................................44

     Section 7.3. Manner of Indemnification .......................................45

     Section 7.4. Securityholder Representative ...................................45

     Section 7.5. Third-Party Claims ..............................................46

     Section 7.6. Exclusive Remedy ................................................47

                                      iii
<PAGE>

                                  CONFIDENTIAL

ARTICLE 8 MISCELLANEOUS............................................................47

     Section 8.1. Entire Agreement; Assignment ....................................47

     Section 8.2. Validity ........................................................47

     Section 8.3. Notices .........................................................47

     Section 8.4. Dispute Resolution ..............................................49

     Section 8.5. Governing Law and Venue; Waiver of Jury Trial ...................49

     Section 8.6. Descriptive Headings ............................................50

     Section 8.7. Parties in Interest .............................................50

     Section 8.8. Certain Definitions .............................................50

     Section 8.9. Personal Liability ..............................................52

     Section 8.10. Counterparts....................................................52

</TABLE>

                                       iv
<PAGE>

                                  CONFIDENTIAL

                               TABLE OF EXHIBITS

Exhibit A.......Form of Certificate of Merger
Exhibit B.......Form of Escrow Agreement
Exhibit C.......Matters to be Covered by Opinion of Legal Counsel to Parent
Exhibit D.......Matters to be Covered by Opinion of Legal Counsel to the Company

                                   TABLE OF CONTENTS
                                           TO
                              COMPANY DISCLOSURE SCHEDULE

Section 2.2(a) Capitalization .............................................8
Section 2.2(b) Options ....................................................8
Section 2.2(c) Repurchase Rights ..........................................9
Section 2.3(a) Other Agreements ...........................................9
Section 2.4 Financial Statement Exceptions ...............................10
Section 2.5 Consents and Approvals .......................................10
Section 2.6 Defaults .....................................................11
Section 2.7 Undisclosed Liabilities ......................................11
Section 2.8 Litigation ...................................................12
Section 2.10(b) Benefit Plan Obligation ..................................13
Section 2.10(d) Pension Plan .............................................13
Section 2.10(f) Suits ....................................................14
Section 2.10(h) Reportable Event .........................................14
Section 2.10(j) Excess Parachute Payment .................................14
Section 2.10(l) Compensation Plan Requirement Disclosures.................15
Section 2.10(o) Amendments ...............................................15
Section 2.10(s) Retroactive Premiums .....................................16
Section 2.11 Labor and Employment Matters ................................16
Section 2.13(b) Delinquent or Inaccurate Tax Returns .....................18
Section 2.13(d) Tax Claims ...............................................18
Section 2.13(e) Excess Parachute Payments ................................18
Section 2.13(f) Tax Sharing Arrangements .................................18
Section 2.13(g) Utilization of Net Operating Losses ......................19
Section 2.13(h) Adjustments ..............................................19
Section 2.14(a) Intellectual Property ....................................19
Section 2.14(b)(i) Trademarks - Compliance With Legal Requirements .......19
Section 2.14(e) License Agreements .......................................20
Section 2.14(j) No Infringement by Third Parties .........................22
Section 2.14(k) Assignment .............................................. 22
Section 2.14(l) Software .................................................22
Section 2.14(m) Performance of Existing Software Products ............... 22

                                       v

<PAGE>

                                  CONFIDENTIAL

                                             TABLE OF DEFINED TERMS

<TABLE>
<CAPTION>
                                                             Cross Reference
Term                                                          in Agreement           Page
----                                                          ------------           ----
<S>                                                          <C>                     <C>
1997 Stock Option Plan Section 1.11, 6
Section 2.7 Undisclosed Liabilities, 11
accumulated funding deficiency Section 2.10(h), 14
Acquisition Preamble, 1
Addition Section 4.7, 35
Additions Section 4.7, 35
affiliate Section 8.8(a), 50
Agreement Preamble, 1
Applicable Law Section 8.8(b), 50
Assumed Options Section 1.11, 7
at will Section 4.10(c), 37
business day Section 8.8(c), 51
California GCL Section 1.9, 4
Capital stock Section 8.8(d), 51
Certificate of Merger Section 1.2, 1
Section 2.14(k) Assignment, 22
Closing Date Section 1.3, 2
Closing Section 1.3, 2
CNDA Section 4.3(c), 33
Commitment Letter Section 8.8(e), 51
Common Amount Section 1.8(a)(i), 3
common control Section 2.10(d), 13
Commonly Controlled Entity Section 2.10(a), 12
Communication Product Group Section 4.2(b), 32
Company 401(k) Plan Section 4.9(a), 36
Company Balance Sheet Section 2.4, 10
Company Board Section 2.3(a), 9
Company Common Stock Section 1.8(a), 2
Company Disclosure Schedule Article 2, 7
Company Permits Section 2.9, 12
Company Preamble, 1
Company Preferred A Stock Section 1.8(a), 2
Company Preferred B Stock Section 1.8(a), 2
Company Stock Option Section 1.11, 6
Company Warrants Section 1.8(a), 2
Compensation and Benefit Plans Section 2.10(a), 12
consenting corporation Section 2.13(i), 19
Contract Section 2.19(a), 25
Copyrights Section 2.14(a), 19
Designated Employees Section 5.3(f), 40
DGCL Section 1.1, 1
Dissenting Shares Section 1.9, 4
</TABLE>

                                      vii

<PAGE>

                                  CONFIDENTIAL

Section 2.3(a) Other Agreements, 9
Section 2.4 Financial Statement Exceptions, 10
Section 2.5 Consents and Approvals, 10
Section 2.6 Defaults, 11
Section 2.8 Litigation, 12
Section 4.1 (a) Option Grants, 28
Section 5.3(d) Required Consents, 40
Section 5.3(f) Employees, 40
Section 8.8(f) Knowledge, 51
Securities Section 1.8(a), 2
Security Section 1.8(a), 2
Securityholder Indemnitees Section 7.2(b), 44
Securityholder Representative Section 7.4, 45
SERMA Section 4.10(a)(vii), 36
Service Credit Section 4.10(a), 36
Share Section 1.8(a)(i), 3
Share Subject to Repurchase Section 8.8(l), 52
Software Section 2.14(l), 22
Stock Option Plans Section 1.11, 6
subsidiary or subsidiaries Section 8.8(m), 52
Supply Contracts Section 2.14(p), 23
Surviving Corporation Section 1.1, 1
Tax or Taxes Section 2.13(a)(i), 17
Tax Return Section 2.13(a)(ii), 18
Third Party Expenses Section 4.12, 38
Trade Secrets Section 2.14(a), 19
Trademarks Section 2.14(a), 19
Unvested Non-Employee Options Section 1.8(a), 3
Vested Non-Employee Options Section 1.8(a), 2
Year 2000 Compliant Section 2.14(o)(i), 23

                                       x
<PAGE>

                                  CONFIDENTIAL

                          AGREEMENT AND PLAN OF MERGER

              THIS AGREEMENT AND PLAN OF MERGER, as amended, (this "Agreement")
dated as of October 4, 1999, is by and among IPIVOT, INC., a Delaware
corporation (the "Company"), INTEL CORPORATION, a Delaware corporation
("Parent), WCT ACQUISITION CORPORATION, a Delaware corporation and a wholly
owned subsidiary of Parent ("Acquisition") and, for purposes of Article 7
hereof, a committee consisting of Brett Helm and William Stensrud, as
representatives of the Escrow Securityholders (as defined herein). Capitalized
terms not otherwise defined herein shall have the meanings ascribed to such
terms in Section 8.8 of this Agreement.

              WHEREAS, the parties have each determined that the Merger (as
defined below) is advisable and fair and in the best interests of their
respective stockholders; and

              WHEREAS, concurrently herewith, as an essential inducement for
Parent and Acquisition entering into this Agreement, certain stockholders of the
Company have executed irrevocable proxy and voting agreements pursuant to which
such stockholders have agreed to vote in favor of the Merger and the
transactions contemplated by this Agreement; and

              WHEREAS, as an essential inducement for Parent and Acquisition
entering into this Agreement, certain employees of the Company have agreed to
enter into employment and non-competition agreements with Parent and the
Company;

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

                                    ARTICLE 1

                                   THE MERGER

              Section 1.1     THE MERGER. At the Effective Time (as defined
below) and upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Acquisition
shall be merged with and into the Company (the "Merger"). Following the Merger,
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Acquisition shall cease.
Parent, as the sole stockholder of Acquisition, hereby approves the Merger and
this Agreement.

              Section 1.2.    EFFECTIVE TIME. Subject to the terms and
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 1.3): (a) a Certificate of Merger substantially in the form of EXHIBIT A
(the "Certificate of Merger") shall be duly executed by the Company and
thereafter delivered to the Secretary of State of the State of Delaware for
filing pursuant to Section 251 of the DGCL and (b) the parties shall make such
other filings with the Secretary of State of the State of Delaware as shall
be necessary to effect the Merger.

<PAGE>

                                  CONFIDENTIAL

The Merger shall become effective at such time as a properly executed copy of
the Certificate of Merger is duly filed with the Secretary of State of the State
of Delaware in accordance with Section 251 of the DGCL, or such later time as
Parent and the Company may agree upon and as may be set forth in the Certificate
of Merger (the time the Merger becomes effective being referred to herein as the
"Effective Time").

              Section 1.3.    CLOSING OF THE MERGER. The closing of the Merger
(the "Closing") will take place at a time and on a Date (the "Closing Date") to
be specified by the parties, which shall be no later than the second business
day after satisfaction (or waiver) of the latest to occur of the conditions set
forth in Article 5 at the offices of Gibson, Dunn & Crutcher LLP, One
Montgomery Street, San Francisco, California 94104, unless another time, date or
place is agreed to in writing by the parties hereto.

              Section 1.4.    EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the foregoing
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and Acquisition shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.

              Section 1.5.    CERTIFICATE OF INCORPORATION AND BYLAWS. The
Certificate of Incorporation of the Surviving Corporation will be amended as set
forth on Exhibit A to the Certificate of Merger. The Bylaws of Acquisition in
effect at the Effective Time shall be the Bylaws of the Surviving Corporation
until amended in accordance with Applicable Law.

              Section 1.6.    DIRECTORS. The directors of Acquisition at the
Effective Time shall be the initial directors of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation until such director's successor is duly elected or
appointed and qualified.

              Section 1.7.    OFFICERS. The officers of Acquisition at the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation until such officer's successor is duly elected or
appointed and qualified.

              Section 1.8.    CONVERSION OF SHARES.

              (a)     The purchase price (the "Merger Consideration") payable
by Parent for each of the following securities (individually a "Security" and
collectively the "Securities") of the Company issued and outstanding as of the
Effective Time: (i) common stock ("Company Common Stock"), (ii) Series A
Preferred Stock ("Company Preferred A Stock"), (iii) Series B Preferred Stock
("Company Preferred B Stock"), (iv) all options to purchase Company Common
Stock held by non-employee service providers that have vested on or before the
Closing Date ("Vested Non-Employee Options") and (v) all warrants to purchase
shares of Company Common Stock ("Company Warrants"), shall be as follows:

                                       2
<PAGE>

                                  CONFIDENTIAL

                      (i)     $22.43 for each share (a "Share") of Company
Common Stock (the "Common Amount"), giving effect to the conversion of the
Company Preferred A Stock AND THE COMPANY PREFERRED B Stock, where each such
share of Company Preferred A Stock and Company Preferred B Stock would be
entitled to receive the Common Amount for each Share into which the Preferred
Stock is convertible;

                      (ii)    an amount for each share of Company Common
Stock subject to a Vested Non-Employee Option calculated as the Common Amount
less the exercise price therefor; and

                      (iii)   an amount for each share of Company Common
Stock subject to a Company Warrant calculated as the Common Amount less the
exercise price therefor.

All options to purchase Company Common Stock held by non-employee service
providers that have not vested on or before the Closing Date ("Unvested
Non-Employee Options") shall be entitled to receive, for each share of Company
Common Stock subject to such Unvested Non-Employee Options, an amount in cash
equal to the Common Amount less the exercise price therefor, but only if and
when the performance and vesting criteria with respect thereto are satisfied;
after such criteria have been satisfied, Parent shall pay such amount promptly
following written notice from the holder. Notwithstanding the foregoing, in no
event shall the sum of the aggregate Merger Consideration payable pursuant to
Clauses (i) through (iii) of Section 1.8(a) above, plus the aggregate amount of
the difference between the Common Amount and the exercise price of all Assumed
Options and Unvested Non-Employee Options, exceed the Maximum Merger
Consideration. In the event that the aggregate Merger Consideration so payable,
plus such additional aggregate amount, would exceed the Maximum Merger
Consideration, the Common Amount shall be adjusted downward to a number such
that the sum of all payments under Clauses (i) through (iii), plus such
additional aggregate amount, does not exceed the Maximum Merger Consideration.

              (b)     At the Effective Time:

                      (i)     Except for Dissenting Shares and the
securities referred to in clause 1.8(b)(ii), each Share will automatically, by
virtue of the Merger and without any action on the part of the holder thereof,
be canceled and converted into a right to receive from Parent cash in the amount
as determined pursuant to this Section 1.8.

                      (ii)    Each Share held in the treasury of the
Company and each security of the Company held by Parent, Acquisition or any
subsidiary of Parent, Acquisition or the Company immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of Acquisition, the Company or the holder thereof, be canceled, retired and
cease to exist, and no consideration will be delivered in exchange therefor.

                      (iii)   At the Effective Time, each outstanding share
of common stock of Acquisition shall be converted into one (1) fully paid and
non-assessable share of common stock of the Surviving Corporation and shall
constitute the only shares of capital stock of the Surviving Corporation
outstanding immediately after the Effective time.

                                       3
<PAGE>

                                  CONFIDENTIAL

                      (iv)    The initial purchase price per Share,
excluding Shares Subject to Repurchase and Dissenting Shares (and any Shares
with respect to which dissenters' rights have not terminated) (the "Initial
Purchase Price") shall be: (1) the amount set forth as the purchase price for
such Security in Section 1.8(a)(i) through (iii) (subject to reduction to the
extent any amounts in Clauses (i) through (iii) of Section 1.8(a) are reduced
pursuant to such Section), less (2)(i) Thirty Million Dollars ($30,000,000)
divided by (ii) the number of Shares outstanding as of the Effective Time less
the number of Shares Subject to Repurchase and Dissenting Shares (and other
Shares with respect to which dissenters' rights have not terminated) as of the
Effective Time, plus the number of Shares underlying Vested Non-Employee Options
and the number of Shares underlying Company Warrants. With respect to each Share
Subject to Repurchase, the Merger Consideration otherwise payable shall be
retained and held by parent until payment by parent shall be due upon lapse of
the Company's right of repurchase for such Shares Subject to Repurchase in
accordance with the 1997 Stock Option Plan and, the agreements entered into
thereunder. Subject to compliance with applicable securities and other laws
(including filing of the Registration Statement on Form S-8 by Parent referred
to in Section 1. 11), holders of Shares Subject to Repurchase may elect to apply
the Merger Consideration to which such holders are entitled to purchase shares
of Parent Common Stock at a price equal to the last sale price for a share of
Parent Common Stock on the trading day immediately preceding the Effective Time,
as reported on the NASDAQ National Market; PROVIDED, HOWEVER, that the shares so
purchased shall remain subject to the restrictions on the Shares held by such
Holders prior to the Effective Time.

              (c)     If between the date of this Agreement and the Effective
Time, the number of outstanding shares of Company Common Stock, Company
Preferred A Stock or Company Preferred B Stock is changed into a different
number of shares or a different class, by reason of any, stock dividend,
subdivision, reclassification, recapitalization, split-up, combination, exchange
of shares, or the like, the per share amounts set out in Sections 1.8(a) and (b)
will be correspondingly adjusted to reflect such change.

              Section 1.9.    DISSENTERS' RIGHTS. Shares that have not been
voted for approval of this Agreement and with respect to which a demand for
payment and appraisal have been properly made in accordance with Chapter 13 of
the California General Corporation Law ("California GCL") or Section 262 of the
DGCL, as applicable ("Dissenting Shares" ), will not be converted into the right
to receive the Merger Consideration otherwise payable with respect to such
Shares at or after the Effective Time but will be converted into the right to
receive such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to the laws of the States of Delaware or California.
If a holder of Dissenting Shares ("Dissenting Stockholder") withdraws his or
her demand for such payment and appraisal or becomes ineligible for such payment
and appraisal, then, as of the Effective Time or the occurrence of such event of
withdrawal or ineligibility, whichever last occurs, such holder's Dissenting
Shares will cease to be Dissenting Shares and will be converted into the right
to receive, and will be exchangeable for, the Merger Consideration into which
such Dissenting Shares would have been converted pursuant to Section 1.8 hereof.
The Company will give Parent and Acquisition prompt notice of any demand
received by the Company from a holder of Dissenting Shares for appraisal of
Shares, and Parent shall have the right, at its sole

                                       4
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                                  CONFIDENTIAL

expense, to participate in all negotiations and proceedings with respect to such
demand The Company agrees that, except with the prior written consent of Parent
and Acquisition, or as required under the California GCL or the DGCL, it will
not voluntarily make any payment with respect to, or settle or offer or agree to
settle, any such demand for appraisal. Each Dissenting Stockholder who, pursuant
to the provisions of Chapter 13 of the California GCL or Section 262 of the
DGCL, becomes entitled to payment of the value of the Dissenting Shares will
receive payment therefor but only after the value therefor has been agreed upon
or finally determined pursuant to such provisions. Any Merger Consideration that
would have been issuable with respect to Dissenting Shares will be retained by
Parent.

              Section 1.10.   PAYMENT FOR SHARES; ESCROW AMOUNT.

              (a)     On the Closing Date, Parent shall deposit with Citibank,
N.A., as paying agent (the "Paying Agent"), for the benefit of the holders of
Securities, cash in U.S. Dollars in an amount that is equal to the aggregate
Initial Purchase Price payable pursuant to Section 1.8(b)(iv) as of the
Effective Time, excluding (1) the aggregate amount that would be payable with
respect to Dissenting Shares and other Shares with respect to which dissenters'
rights have not terminated and (2) the aggregate amount payable for Shares
Subject to Repurchase. From time to time after the Closing Date, Parent shall
promptly deposit with the Paying Agent the amounts that equal the Initial
Purchase Price multiplied by Shares as to which remaining outstanding
dissenter's rights have permanently terminated for the benefit of the holders of
such Shares.

                      (i)     After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of shares of
capital stock of the Company that were outstanding immediately prior to the
Effective Time.

                      (ii)    Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each person who was, at the
Effective Time, a holder of record of Securities of the Company a form of letter
of transmittal (which shall specify that delivery shall be effected and risk of
loss and title to the certificates shall pass only upon delivery of the
certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and instructions
for use in effecting the surrender of the certificates or agreements that,
immediately prior to the Effective Time, represented any of such Securities in
exchange for payment therefor. Upon surrender to the Paying Agent of such
certificates or agreements (or affidavit of loss or destruction in lieu thereof,
including any suitable bond or indemnity that may be required by Parent or the
Paying Agent in their sole discretion), together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, the Paying Agent shall promptly make payment to the persons entitled
thereto by check or wire transfer, as the case may be, in the amount equal to
the price to which such person is entitled pursuant to Section 1.8 less any
required tax withholdings. No interest will be paid or will accrue on the amount
payable upon the surrender of any such certificate or agreements. If payment is
to be made to a person other than the registered holder of the certificate or
agreement surrendered, it shall be a condition of such payment that the
certificate or agreement so surrendered shall be properly endorsed or

                                       5
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                                  CONFIDENTIAL

otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the certificate or agreement
surrendered or establish to the reasonable satisfaction of the Surviving
Corporation or the Paying Agent that such tax has been paid or is not
applicable.

                      (iii)   One hundred and eighty (180) days following
the Effective Time, Parent shall be entitled to cause the Paying Agent to
deliver to it any funds (including any interest received with respect thereto)
made available to the Paying Agent that have not been disbursed to holders of
certificates or agreements formerly representing securities of the Company
outstanding on the Effective Time, and thereafter such holders shall be entitled
to look to the Surviving Corporation only as general creditors thereof with
respect to the cash payable upon due surrender of their certificates or
agreements.

                      (iv)    Notwithstanding the foregoing, neither the
Paying Agent nor any party hereto shall be liable to any holder of certificates
or agreements formerly representing securities of the Company for any amount
paid to a public official pursuant to any applicable abandoned property, escheat
or similar law. The Surviving Corporation shall pay all charges and expenses,
including those of the Paying Agent, in connection with the exchange of cash for
securities of the Company.

              (b)     At the Closing, Parent shall deposit Thirty Million
Dollars ($30,000,000) (the "Escrow Amount") payable by it to the holders of the
Shares (other than Shares Subject to Repurchase, Dissenting Stockholders and
other holders with respect to which dissenters' rights have not terminated) and
the Vested Non-Employee Options and the Company Warrants (collectively, the
"Escrow Securityholders"), with Citibank, N.A. or another third person mutually
satisfactory to Parent and the Company, as escrow agent (the "Escrow Agent"), to
provide for the payment of any obligations relating to or arising out of
breaches of representations, warranties or covenants of the Company contained
herein, pursuant to the provisions of an escrow agreement (the "Escrow
Agreement") in substantially the form of Exhibit B. The parties acknowledge that
any securities of the Company held by Parent shall be canceled pursuant to the
terms of the Merger and that therefore the term Merger Consideration does not
include payment for any securities of the Company held by Parent or held in
treasury by the Company.

              Section 1.11.   COMPANY'S STOCK OPTIONS. For the purpose of this
Agreement, "Stock Option Plans" means the 1997 Stock Option/Stock Issuance Plan
(the "1997 Stock Option Plan") and the Stock Option Plan of ServNOW! Net
Technologies, Inc. At the Effective Time, each outstanding option to purchase
shares of Company Common Stock (a "Company Stock Option") under the Stock Option
Plans, whether vested or unvested, other than Vested Non-Employee Options and
invested Non-Employee Options, will be assumed by Parent. Section 2.2(b) of the
Company Disclosure Schedule sets forth a true and complete list as of the date
hereof of all holders of outstanding Company Stock Options, the exercise or
vesting schedule, the exercise price per share, the term of each such Company
Stock Option, whether such option is a nonqualified stock option or incentive
stock option and any

                                       6
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                                  CONFIDENTIAL

restrictions on exercise or sale of the option or underlying shares. At the
Effective Time, the Company shall deliver to Parent an updated Section 2.2(b) of
the Company Disclosure Schedule. Each such option so assumed by Parent under
this Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in such option and, if applicable, in the Stock Option
Plans, immediately prior to the Effective Time, including provisions with
respect to vesting, except that (i) such option will be exercisable for that
number of whole shares of Parent common stock, par value $.001 per share
("Parent Common Stock"), equal to the product (rounded down to the nearest whole
share) of the number of shares of Company Common Stock that were issuable upon
exercise of such option immediately prior to the Effective Time multiplied by
the Exchange Ratio (as hereinafter defined), and (11) the per share exercise
price under each such Company Stock Option shall be adjusted by dividing the per
share exercise price of each such Company Stock Option by the Exchange Ratio,
and rounding up to the nearest cent. The terms of each Company Stock Option
shall, in accordance with its terms, be subject to further adjustment as
appropriate to reflect any stock split, stock dividend, recapitalization or
other similar transaction with respect to Parent Common Stock on or subsequent
to the Effective Time. The "Exchange Ratio" is the Common Amount divided by the
last sale price for a share of Parent Common Stock on the trading day
immediately preceding the Effective Time, as reported on the Nasdaq National
Market. Parent shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Parent Common Stock for delivery upon the
exercise of the options assumed by Parent. Parent will file no later than thirty
(30) days following the Closing Date, a registration statement on Form S-8 (or
any successor to Form S-8) so as to register the Parent Common Stock subject to
the options assumed by Parent pursuant to this Section 1.11 and shall use its
reasonable efforts to effect such registration and to maintain the effectiveness
of such registration statement (and the current status of the prospectus
contained therein) for so long as such options remain outstanding. At or before
the Effective Time, the Company shall cause to be effected, in a manner
reasonably satisfactory to Parent, amendments to the Stock Option Plans to give
effect to the foregoing provisions of this Section 1.11. Options to purchase
Parent Company Stock assumed under this Section 1.11 are referred to as the
"Assumed Options."

                                    ARTICLE 2

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      The Company hereby represents and warrants to each of Parent and
Acquisition, subject to the exceptions set forth in the Disclosure Schedule (the
"Company Disclosure Schedule") delivered by the Company to Parent in accordance
with Section 4.7 (which exceptions shall specifically identify a Section or
Subsection, as applicable, to which such exception relates) that:

              Section 2. 1.   ORGANIZATION AND QUALIFICATION: SUBSIDIARIES:
                              INVESTMENTS.

              (a)     The Company does not have any subsidiaries and is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation

                                       7
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                                  CONFIDENTIAL

and has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted. The Company
has heretofore delivered to Parent accurate and complete copies of its
Certificate of Incorporation and bylaws as currently in full force and effect

              (b)     The Company is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary.

              (c)     The Company does not own any equity investment or other
ownership interest in any person.

              Section 2.2.    CAPITALIZATION OF THE COMPANY.

              (a)      The authorized capital stock of the Company consists
solely of (i) Twenty-Four Million Six Hundred Fifty Thousand (24,650,000) shares
of authorized Company Common Stock, Six Million Six Hundred Seventy-Five
Thousand One Hundred Thirty-Six (6,675,136) shares of which are issued and
outstanding on the date hereof, and (ii) Seven Million One Hundred Thousand
(7,100,000) shares of authorized preferred stock, of which (x) Four Million Two
Hundred Twenty-Five Thousand (4,225,000) shares have been authorized and
designated as the Series A Preferred Stock, all of which are issued and
outstanding on the date hereof (and such shares are convertible into 8,450,000
shares of Company Common Stock), (y) Two Million Eight Hundred Seventy-Five
Thousand (2,875,000) shares have been authorized and designated as the Series B
Prefer-red Stock, Two Million Eight Hundred Thousand (2,800,000) shares of which
are issued and outstanding on the date hereof (and such shares are convertible
into 5,600,000 shares of Company Common Stock), and (z) no other shares have
been authorized or designated as a series or are issued and outstanding as of
the date hereof. On the date hereof, the Company Common Stock, the Company A
Preferred Stock and the Company B Preferred Stock are held of record and
beneficially by the persons with the addresses of record and in the amounts with
the corresponding certificate numbers set forth in Section 2.2(a) of the Company
Disclosure Schedule. All outstanding Shares are duly authorized, validly issued,
fully paid and nonassessable, and except as set forth in Section 2.2(a) of the
Company Disclosure Schedule, not subject to preemptive rights created by
statute, the Certificate of Incorporation or Bylaws of the Company, any,
agreement to which the Company is a party or by which it is bound or otherwise.

              (b)     Except as set forth in Section 2.2(b) of the Company
Disclosure Schedule, there are not outstanding (i) any options, warrants or
other rights to purchase from the Company any capital stock or other securities
of the Company, (ii) any securities convertible into or exchangeable for shares
of such capital stock or securities, (iii) any other commitments or rights of
any kind for the Company to issue additional shares of capital stock,
options, warrants or other securities or (iv) any equity equivalent or other
ownership interests in the Company or similar rights. Such Section 2.2(b) sets
forth a correct and complete list of each of the foregoing as of the date
hereof, including the record and beneficial holder thereof,

                                       8
<PAGE>

                                  CONFIDENTIAL

a description of the nature of such security, the amount of securities held, the
exercise, conversion or exchange rights relating thereto, including a schedule
of vesting, and the type and amount of securities into which such securities are
exercisable, convertible or exchangeable. Except as set forth in Section 2.2(b)
of the Company Disclosure Schedule, no Company Stock Option shall accelerate
solely as a consequence of the Merger or the other transactions contemplated by
this Agreement.

              (c)     Except as set forth in Section 2.2(c) of. the Company
Disclosure Schedule, as of the date hereof, there are no outstanding rights or
obligations of the Company to repurchase, redeem or otherwise acquire any
securities of the Company or other securities referred to in Section 2.2(b)
above. Except as set forth in Section 2.2(c) of the Company Disclosure Schedule
there are no stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or by which it is bound relating
to the voting or registration of any shares of capital stock of the Company.

              Section 2.3.    AUTHORITY RELATIVE TO THIS AGREEMENT;
                              RECOMMENDATION.

              (a)     The Company has all necessary corporate power and
authority to execute and deliver this Agreement, the Escrow Agreement, the
Employment Agreements and the Non-Competition Agreements (the "Other
Agreements"), to perform its obligations under this Agreement and the Other
Agreements, and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Other Agreements, and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by the Board of Directors of the Company (the "Company
Board"), and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the Other Agreements, or to consummate
the transactions contemplated hereby or thereby, except the approval of this
Agreement by (i) the holders of a majority of the outstanding shares of Company
Common Stock, (ii) the holders of a majority of the outstanding shares' of
Company Common Stock, Company Preferred A Stock and the Company Preferred B
Stock voting together as a single class and (iii) the holders of sixty-six and
two-thirds percent (66-2/3%) of the outstanding shares of Company Preferred A
Stock arid Company Preferred B Stock voting together as a single class. This
Agreement and the Other Agreements have been duly and validly executed and
delivered by the Company and constitute, assuming the due authorization,
execution and delivery hereof and thereof by Parent and/or Acquisition, the
valid, legal and binding agreements of the Company, enforceable against the
Company in accordance with their terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally or to general principles of
equity.

              (b)     Without limiting the generality of the foregoing, the
Company Board has unanimously (i) approved and declared advisable this
Agreement, the Merger and the other transactions contemplated hereby, (ii)
resolved to recommend approval and adoption of this Agreement, the Merger and
the other transactions contemplated hereby by the Company's stockholders and
(iii) has not withdrawn or modified such approval or resolution to recommend.

                                       9
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                                  CONFIDENTIAL

              Section 2.4.    FINANCIAL STATEMENTS. The Company has delivered to
Parent copies of financial statements (hereinafter collectively called the
"Financial Statements"), which have been prepared in accordance with generally
accepted accounting principles consistently applied and maintained throughout
the periods indicated and fairly present the financial condition of the Company
as at their respective dates and the results of its operations for the periods
covered thereby (subject to normal year-end adjustments and except that any
unaudited financial statements do not contain all required footnotes) as
follows: consolidated balance sheets of the Company at August 31, 1999 and
September 30, 1997 and 1998, and the related statements of earnings for the
eleven (11) months ended August 31, 1999, the five (5) months ended September
30, 1997, and the fiscal year ended September 30, 1998. The balance sheet of the
Company at August 31, 1999 is referred to herein as the "Company Balance Sheet."
Such statements of earnings do not contain any items of special or nonrecurring
income or any other income not earned in the ordinary course of business except
as expressly specified therein, and such interim financial statements include
all adjustments, which consist only of normal recurring accruals, necessary for
a fair presentation. Except as set forth in Section 2.4 of the Company
Disclosure Schedule, all receivables identified in the Company Balance Sheet are
collectible in full in the ordinary course of business, consistent with past
practice, subject to any reserve therefor set forth on the Company Balance
Sheet. Except as set forth in Schedule 2.4 of the Company Disclosure Schedule,
all inventories of raw materials, work-in-process and finished goods set forth
and reflected in the Company Balance Sheet, as well as any inventory the Company
has directed any of its manufacturing subcontractors to procure and manufacture
on the Company's behalf, were acquired in the ordinary course of business
consistent with past practice. Except as set forth in Schedule 2.4 of the
Company Disclosure Schedule, all such inventories consist of a quality and
quantity usable and saleable (free of any material defect or deficiency) in the
ordinary course of business, consistent with past practice, except for
slow-moving, damaged or obsolete items and materials of below standard quality,
all of which have been written down to net realizable value or in respect of
which adequate reserves have been provided, in each case as fully reflected in
the Company Balance Sheet.

              Section 2.5.    CONSENTS AND APPROVALS, NO VIOLATIONS. Except for
the filing of the Certificate of Merger as required by the DGCL and, if
applicable, compliance with the HSR Act (as hereinafter defined), no filing with
or notice to and no permit, authorization, consent or approval of any United
States (federal, state or local) or foreign court or tribunal, or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by the
Company of this Agreement or the consummation by the Company of the Merger or
the other transactions contemplated hereby. Neither the execution, delivery and
performance of this Agreement by the Company nor the consummation by the Company
of the transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the Company's Certificate of Incorporation or bylaws
(or similar governing documents), (ii) except as set forth in Section 2.5 of the
Company Disclosure Schedule, result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration or Lien) or
require the consent of the other party(ies) thereto under any of the terms,
conditions or provisions of any note, bond, mortgage,

                                       10

<PAGE>

                                  CONFIDENTIAL

indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company is a party or by which it or any of its properties or
assets may be bound or (iii) except as set forth in Section 2.5 of the Company
Disclosure Schedule, violate any order, writ, injunction,. decree, law, statute,
rule or regulation applicable to the Company or any of its properties or assets.

              Section 2.6.    NO DEFAULT. Except as set forth in Section 2.6 of
the Company Disclosure Schedule, the Company is not in breach, default or
violation (and no event has occurred that with notice or the lapse of time or
both would constitute a breach, default or violation) of any term, condition or
provision of (i) its Certificate of Incorporation or bylaws (or similar
governing documents), (ii) any note, bond, mortgage, indenture, lease, license,
contract (including any Supply Contract), agreement or other instrument or
obligation to which the Company is now a party or by which it or any of its
properties or assets may be bound or (iii) any order, writ, injunction, decree,
law, statute, rule or regulation applicable to the company or any of its
properties or assets.

              Section 2.7.    NO UNDISCLOSED LIABILITIES, ABSENCE OF CHANGES.
Except as set forth in Section 2.7 of the Company Disclosure schedule or the
Company Balance Sheet, the Company does not have any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, that would be
required by generally accepted accounting principles to be reflected on a
consolidated balance sheet of the Company (including the notes thereto). Except
as set forth in Section 2.7 of the Company Disclosure Schedule, since the
Company Balance Sheet Date, there have been no events or changes with respect to
the Company that, individually or in the aggregate, have had or reasonably would
be expected to have a Material Adverse Effect on the Company. Without limiting
the generality of the foregoing, except as set forth in Section 2.7 of the
Company Disclosure Schedule, since the Company Balance Sheet Date, the Company
has conducted its business only in, and has not engaged in any transaction other
than according to, the ordinary and usual course of such businesses consistent
with past practices, and there has not been any (i) damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company, whether or not covered by insurance; (ii)
declaration, setting aside or payment of any dividend or other distribution in
respect of the capital stock of the Company or any repurchase, redemption or
other acquisition by the Company of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company; (iii)
amendment of any term. of any outstanding security of the Company; (iv)
incurrence, assumption or guarantee by the Company of any indebtedness for
borrowed money in excess of Fifty Thousand Dollars ($50,000); (v) creation or
assumption by the Company of any Lien on any asset other than in the ordinary
course. of business consistent with past practices; (vi) loan, advance or
capital contributions made by the Company, or investment in, any person; (vii)
transaction or commitment made, or any contract or agreement entered into, by
the Company relating to its assets or business (including the acquisition (by
sale, license or otherwise) or disposition (by sale, license or otherwise) of
any assets) or any relinquishment by the Company of any contract, agreement or
other right where the consideration or other value involved therein exceeded
Fifty Thousand Dollars ($50,000) or where such transaction, commitment,
contract, agreement or other right was material; (viii) labor dispute, other
than

                                       11

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                                  CONFIDENTIAL

routine individual grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees; (x) any exclusive license, distribution, marketing,
sales or other agreement entered into or any agreement to enter into any
exclusive license, distribution, marketing, sales or other agreement; or (xi)
change by the Company in its accounting principles, practices or methods. Since
the Company Balance Sheet Date, there has not been (a) any increase in the
compensation payable or that could become payable by the Company to any officers
of the Company or (b) increases in the compensation payable to employees of the
Company that exceed in the aggregate Fifty Thousand Dollars ($50,000) for all
employees or Ten Thousand Dollars ($10,000) for any single employee,

              Section 18.     LITIGATION. Except as set forth in Section 2.8 of
the Company Disclosure Schedule, there is no suit, claim, action, arbitration,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its properties or assets before any
Governmental Entity or brought by any person. The Company is not subject to any
outstanding order, writ, injunction or decree.

              Section 2.9.     COMPLIANCE WITH APPLICABLE LAW. The Company holds
all permits, licenses, variances;, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Company Permits"). The Company is in compliance with the terms
of the Company Permits. The businesses of the Company have been and are being
conducted in compliance with all Applicable Laws. No investigation or review by
any Governmental Entity with respect to the Company is pending or, to the
Company's knowledge, threatened, nor has any Governmental Entity indicated an
intention to conduct the same.

              Section 2.10.   EMPLOYEE BENEFITS.

              (a)     For purposes of this Agreement, "Compensation and Benefit
Plans" means, collectively, each written bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health, or the other plan, agreement, policy
or arrangement, that covers employees or directors of the Company, or pursuant
to which former employees or directors of the Company are entitled to current or
future benefits. Excepts as otherwise provided in Section 2.10(a) of the
Company Disclosure Schedule, there are no oral Compensation and Benefit Plans to
which the Company is a party. The Company has made available to Parent copies of
all "employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
referred to herein as "Pension Plans,"), "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA) and all other Compensation and Benefit Plans
maintained, or contributed to, by the Company or any person or entity that,
together with the Company, is treated as a single employer under Section 414(b),
(c),(m) or (o) of the Code (the Company and each such other person or entity, a
"Commonly Controlled Entity") for the benefit of any current employees, of
officers or

                                       12
<PAGE>

                                  CONFIDENTIAL

directors of the Company. The Company has also made available to Parent true,
complete and correct copies of (1) the most recent annual report on Form 5500
filed with the Internal Revenue Service ("IRS") with respect to each
Compensation and Benefit Plan (if any such report was required), (2) the most
recent summary plan description for each Compensation and Benefit Plan for which
such summary plan description is required and (3) each trust agreement and group
annuity contract related to any Compensation and Benefit Plan. Each Compensation
and Benefit Plan has been administered in accordance with its terms.

              (b)     Except as otherwise provided in Section 2.10(b) of the
Company Disclosure Schedule, the Company has performed its obligations under
each Compensation and Benefit Plan; each Compensation and Benefit Plan and each
trust or other funding medium, if any, established in connection therewith has
at all times been established, maintained and operated in compliance with its
terms and the requirements prescribed by Applicable Law, including ERISA and the
code.

              (c)     With respect to those Pension Plans that are intended to
be qualified under Section 401(a) of the Code, either (1) such Pension Plans
have been the subject of determination letters from the IRS to the effect that
such Pension Plans are qualified and exempt from federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, and no such determination
letter has been revoked nor has any event occurred since the date of its most
recent determination letter or application therefor that would adversely affect
its qualification or increase its costs, (2) timely applications for such
determination letters are now pending and the Company is not aware of any reason
why such Pension Plan is not so qualified, or (3) the time provided under
Section 401(b) of the Code and regulations or IRS pronouncements thereunder for
making retroactive amendments relating back to the effective dates of such
Pension Plans will not expire before the date that is ninety (90) days after the
Effective Time.

              (d)     Except as otherwise provided in Section 2.10(d) of the
Company Disclosure Schedule, with respect to each Pension Plan currently or
formerly maintained by the Company or any entity that is under "common control"
with the Company (within the meaning of Section 4001 of ERISA) that is
subject to Title IV of ERISA the Company has not incurred, nor does it
reasonably expect to incur, any liability to the Pension Plan or to the Pension
Benefit Guaranty Corporation ("PBGC") in connection with any Pension Plan,
including, without limitation, any liability under Section 4069 of ERISA or any
penalty imposed under Section 4071 of ERISA, or ceased operations at any
facility or withdrawn from any Pension Plan in a manner which could subject it
to liability under Section 4062, 4063 or 4064 of ERISA, or knows of any facts or
circumstances that might give rise to any liability of the Company to the
Pension Plan or to the PBGC under Title IV of ERISA that could reasonably be
anticipated to result in any claims being made against Parent or the Company by
the PBGC subsequent to the Closing Date.

              (e)     At all times on and after the effective date of ERMA
neither Company nor any entity that is under "common control" with the Company
(within the mea meaning of

                                       13

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                                  CONFIDENTIAL

Section 4001 of ERISA) has maintained, contributed to or otherwise had any
obligation with respect to any "multiemployer plan" (as defined in Section 3(37)
of ERISA).

              (f)     Except as disclosed in Section 2.10(f) of the Company
Disclosure Schedule, there are no suits, actions, disputes, claims (other than
routine claims for benefits), arbitrations, administrative or other proceedings
pending or, to the knowledge of Company, threatened, anticipated or expected to
be asserted with respect to any Compensation and Benefits Plan or any related
trust or other funding medium thereunder or with respect to Company, as the
sponsor or fiduciary thereof or with respect to any other fiduciary thereof.

              (g)     No Compensation and Benefit Plan maintained by Company or
any related trust or other funding medium thereunder or any fiduciary thereof
is, to the knowledge of Company, the subject of an audit, investigation or
examination by an governmental or quasi-governmental agency.

              (h)     Except as provided in Section 2.10(h) of the Company
Disclosure Schedule,(1) no "reportable event" (as such term is used in Section
4043 of ERISA), "accumulated funding deficiency" (as such terms is used in
Section 412 or 4971 of the Code or Section 302 of ERISA), application for or
receipt of a waiver from the IRS of any minimum funding requirement under
Section 412 of the Code or "prohibited transaction" (as such term is used in
Section 4975 of the Code and/or Section 406 of ERISA and other than a
transaction that is exempt under a statutory or administrative exemption), has
occurred with respect to any Compensation and Benefit Plan established or
maintained by Company primarily for the benefit of participants employed within
the United States that could result in liability to the Company; (2) the Company
does not have any commitment, intention or understanding to create, terminate or
adopt any Compensation and Benefit Plan that would result in any additional
liability to Parent or the Company; and (3) since the beginning of the current
fiscal year of any Compensation and Benefit Plan, no event had occurred and no
condition or circumstance has existed that reasonably would be expected to
result in an increase in the benefits under or the expense of maintaining such
Compensation and Benefit Plan maintained by Company from the level of benefits
or expense incurred for the most recently completed fiscal year of such
Compensation and Benefit Plan.

              (i)     All contributions required to be made under the terms of
any Compensation and Benefit Plan as of the date hereof have been timely made.

              (j)      Except as provided by this Agreement or in Section
2.10(j) of the Company Disclosure Schedule, the execution of, and performance of
the transactions contemplated by, this Agreement will not (either along with or
upon the occurrence of any additional or subsequent events) constitute an event
under any Compensation and Benefit Plan or agreement that will or may reasonably
be expected to result in any payment (whether severance pay or otherwise),
acceleration, vesting or increase in benefits with respect to any employee,
former employee or director of the Company, whether or not any such payment
would be an "excess parachute payment" (within the meaning of Section 28OG of
the Code).

                                       14
<PAGE>

                                  CONFIDENTIAL

              (k)     The Company is not required to maintain or contribute to
any Compensation and Benefit Plan by the law or applicable custom or rule of any
jurisdiction outside of the United States.

              (l)      Each Compensation and Benefit Plan complies with all
applicable requirements of (i) the Age Discrimination in Employment Act of 1967,
as amended, and the regulations thereunder and (ii) Title VII of the Civil
Rights Act of 1964, as amended, and the regulations thereunder and all other
Applicable Laws. All amendments and actions required to bring each of the
Compensation and Benefit Plans into conformity with all of the applicable
provisions of ERISA and other Applicable Laws have been made or taken except to
the extent that such amendments or actions are not required by law to be made or
taken until a date after the Effective Time and are disclosed in Section 2.
10(l) of the Company Disclosure Schedule.

              (m)     Each group medical plan sponsored by the Company complies
with the Medicare Secondary Payor Provisions of Section 1826(b) of the Social
Security Act, and the regulations promulgated thereunder.

              (n)     The Company is not and does not expect to be, subject to
(1) a security interest pursuant to Section 412(f) of the Code or (2) a lien
pursuant to Section 412(n) of the Code or Section 4068 or 302(f) of ERISA.

              (o)     Except as set forth in Section 2.10(o) of the Company
Disclosure Schedule, Parent and the Company may terminate any Compensation and
Benefit Plan maintained by the Company or may cease contributions to any such
Compensation and Benefit Plans without incurring any liability other than a
benefit liability accrued in accordance with the terms of such Compensation and
Benefit Plan immediately prior to such termination or ceasing of contributions.

              (p)     The Company does not maintain any Compensation and Benefit
Plan which is a "group health plan" (as such term is defined in Section
5000(b)(1) of the Code) that has not been administered and operated in all
respects in compliance with the applicable requirements of Section 601 of ERISA
and Section 498OB(b) of the Code, and the Company is not subject to any
liability, including without limitation, additional contributions, fines,
penalties or loss of tax deduction as a result of such administration and
operation.

              (q)     The Company has not incurred, nor does the Company
reasonably expect to incur, any liability for any tax imposed under Sections
4971 through 4980B of the Code or civil liability under Section 501 (i) or (1)
of ERISA.

              (r)     The Company has not incurred any liability for any tax,
excise tax, penalty or fee with respect to any Compensation and Benefit Plan,
including, but not limited to, taxes arising under Section 4971, 4977, 4978,
4878B, 4979, 4980 or 4980B of the Code, and no event has occurred and no
circumstance has existed that reasonably would be expected to give rise to any
such liability.

                                       15
<PAGE>

                                  CONFIDENTIAL

              (s)     Except as provided in Section 2.10(s) of the Company
Disclosure Schedule, no insurance policy nor any other contract or agreement
affecting any Compensation and Benefit Plan requires or permits a retroactive
increase in premiums or payments due thereunder.

              Section 2.11.   LABOR AND EMPLOYMENT MATTERS. Except as set forth
on Section 2.11 of the Company Disclosure Schedule:

              (a)     No collective bargaining agreement exists that is binding
on the Company, and to the Company's knowledge, no petition has been filed or
proceeding instituted, or any action taken in contemplation of any such filing
or institution, by an employee or group of employees of the Company, with the
National Labor Relations Board seeking recognition of a bargaining
representative.

              (b)     (i)     To the Company's knowledge, there is no labor
strike, dispute, slow down or stoppage pending or threatened against the
Company; and

                      (ii)    The Company has not received any demand letters,
civil rights charges, suits or drafts of suits with respect to claims made by
any of its employees.

              (c)     All individuals who are or were performing consulting or
other services for the Company are or were correctly classified by the Company
as either "independent contractors" or "employees" as the case may be, and, at
the Closing Date, will qualify for such classification.

              (d)     Section 2.11 of the Company Disclosure Schedule contains a
list of the name of each officer, employee and consultant of the Company,
together with such person's position or function, annual base salary or wages
and any incentives or bonus arrangement with respect to such person. As of the
date hereof, to the Company's knowledge, no such person will or may cease to be
engaged by the Company for any reason, including because of the consummation of
the transactions contemplated by this Agreement.

              (e)     The Company is in compliance with all applicable foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and hours, in
each case, with respect to employees.

              (f)     The Company has withheld and reported all amounts required
by law or by agreement to be withheld and reported with respect to wages,
salaries and other payments to employees.

              (g)     There are no pending or, to the knowledge of the Company,
threatened claims or actions against the Company under any worker's
compensation policy or long-term disability policy.

                                       16
<PAGE>

                                  CONFIDENTIAL

              Section 2.12.   ENVIRONMENTAL LAWS AND REGULATIONS.

              (a)     The term "Environmental Laws" means any applicable
federal, state, local or foreign law, statute, treaty, ordinance, rule,
regulation, policy, permit, consent, approval, license, judgment, order, decree
or injunction relating to: (a) "Releases" (as defined in 42 U.S.C. sec.
9601(22)) or threatened Releases of Hazardous Material (as hereinafter defined)
into the environment, (b) the generation, treatment, storage, disposal, use,
handling, manufacturing, transportation or shipment of Hazardous Material, (c)
the health or safety of employees in the workplace, (d) protecting or restoring
natural resources or (e) the environment. The term "Hazardous Material" means
(i) hazardous substances (as defined in 42 U.S.C. sec. 9601(14)), including
"hazardous waste" as defined in 42 U.S.C. sec. 6903, (ii) petroleum, including
crude oil and any fractions thereof, (iii) natural gas, synthetic gas and any
mixtures thereof, (iv) asbestos and/or asbestos containing materials, (v) PCBs
or materials containing PCBs, (vi) any material regulated as a medical waste,
(vii) lead containing paint, (viii) radioactive materials and (ix) "Hazardous
Substance"" or "Hazardous Material" as those terms are defined in any
indemnification provision in any contract, lease, or agreement to which the
Company is a party.

              (b)      During the period of ownership or operation by the
Company of any of its current or previously owned or leased properties, there
have been no Releases of Hazardous Material by the Company in, on, under or
affecting such properties or any surrounding site, and the Company has not
disposed of any Hazardous Material in a manner that has led, or could reasonably
be anticipated to lead to a Release. There have been no Releases of Hazardous
Material by the Company in, on, under or affecting their current or previously
owned or leased properties or any surrounding site at times outside of such
periods of ownership, operation or lease. Since January 1, 1996, the Company has
not received any written notice of, or entered into any order, settlement or
decree relating to: (i) any violation of any Environmental Laws or the
institution or pendency of any suit, action, claim, proceeding or investigation
by any Governmental Entity or any third party in connection with any alleged
violation of Environmental Laws or (ii) the response to or remediation of
Hazardous Material at or arising from any of the Company's properties. There
have been no violations of any Environmental Laws by the Company.

              (c)     There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions, omissions or plans
that constitute a violation by the Company of, or are reasonably likely to
prevent or interfere with the Company's future compliance with, any current or
past Environmental Laws.

              Section 2.13.   TAXES.

              (a)     DEFINITIONS. For purposes of this Agreement:

              (i) the term "Tax" (including "Taxes") means (A) all federal,
state, local, foreign and other net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits,

                                       17
<PAGE>

                                  CONFIDENTIAL

customs, duties or other taxes, fees, assessment or charges of any kind
whatsoever, whether disputed or not, together with any interest and any
penalties, additions to tax or additional amounts with respect thereto, (B) any
liability for payment of amounts described in clause (A) whether as a result of
transferee liability, of being a member of an affiliated, consolidated, combined
or unitary group for any period, or otherwise through operation of law, and (C)
any liability for the payment of amounts described in clauses (A) or (B) as a
result of any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to indemnify any other person; and

                      (ii)    the term "Tax Return" means any return,
declaration, report, statement, information statement and other document filed
or required to be filed with respect to Taxes.

              (b)     Except as set forth in Section 2.13(b) of the Company
Disclosure Schedule, the Company has duly and timely filed all material Tax
Returns required to be filed; and such Tax Realms are complete and accurate and
correctly reflect the Tax liability required to be reported thereon. Such Tax
Returns do not contain a disclosure statement under Section 6662 of the Code (or
any predecessor provision or comparable provision of state, local or foreign
law).

              (c)     Except as set forth in Section 2.13(c) of the Company
Disclosure Schedule, the Company has paid or adequately provided in the
Financial Statements for all material Taxes (whether or not shown on any Tax
Return) accrued through the date of such Financial Statements; all Taxes the
Company accrued following the end of the most recent period covered by the
Financial Statements have been accrued in the ordinary course of business of the
Company, and have been paid when due in the ordinary course of business, and no
election has been made with respect to Taxes of the Company in any Tax Returns
that has not been provided to Parent.

              (d)     Except as set forth in Section 2.13(d) of the Company
Disclosure Schedule, no claim for assessment or collection of Taxes is presently
being asserted against the Company, and the Company is not a party to any
action, proceeding, or investigation by any governmental taxing authority nor
does the Company have knowledge of any such threatened action, proceeding or
investigation.

              (e)     Except as set forth in Section 2.13(e) of the Company
Disclosure Schedule, the Company is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, individually or in the
aggregate, in connection with this Agreement or any change of control of the
Company, in the payment of any "excess parachute payments" within the meaning of
Section 280G of the Code.

              (f)     Except as set forth in Section 2.13(f) of the Company
Disclosure Schedule, the Company is not a party to or bound by any obligation
under any Tax sharing, Tax allocation, Tax indemnity or similar agreement or
arrangement.

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<PAGE>

                                  CONFIDENTIAL

              (g)     Except as set forth in Section 2.13(g) of the Company
Disclosure Schedule, there is currently no limitation on the utilization of net
operating losses, built in losses, tax credits or similar items of the Company
under Section 382, 383, 384 or 1502 of the Code and the Treasury Regulations
thereunder.

              (h)     Except as set forth in Section 2.13(h) of the Company
Disclosure Schedule, the Company has not agreed to, or is required to make, any
adjustment under Section 481 of the Code by reason of a change in accounting
method.

              (i)     The Company is not a "consenting corporation" within the
meaning of Section 341(f)(1) of the Code.

              Section 2.14.   INTELLECTUAL PROPERTY.

              (a)     GENERALLY. Section 2.14(a) of the Company Disclosure
Schedule sets forth, for the Intellectual Property owned, in whole or in part,
including jointly with others (such schedule specifies if such Intellectual
Property is owned jointly), by the Company, a complete and accurate list of all
United States and foreign (a) patents and patent applications; (b) Trademark
registrations and applications and unregistered Trademarks; and (c) copyright
registrations and applications, indicating for each, the applicable
jurisdiction, registration number (or application number) and date issued (or
date filed). For purposes of this Agreement, "Intellectual Property" means:
trademarks and service marks (whether registered or unregistered), trade names,
designs and general intangibles of like nature, together with all goodwill
related to the foregoing (collectively, "Trademarks"); patents and patent
applications (including any continuations, continuations-in-part, divisionals,
reissues, renewals and applications for any of the foregoing) (collectively
"Patents"); copyrights and mask works (including any registrations and
applications therefor and whether registered or unregistered) (collectively
"Copyrights"); and information, including a formula, pattern, compilation,
program, device, method, technique, or process, that: (1) derives independent
economic value, actual or potential, from not being generally known to the
public or to other persons who can obtain economic value from its disclosure or
use; and (2) is the subject of efforts to maintain its secrecy (collectively,
"Trade Secrets"). "Trade Secrets" include computer software; databases; works of
authorship; mask works; technology; trade secrets and other confidential
information, know-how, proprietary processes, formulae, algorithms, models, user
interfaces, customer lists, inventions, discoveries, concepts, ideas,
techniques, methods, source codes, object codes, methodologies and, with respect
to all of the foregoing, related confidential data or information.

              (b)     TRADEMARKS

                      (i)     Except as described on Section 2.14(b)(i) of the
Company Disclosure Schedule, all Trademarks are currently in compliance with all
legal requirements (including the timely post-registration filing of affidavits
of use and incontestability and renewal applications) other than any requirement
that, if not satisfied, would not result in a cancellation of any such
registration or otherwise affect the priority and enforceability of the
Trademark in questions.

                                       19

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                                  CONFIDENTIAL

                      (ii)    No registered Trademark has been within the last
three (3) years or is now involved in any opposition or cancellation proceeding
in the United States Patent and Trademark Office. To the Company's knowledge, no
such action has been threatened in writing within the one (I)-year period prior
to the date of this Agreement.

                      (iii)   To the Company's knowledge, after reasonable
inquiry, there has been no prior use of any Trademark by any third party that
confers upon said third party superior rights in any such Trademark.

                      (iv)    The Trademarks registered in the United States
have been continuously used in the form appearing in, and in connection with the
goods and services listed in, their respective registration certificates or
renewal certificates, as the case may be.

              (c)     PATENTS.

                      (i)     All Patents are currently in compliance with
legal requirements (including payment of filing, examination, and maintenance
fees and proofs of working or use) other than any requirement that, if not
satisfied, would not result in a revocation or lapse or otherwise affect the
enforceability of the Patent in question.

                      (ii)     No Patent has been or is now involved in any
interference, reissue, reexamination or opposing proceeding in the United States
Patent and Trademark Office or any foreign patent office. To the Company's
knowledge, no such action has been threatened in writing within the one (1)-year
period prior to the date of this Agreement.

                      (iii)   There is no Patent of any person that claims
the same subject matter as any Patent of the Company or invalidates any claim of
any Patent of the Company.

              (d)     TRADE SECRETS.

                      (i)     The Company has taken all reasonable steps in
accordance with normal industry practice to protect its rights in confidential
information and its Trade Secrets.

                      (ii)    Without limiting the generality of Section
2.14(d)(i), the Company enforces a policy of requiring each relevant employee,
consultant and contractor to execute proprietary information, confidentiality
and assignment agreements substantially in the Company's standard forms that
assign to the Company all rights to any Intellectual Property rights relating to
the Company's business that are developed by the employee, consultant or
contractor, as applicable, and that otherwise appropriately protect the
Intellectual Property of the Company, and, except under confidentiality
obligations, there has been no disclosure by the Company of confidential
information or Trade Secrets.

              (e)     LICENSE AGREEMENTS.

                      Section 2.14(e)(1) of the Company Disclosure Schedule sets
forth a complete and accurate list of all license agreements granting to the
Company any right to use

                                       20

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                                  CONFIDENTIAL

or practice any rights under any Intellectual Property other than software
commercially available on reasonable terms to any person for
a license fee of no more than Twenty-Five Thousand Dollars ($25,000) but
including all such agreements that are otherwise material to the Company
(collectively, the "Inbound License Agreements"), indicating for each the title
and the parties thereto. Section 2.14(e)(2) of the Company Disclosure Schedule
sets forth a complete and accurate list of all license agreements under which
the Company grants licenses of software or grants other rights in or to use or
practice any rights under any intellectual Property, excluding licenses with
customers that in the twelve-month period prior to the date hereof have
purchased or licensed products for which the total payments to the Company did
not exceed Fifty Thousand Dollars ($50,000) and are not otherwise material to
the Company (collectively, the "Outbound License Agreements"), indicating for
each the title and the parties thereto. There is no outstanding or, to the
Company's knowledge, threatened dispute or disagreement with respect to any
Inbound License Agreement or any Outbound License Agreement.

              (f)     OWNERSHIP: SUFFICIENCY OF INTELLECTUAL PROPERTY ASSETS.
The Company owns or possesses adequate licenses or other rights to use, free
and clear of Liens, orders and arbitration awards, all of its Intellectual
Property used in its business. The Intellectual Property identified in
Section 2.14(a) of the Company Disclosure Schedule, together with Trade
Secrets and the Company's unregistered copyrights and the rights granted to
the Company under the Inbound License Agreements, constitute all the
Intellectual Property rights and Inbound License Agreements used in the
operation of the Company's business as it is currently conducted and are all
such Intellectual Property rights and Inbound License Agreements necessary to
operate such business after the Effective Time in substantially the same
manner as such business have been operated by the Company prior thereto.

              (g)     PROTECTION OF INTELLECTUAL PROPERTY. The Company has taken
commercially reasonable steps in accordance with normal industry practice to
protect the Intellectual Property of the Company.

              (h)     NO INFRINGEMENT BY THE COMPANY. The products used,
manufactured, marketed, sold or licensed by the Company, and all Intellectual
Property used in the conduct of the Company's business as currently conducted,
do not infringe upon, violate or constitute the unauthorized use of any rights
owned or controlled by any third party, including any Intellectual Property of
any third party.

              (i)     NO PENDING OR THREATENED INFRINGEMENT CLAIMS. No
litigation is now or, within the three (3) years prior to the date of this
Agreement, was pending and no notice or other claim in writing has been received
by the Company within the one (1) year prior to the date of this Agreement, (A)
alleging that the Company has engaged in any activity or conduct that infringes
upon, violates or constitutes the unauthorized use of the Intellectual Property
rights of any third party or (B) challenging the ownership, use, validity or
enforceability of any Intellectual Property owned or exclusively licensed by or
to the Company. Except as specifically disclosed in one or more Sections of the
Company Disclosure Schedule pursuant to this Section 2.14, no Intellectual
Property that is owned or licensed by the Company is

                                       21
<PAGE>

                                  CONFIDENTIAL

subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof by the Company or, in the case of Intellectual
Property licensed by the Company to others, restricting the sale, transfer,
assignment or licensing thereof by the Company to any person.

              (j)     NO INFRINGEMENT BY THIRD PARTIES. Except as set forth in
Section 2.14(j) of the Company Disclosure Schedule, to the knowledge of the
Company, no third party is misappropriating, infringing, diluting or violating
any Intellectual Property owned or exclusively licensed by the Company, and no
such claims have been brought against any third party by the Company.

              (k)     ASSIGNMENT CHANGE OF CONTROL. Except as set forth in
Section 2.14(k) of the Company Disclosure Schedule, the execution, delivery and
performance by the Company of this agreement, and the consummation of the
transactions contemplated hereby, will not result in the loss or impairment of,
or give rise to any right of any third party to terminate, any of the Company's
rights to own any of its Intellectual Property or rights under any Inbound
License Agreement or Outbound License Agreement, nor require the consent of any
Governmental Authority or third party in respect of any such Intellectual
Property.

              (l)     SOFTWARE. The Software owned or purported to be owned
by the Company, was either (i) developed by employees of the Company within
the scope of their employment; (ii) developed by independent contractors who
have assigned their rights to the Company pursuant to written agreements; or
(iii) otherwise acquired by the Company from a third party. Except as set
forth in Section 2.14(l) of the Company Disclosure Schedule, such Software
does not contain any programming code, documentation or other materials or
development environments that embody Intellectual Property rights of any
person other than the Company, except for such materials or development
environments obtained by the Company from other persons who make such
materials or development environments generally available to all interested
purchasers or end-users on standard commercial terms. For purposes of this
Section 2.14(l), "Software" means any and all (i) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (ii) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, schematics, flow-charts
and other work product used to design, plan, organize and develop any of the
foregoing, and (iv) all documentation, including user manuals and training
materials, relating to any of the foregoing.

              (m)     PERFORMANCE OF EXISTING SOFTWARE PRODUCTS. The Company's
existing and currently manufactured and marketed Software products listed and
described on Section 2.14(m) of the Company Disclosure Schedule perform, free of
material bugs, viruses or programming errors, the functions described in any
agreed specifications or end user documentation or other information provided to
customers of the Company on which such customers relied when licensing or
otherwise acquiring such products.

                                       22
<PAGE>

                                  CONFIDENTIAL

              (n)     DOCUMENTATION. The Company has taken all reasonable
actions customary in the software industry to document the Software and its
operation, such that the materials comprising the Software, including the source
code and documentation, have been written in a clear and professional manner so
that they may be understood, modified and maintained in an efficient manner by
reasonably competent programmers.

              (o)     YEAR 2000 COMPLIANCE.

                      (i)     Except as set forth in Section 2.14(o) of the
Company Disclosure Schedule, all of the Company's products (including products
currently under development) will record, store, process and calculate and
present calendar dates falling on and after December 31, 1998, and will
calculate any information dependent on or relating to such dates in the same
manner and with the same functionality, data integrity and performance as the
products record, store, process, calculate and present calendar dates on or
before December 31, 1998, or calculate any information dependent on or relating
to such dates (collectively "Year 2000 Compliant"). Except as set forth in
Section 2.14(o) of the Company Disclosure Schedule, all of the Company's
products will lose no significant functionality with respect to the introduction
of records containing dates falling on or after December 31, 1998 and are
otherwise Year 2000 Compliant. Except as set forth on Section 2.14(o) of the
Company Disclosure Schedule, the current versions of the Company's software and
all other Intellectual Property may be used prior to, during and after December
31, 1998, such that such Software and Intellectual Property will operate prior
to, during and after such time period without error caused by date data that
represents or references different centuries or more than one century.

                      (ii)    The Company's products and the conduct of the
Company's business with its customers and suppliers will not be adversely
affected by the advent of the year 2000, the advent of the twenty-first century
or the transition from the twentieth century through the year 2000 and into the
twenty-first century. Except as set forth on Section 2.14(o) of the Company
Disclosure Schedule, the Company is not reasonably likely to incur expenses
exceeding One Hundred Thousand Dollars ($100,000) in the aggregate arising from
or relating to the failure of any of its products (including all products sold
on or prior to the date hereof) as a result of the advent of the year 2000, the
advent of the twenty-first century or the transition from the twentieth century
through the year 2000.

              (p)     MANUFACTURING RELATIONSHIPS. Section 2.14(p) of the
Company Disclosure Schedule sets forth a complete and correct description of
each and every (1) foundry relationship, wafer and circuit board manufacturing
and fabricating agreement, understanding or commitment, (2) purchase, supply or
service agreement, understanding or commitment, whether written or oral, for
integrated circuit dies, circuit boards or devices used by or in connection with
the Company's business, in whole or in part, and (3) any other agreements or
contracts, whether written or oral, under which the Company obtains services or
products for use in producing the Company's finished products involving payments
over a twelve (12) month period in excess of Fifty Thousand Dollars ($50,000) or
which otherwise is material (collectively with (1) and (2) "Supply Contracts").
The Company has delivered to

                                       23
<PAGE>

                                  CONFIDENTIAL

Parent a correct and complete copy of each Supply Contract and provided a
written summary of each oral Supply Contract. There are no fees, penalties,
price uplifts, shortfall payments, bill backs or other amounts outstanding under
such Supply Contracts. The quantities available for purchase and the prices
required to be paid under each written Supply Contract described in clauses (1)
and (2) above are as stated in such Supply Contract or is summarized in Section
2.14(p) of the Company Disclosure Schedule. Each manufacturing or service site
that requires qualification under the terms of a Supply Contract is qualified,
and no unresolved differences with respect to product or process specifications
remains outstanding. All manufacturing or service terms and conditions are as
they appear to be on the face of the Supply Contracts. The Company has not
received any written or oral notice from the other party to any Supply Contract,
or from any other supplier to the Company, to the effect that such party will
not accept purchase orders from the Company on such terms, conditions and
quantities consistent with past practices. To the knowledge of the Company, no
condition exists that would permit a termination or a change of such Supply
Contracts by the other party under such Supply Contract. Section 2.14(p) of the
Company Disclosure Schedule sets forth correct manufacturing information since
July 30, 1999 regarding yields under the Supply Contracts.

              Section 2.15.   TITLE TO PERSONAL PROPERTY; LEASES; ABSENCE OF
                              LIENS.

              (a)     The Company owns no real property, nor has it ever owned
any real property. Section 2.15 of the Company Disclosure Schedule sets forth a
list of all real property currently leased by the Company, the name of the
lessor and the date of the lease and each amendment thereto. All such current
leases are in full force and effect, are valid and effective in accordance with
their respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) by the Company or, to the Company's knowledge,
by the other party to such lease. Complete and correct copies of such leases
have been delivered to Parent and Acquisition.

              (b)     The Company has good and valid title to, or, in the case
of leased properties and assets, valid leasehold interests in, all of its
properties and assets, tangible and intangible, real, personal and mixed, used
or held for use in its business, free and clear of any Liens.

              Section 2.16.   INSURANCE. Except as set forth in Section 2.16 of
the Company Disclosure Schedule, the Company maintains insurance policies (the
"Insurance Policies") against all risks of a character and in such amounts as
are customarily insured against by similarly situated companies in the same or
similar businesses. Each Insurance Policy is in full force and effect and is
valid, outstanding and enforceable, and all premiums due thereon have been paid
in full. Except as set forth in Section 2.16 of the Company Disclosure Schedule,
none of the Insurance Policies will terminate or lapse (or be affected in any
other adverse manner) by reason of the transactions contemplated by this
Agreement. The Company has complied with the material provisions of each
Insurance Policy under which it is the insured party. No insurer under any
Insurance Policy has canceled or generally

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                                  CONFIDENTIAL

disclaimed liability under any such policy or, to the Company's knowledge,
indicated any intent to do so or not to renew any such policy. All known claims
under the Insurance Policies have been filed by the Company in a timely fashion.

              Section 2.17.   CERTAIN BUSINESS PRACTICES. None of the Company,
or any directors, officers, agents or employees of the Company, has (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (iii) made any other unlawful payment.

              Section 2.18.   PRODUCT WARRANTIES. Section 2.18 of the Company
Disclosure Schedule sets forth complete and accurate copies of the written
warranties and guaranties by the Company currently in effect with respect to its
products. There have not been any deviations from such warranties and
guaranties, and neither the Company, nor any of its salesmen, employees,
distributors and agents is authorized to undertake obligations to any customer
or to other third parties in excess of such warranties or guaranties. The
Company has not made any oral warranty or guaranty with respect to its products
not described on such schedule.

              Section 2.19    MATERIAL CONTRACTS.

              (a)     Section 2.19 of the Company Disclosure Schedule sets forth
a list of all of the following written contracts, agreements, options, leases,
licenses, sales and purchase orders, warranties, commitments and other
instruments of any kind (each a "Contract") to which the Company is a party or
is otherwise bound (each a "Material Contract" and collectively the "Material
Contracts"): (i) each sales Contract relating to the Company's business pursuant
to which the dollar volume of sales exceeded Fifty Thousand Dollars ($50,000) in
the 12-month period ended September 30, 1998, or Fifty Thousand Dollars
($50,000) in the eleven-month period ended August 31, 1999; (ii) each Contract
that requires payment by or to the Company in respect of its business subsequent
to the date of this Agreement of more than Fifty Thousand Dollars ($50,000);
(iii) all Contracts in respect of the Company's business relating to, and
evidences of, indebtedness for borrowed money or the deferred purchase price of
property (whether incurred, assumed, guaranteed or secured by any asset); (iv)
all partnership, joint venture or other similar Contracts, arrangements or
agreements, directly affecting the Company's business or assets; and (v) all
other Contracts that are material to the Company.

              (b)     Each Material Contract is a legal, valid and binding
obligation of the Company and, to the knowledge of the Company, each other
Person who is a party thereto, enforceable against the Company and each such
Person in accordance with its terms, and neither the Company nor, to the
knowledge of the Company, any other party thereto is in default thereunder.

              Section 2.20.   SUPPLIERS AND CUSTOMERS. The documents and
information supplied by the Company to Parent or any of its representatives with
respect to relationships

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                                  CONFIDENTIAL

and volumes of business done with its significant suppliers and customers are
accurate and complete. During the last twelve (12) months, the Company has not
received notices of termination or written threats of termination from any of
the ten (10) largest suppliers or the twenty-five (25) largest customers of the
Company.

              Section 2.21.   VOTE REQUIRED. The approval of the holders of (i)
a majority of the outstanding shares of Company Common Stock, (ii) a majority of
the voting power of the Company Common Stock, Company Preferred A Stock and
Company Preferred B Stock voting together as a single class and (iii) sixty-six
and two-thirds percent (66-2/3%) of the outstanding shares of Company Preferred
A Stock and Company Preferred B Stock voting together as a single class, are the
only stockholder votes necessary to approve and adopt this Agreement and the
Merger.

              Section 2.22.   BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.

              Section 2.23.   REPRESENTATIONS COMPLETE. The representations or
warranties made by the Company in this Agreement, and any statements made in any
schedules or certificates required to be furnished by the Company pursuant to
this Agreement, do not contain, and will not contain at the Effective Time, any
untrue statement of a material fact, and do not omit, and will not omit at the
Effective Time, to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading.

                                    ARTICLE 3

                        REPRESENTATIONS AND WARRANTIES OF
                             PARENT AND ACQUISITION

              Parent and Acquisition hereby represent and warrant to the Company
as follows:

              Section 3.1.    ORGANIZATION. Each of Parent and Acquisition is
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being
conducted. Parent has heretofore made available to the Company accurate and
complete copies of the Certificates of Incorporation and bylaws, as currently
in full force and effect, of Parent and Acquisition.

              Section 3.2.    AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
Parent and Acquisition has all necessary corporate power and authority to
execute and deliver this Agreement and the Other Agreements, to perform its
obligations under this Agreement and the Other Agreements, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Other Agreements and the

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                                  CONFIDENTIAL

consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the boards of directors of Parent and Acquisition and
by Parent as the sole stockholder of Acquisition, and no other corporate
proceedings on the part of Parent or Acquisition are necessary to authorize this
Agreement and the Other Agreements or to consummate the transactions
contemplated hereby and thereby. Thiss Agreement and the Other Agreements have
been duly and validly executed and delivered by each of Parent and Acquisition
and constitute, assuming the due authorization, execution and delivery hereof by
the Company, valid, legal and binding agreements of each of Parent and
Acquisition, as applicable, enforceable against each of Parent and Acquisition,
as applicable, in accordance with their terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.

              Section 3.3.    CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
the filing of the Certificate of Merger as required by the DGCL and, if
applicable, compliance with the HSR Act, no filing with or notice to, and no
permit, authorization, consent or approval of any Governmental Entity is
necessary for the execution and delivery by Parent or Acquisition of this
Agreement or the consummation by Parent or Acquisition of the Merger or the
other transactions contemplated hereby. Neither the execution, delivery and
performance of this Agreement by Parent or Acquisition nor the consummation by
Parent or Acquisition of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or bylaws of Parent or Acquisition, (ii) result in a violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or Acquisition or any of Parent's other
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound or (iii) violate any order, writ, injunction,
decree, law, statute, rule or regulation applicable to Parent or Acquisition or
any of Parent's other subsidiaries or any of their respective properties or
assets.

              Section 3.4.    BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Acquisition.

              Section 3.5.    LITIGATION. There is no action, suit, proceeding,
claim, arbitration or investigation pending, or as to which Parent or
Acquisition has received any notice of assertion nor, to the Parent's or
Acquisition's knowledge, is there a threatened action, suit, proceeding, claim,
arbitration or investigation against Parent or Acquisition that in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement.

              Section 3.6.    INTERIM OPERATION OF ACQUISITION. Acquisition was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement, has

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                                  CONFIDENTIAL

engaged in no other business activities and has conducted its operations only as
contemplated by this Agreement.

                                    ARTICLE 4

                                    COVENANTS

              Section 4.1.    OPERATION OF BUSINESS PRIOR TO EFFECTIVE TIME.
Between the date hereof and the Effective Time, the Company will operate its
business in the ordinary course of business consistent with past practice and,
to the extent consistent therewith, with no less diligence and effort than would
be applied in the absence of this Agreement, use all commercially reasonable
efforts to seek to preserve intact its current business organizations, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers, distributors, lessors, creditors,
employees, contractors and others having business dealings with it with the
intention that its goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, except as
otherwise expressly provided in this Agreement, prior to the Effective Time:

              (a)     The Company shall not do any of the following without the
prior written consent of Parent:

                      (i)     amend its Certificate of Incorporation or bylaws
(or other similar governing instrument);

                      (ii)    except as set forth in the Company Disclosure
Schedule, authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other debt or equity securities or equity equivalents
(including any stock options or stock appreciation rights) except for (1) the
issuance and sale of Shares pursuant to Company Stock Options granted under the
Stock Option Plans prior to the date hereof or Company Warrants existing on the
date of this Agreement, (2) issuance of Company Common Stock upon any conversion
of Company Preferred A Stock or Company Preferred B Stock existing on the date
hereof and (3) grants of options that are expressly set forth in Section 4.1
(a) of the Company Disclosure Schedule;

                      (iii)   except as set forth in the Company Disclosure
Schedule, split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, make any
other actual, constructive or deemed distribution in respect of its capital
stock or otherwise make any payments to stockholders in their capacity as such,
or redeem or otherwise acquire any of its securities or any securities other
than shares repurchased from employees at their original cost;

                      (iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger) or otherwise permit the
corporate existence of the Company or the

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                                  CONFIDENTIAL

rights or franchises or any license, permit or authorization under which its
business operates to be suspended, lapsed or revoked;

                      (v)     create or form any subsidiary;

                      (vi)    (A) incur or assume any long-term or short-term
debt or issue any debt securities except for borrowings under existing lines of
credit in the ordinary course of business, or modify or agree to any amendment
of the terms of any of the foregoing; (B) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person; (C) make any loans, advances
or capital contributions to or investments in any other person (other than
customary loans or advances to employees in the ordinary course of business
consistent with past practice, not exceeding Twenty-Five Thousand Dollars
($25,000) in the aggregate); (D) pledge or otherwise encumber shares of capital
stock of the Company; or (E) mortgage or pledge any of its assets, tangible or
intangible, or create or suffer to exist any material Lien thereupon;

                      (vii)   except as may be required by Applicable Law,
or except as contemplated by Section 4.9(a) of this Agreement, enter into, adopt
or amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, health, life, or disability
insurance, dependent care, severance or other employee benefit plan agreement,
trust, fund or other arrangement for the benefit or welfare of any director,
officer or employee in any manner or increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including the granting of stock appreciation rights or performance units);

                      (viii)  except as set forth in the Company Disclosure
Schedule, hire additional employees of the Company, increase the compensation of
employees, or enter into employment agreements or contracts;

                      (ix)    (A) acquire, sell, lease, license, transfer or
otherwise dispose of any assets in any single transaction or series of related
transactions having a fair market value in excess of Fifty Thousand Dollars
($50,000) in the aggregate or that are otherwise material to the Company, other
than sales of its products and licenses of software (other than exclusive
licenses) in the ordinary course of business consistent with past practices, or
(B) enter into any exclusive license, distribution, marketing, sales or other
agreement;

                      (x)     except as may be required as a result of a
change in law or in generally accepted accounting principles, change any of the
accounting principles, practices or methods used by it;

                      (xi)    revalue any of its assets, including writing
down the value of inventory or writing-off notes or accounts receivable, other
than in the ordinary course of business or as a result of normal year end audit
adjustments;

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                                  CONFIDENTIAL

                      (xii)   (A) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership or other entity
or division thereof or any equity interest therein; (B) enter into any contract
or agreement that would be material to the Company, (C) amend, modify, waive or
terminate any right under any Material Contract in any way or any right under
any other Contract in any material way; (D) modify its standard Company
warranty terms for its products or amend or modify any product warranties in
effect as of the date hereof in any manner that is adverse to the Company; or
(E) authorize any new capital expenditure or expenditures that individually is
in excess of Fifty Thousand Dollars ($50,000) or in the aggregate are in excess
of One Hundred Thousand Dollars ($100,000);

                      (xiii)  make any tax election or settle or compromise any
income tax liability or permit any insurance policy naming it as a beneficiary
or loss payee to expire, or to be canceled or terminated, unless a comparable
insurance policy reasonably acceptable to Parent is obtained and in effect;

                      (xiv)   settle or compromise any pending or threatened
suit, action or claim that (A) relates to the transactions contemplated hereby
or (B) the settlement or compromise of which would be for more than Seventy-Five
Thousand Dollars ($75,000) in any single case, or One Hundred Thousand Dollars
($100,000) in the aggregate, or that would otherwise be material to the Company;

                      (xv)    enter into any settlement or compromise that
relates (A) to the Company's dispute with Jay Kunin regarding the Kunin
Repurchase (as defined in the Company Disclosure Schedule) or (B) to the
Company's dispute with Kenneth Liu regarding the termination of his employment
with the Company and the Liu Release (as defined in the Company Disclosure
Schedule);

                      (xvi)   make any payment to any stockholder, officer,
director or employee of the Company or any affiliate or relative of any of them
except for senior staff bonuses earned for the year ended September 30, 1999 and
payment for services rendered by any such person as an employee or independent
contractor of the Company in the ordinary course of business consistent with
past practice;

                      (xvii)  commence any software, hardware or other
technology development project or terminate any software, hardware or other
technology development project that is currently ongoing;

                      (xviii)  allow the Company's rights in the Intellectual
Property to be abandoned or otherwise lost;

                      (xix)   sell or license to any third party any
Intellectual Property other than non-exclusive licenses in the ordinary course
of business; and

                      (xx)    take or agree in writing or otherwise to take
any of the actions described in Sections 4.1(i) through 4.1(xix) (and it
shall use all reasonable efforts not to take

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                                  CONFIDENTIAL

any action that would make any of the representations or warranties of the
Company contained in this Agreement untrue or incorrect).

              (b)     The Company Shall:

                      (i)     maintain the assets and properties of the Company
in the ordinary course of business in the manner historically maintained by the
Company, reasonable wear and tear, damage by fire and other casualty excepted;

                      (ii)    promptly repair, restore or replace any assets or
properties of the Company in the ordinary course of business consistent with
past practice;

                      (iii)   upon any damage, destruction or loss to any of the
assets or properties of the Company, apply any and all insurance proceeds
received with respect thereto to the prompt repair, replacement and restoration
thereof;

                      (iv)    comply with all Applicable Laws;

                      (v)     subject to Section 4.1(a)(xiii), file all
foreign, federal, state and local Tax Returns required to be filed and make
timely payment of all applicable Taxes when due and pay the expenses of
preparation therefor (other than where the Company is disputing any such
obligation in good faith);

                      (vi)    comply with all Material Contracts and maintain
the effectiveness of all Company Permits;

                      (vii)   notify Parent of any action, event, condition or
circumstance, or group of actions, events, conditions or circumstances, relating
to the Company or any other Person that results in, or would reasonably be
expected to result in, a Material Adverse Effect on the Company;

                      (viii)  notify Parent in writing of the commencement of
any proceeding by or against the Company; and

                      (ix)    pay accounts payable and pursue collection of its
accounts receivable in the ordinary course of business, consistent with past
practices.

              Section 4.2.    NO SOLICITATION OR NEGOTIATION; NON-SOLICITATION
                              OF EMPLOYEES.

              (a)     Between the date hereof and the earlier of the termination
of this Agreement and the Closing Date, the Company will not (nor will the
Company permit any of the Company's officers, directors, employees, agents,
representatives or affiliates to) directly or indirectly, take any of the
following actions with any person other than Parent and Acquisition: (i)
solicit, initiate, entertain or encourage any proposals or offers from, or
conduct discussions with or engage in negotiations with any person relating to
any possible acquisition of the Company (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise), any material portion of its
capital stock or assets or any equity interest in

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<PAGE>

                                  CONFIDENTIAL

the Company; (ii) provide information with respect to it to any person, other
than Parent and Acquisition, relating to, or otherwise cooperate with,
facilitate or encourage any effort or attempt by any such person with regard to,
any possible acquisition of the Company (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise), any portion of its capital
stock or assets or any equity interest in the Company; or (iii) enter into any
agreement with any person providing for the possible acquisition of the Company
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise), any portion of its capital stock or assets or any equity interest in
the Company. In addition, the Company also agrees that, unless and until this
Agreement is terminated in accordance with its terms, it will not commence, be
involved in, or take any actions in furtherance of, the process of becoming a
public company through an initial public offering. Without limiting the
generality of the foregoing, the Company agrees that until this Agreement is so
terminated it will not, and will not permit any of its representatives to,
participate in the process of drafting any registration statement for filing
with the Securities and Exchange Commission in connection with an initial public
offering. The Company also agrees that until this Agreement is so terminated it
will not engage any investment bankers for an initial public offering or, to the
extent previously engaged, will suspend any activities with such bankers
intended to facilitate an initial public offering.

              (b)     Parent's Communication Product Group (the "Communication
Product Group") agrees that between the date hereof and ninety (90) days after
termination of this Agreement, it will not directly or indirectly solicit for
employment any employee of the Company who became known to the Communication
Product Group in connection with its consideration of the Merger; PROVIDED,
HOWEVER, that the Communication Product Group will be permitted to hire
employees of the Company (i) who are not engineers, directors or executives, or
(ii) who are contacted as a result of the Communication Product Group's use of
general newspaper advertisement and other general non-targeted recruitment
techniques in the ordinary course of business and consistent with past practices
as opposed to targeted solicitations of any one or more of the Company's
employees. In no event will this Section 4.2(b) apply to any division or
operation within Parent except for the Communication Product Group. This Section
4.2(b) shall terminate upon consummation of the Merger.

              Section 4.3.    ACCESS TO INFORMATION.

              (a)     Between the date hereof and the Effective Time, the
Company shall give Parent and its authorized representatives (including, without
limitation, its attorneys and accountants), upon reasonable notice from Parent,
reasonable access to all employees, plants, offices, warehouses and other
facilities, to (and where necessary, provide copies of) all books and records,
contracts and all personnel files of current employees of the Company as Parent
may reasonably require, and will cause its officers to furnish Parent with such
financial and operating data and other information with respect to the business
and properties of the Company as Parent may from time to time reasonably
request.

              (b)     Between the date hereof and the Effective Time, the
Company shall furnish to Parent and Acquisition (i) within five (5) business
days following preparation

                                       32
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                                  CONFIDENTIAL

thereof (and in any event within thirty (30) business days after the end of each
month) an unaudited balance sheet as of the end of such month and the related
statements of earnings, stockholders' equity (deficit) and cash flows for the
month then ended, and (ii) within five (5) business days following preparation
thereof (and in any event within forty-five (45) calendar days after the end of
each fiscal quarter) an unaudited balance sheet as of the end of such quarter
and the related statements of earnings, stockholders' equity (deficit) and cash
flows for the quarter then ended, and (iii) within five (5) business days
following preparation thereof (and in any event within ninety (90) calendar days
after the end of each fiscal year) an audited balance sheet as of the end of
such year and the related statements of earnings, stockholders' equity (deficit)
and cash flows, all of such financial statements referred to in clauses (i),
(it) and (iii) to be prepared in accordance with generally accepted accounting
principles in conformity with the practices consistently applied by the Company
with respect to such financial statements. All the foregoing shall be in
accordance with the books and records of THE Company and shall fairly present
its financial position (taking into account the differences between the monthly,
quarterly and annual financial statements prepared by the Company in conformity
with its past practices) as of the last day of the period then ended.

              (c)     Each of the parties hereto will hold, and will cause its
consultants and advisers to hold, in confidence all documents and information
furnished to it by or on behalf of another party to this Agreement in connection
with the transactions contemplated by this Agreement pursuant to the terms of
that certain Corporate Nondisclosure Agreement Number 123398 entered into
between the Company and Parent dated as of April 29, 1999 (the "CNDA").

              Section 4.4.    CERTAIN FILINGS; REASONABLE EFFORTS; MEETING OF
                              STOCKHOLDERS.

              (a)     Subject to the terms and conditions herein provided, each
of the parties hereto agrees to use all reasonable efforts to take or cause to
be taken all action and to do or cause to be done all things reasonably
necessary, proper or advisable under Applicable Law to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts to do the following, (i) if applicable, cooperate in the
preparation and filing of the Notification and Report forms under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any filings under similar merger notification laws or regulations of
foreign Governmental Entities; (ii) obtain consents of all third parties and
Governmental Entities necessary, proper, advisable or reasonably requested by
Parent or the Company, for the consummation of the transactions contemplated by
this Agreement; (iii) contest any legal proceeding relating to the Merger; and
(iv) execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby. The Company agrees to use all commercially
reasonable efforts to encourage its employees to accept any offers of employment
extended by Parent. If at any time after the Effective Time any further action
is necessary to carry out the purposes of this Agreement the proper officers and
directors of each party hereto shall take all such necessary action.

              (b)     Parent and the Company will consult and cooperate with one
another, and consider in good faith the views of one another, in connection with
any analyses,

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                                  CONFIDENTIAL

appearances, presentations, letters, white papers, memoranda, briefs, arguments,
opinions or proposals made or submitted by or on behalf of any party hereto in
connection with proceedings under or relating to any foreign, federal, or state
antitrust, competition, or fair trade law. In this regard but without
limitation, each party hereto shall promptly inform the other of any material
communication between such party and the Federal Trade Commission, the Antitrust
Division of the United States Department of Justice, or any other federal,
foreign or state antitrust or competition Governmental Entity regarding the
transactions contemplated herein.

              (c)     Nothing in this Agreement, however, shall require or be
construed to require any party hereto to sell or divest any assets or business
or to restrict any business operations in order to obtain the consent or
successful termination of any review of any such Governmental Entity regarding
the transactions contemplated hereby.

              (d)     The Company shall take all actions necessary in accordance
with the DGCL and its Certificate of Incorporation and bylaws to (i) duly call,
give notice of, convene and hold meetings of the holders of the Company Common
Stock, and the holders of the Company Preferred A Stock and Company Preferred B
Stock, as promptly as practicable to consider and vote upon the adoption and
approval of this Agreement and the transactions contemplated hereby (the
"Meeting") or (ii) obtain, as promptly as practicable, by written consent, the
adoption and approval of this Agreement and the transactions contemplated hereby
by the holders of (A) a majority of the voting power of the Company Common
Stock, (B) a majority of the voting power of the Company Common Stock, Company
Preferred A Stock and Company Preferred B Stock voting together as a single
class, and (C) sixty-six and two-thirds percent (66-2/3%) of the outstanding
shares of the Company Preferred A Stock and Company Preferred B Stock voting
together as a single class. The Company Board will recommend to its stockholders
approval of the Merger and the transactions contemplated by this Agreement. The
Company shall promptly prepare materials reasonably acceptable to Parent for
purposes of soliciting the votes of the holders of Shares approving the Merger,
which shall include the recommendation of the Company Board that stockholders of
the Company vote in favor of the approval and adoption of this Agreement, and
shall promptly mail such materials to the Company's stockholders after approval
by Parent.

              Section 4.5.    PUBLIC ANNOUNCEMENTS. Neither Parent, Acquisition
nor the Company shall issue any press release or otherwise make any public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, without the prior consent of Parent and Acquisition (in
the case of the Company) or the Company (in the case of Parent or Acquisition),
except as may be required by Applicable Law, or by the rules and regulations of,
or pursuant to any agreement with, the Nasdaq National Market. If any party
determines, with the advice of counsel, that it is required by Applicable Law to
make this Agreement or any terms thereof public, it shall, a reasonable time
before making any public disclosure, consult with the other parties regarding
such disclosure and seek confidential treatment for such terms or portions of
this Agreement as may be requested by the other parties. The parties agree there
shall be no public announcement of this Agreement or the consummation of the
Merger except as may be required by Applicable Law. The parties agree

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                                  CONFIDENTIAL

to announce this Agreement or the consummation of the Merger to the Company's
employees, customers, vendors and strategic partners at such time and in such
form as is mutually agreed upon by all parties to this Agreement.

              Section 4.6.    NOTIFICATION OF CERTAIN MATTERS. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to
the Company, of (i) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which has caused or would be likely to cause
any representation or warranty contained in this Agreement by such first
party to be untrue or inaccurate at or prior to the Effective Time and (ii)
any failure by such first party to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by it hereunder; PROVIDED, HOWEVER, that, except as provided in Section 4.7,
the delivery of any notice pursuant to this Section 4.6 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.

              Section 4.7.    ADDITIONS TO AND MODIFICATION OF COMPANY
DISCLOSURE SCHEDULE. Concurrently with the execution and delivery of this
Agreement, the Company has delivered a Company Disclosure Schedule that includes
all of the information required by the relevant provisions of this Agreement.
The Company represents and warrants that it has used reasonable good faith
efforts to prepare such Company Disclosure Schedule. In addition, the Company
shall deliver to Parent and Acquisition such additions to or modifications of
any Sections of the Company Disclosure Schedule necessary to make the
information set forth therein correct and complete as soon as practicable after
such information is available to the Company after the date of execution and
delivery of this Agreement (each, an "Addition" and collectively, "Additions").
Any such disclosure of an Addition shall not be deemed to constitute an
exception to its representations and warranties under Article 2, nor limit the
rights and remedies of Parent and Acquisition under this Agreement for any
breach by the Company of such representation and warranties; PROVIDED, HOWEVER,
that in the event that the Merger is consummated, no Parent Indemnitee shall
have any claim arising under Article 7 with respect to the breach of any
representation or warranty in Article 2 that any such Addition is identified as
being specifically related to, if (1) such Addition arises from facts AND
circumstances existing on the date hereof, or (2) such Addition arises from
facts and circumstances arising after the date hereof, so long as none of the
facts and circumstances arising after the date hereof giving rise to such
Addition constitutes or arises from a breach of any covenant of the Company in
this Agreement. Nothing set forth herein shall obligate Parent or Acquisition to
consummate the Merger in the event any such Addition or Additions causes any of
the conditions in Article 5 to fail to be satisfied.

              Section 4.8.    ACCESS TO COMPANY EMPLOYEES. The Company agrees to
provide Parent with reasonable access to its employees during normal working
hours following the date of this Agreement, to among other things, deliver
offers of continued employment (if Parent so elects) and to provide information
to such employees about Parent. All communications by Parent with Company
employees shall be conducted in a mariner that does not disrupt or interfere
with the Company's efficient and orderly operation of its business.

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                                  CONFIDENTIAL

              Section 4.9.    DEFERRED CONTRIBUTION PENSION PLANS.

              (a)     Prior to the Effective Time, the Company will take such
action as is necessary to terminate its 401(k) Plan (the "Company 401(k) Plan")
and also will take all necessary action to ensure that each Company employee is
fully vested in his or her account balance under the Company 401(k) Plan.

              (b)     As soon as practicable following IRS approval of the
termination of the Company 401(k) Plan, the assets thereof shall be distributed
and Parent shall permit the employees of the Company employed by the Surviving
Corporation to roll such distributions over into Parent's 401 (k)/Profit
Sharing Plan.

              Section 4.10.   SERVICE CREDIT; EMPLOYMENT.

              (a)     Company employees shall be given credit for service
performed for the Company ("Service Credit") for purposes of the following
Parent benefits:

                      (i)     401(k)/Profit Sharing Plan (participation and
vesting only, not benefit accrual);

                      (ii)    Vacation;

                      (iii)   Short Term Disability Plan;

                      (iv)    Service Awards,

                      (v)     Service component of any retirement definition
(early retirement, rule of 75);

                      (vi)    Defined Benefit Plan (participation and vesting
only); and

                      (vii)   Supplemental Employee Medical Account Plan
("SERMA") (participation only).

              (b)     Company employees shall not be given Service Credit for
the following Parent benefits:

                      (i)     Sabbatical;

                      (ii)    Parent Stock Option Plans (acceleration of vesting
upon retirement);

                      (iii)   Benefit accrual under Parent's Defined Benefit
Plan;

                      (iv)    Benefit accrual under Parent's SERMA; and

                      (v)     Benefit accrual under Parent's 401 (k)/Profit
Sharing Plan;

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                                  CONFIDENTIAL

With respect to the foregoing Parent benefits, Service Credit shall be counted
as of the Effective Time.

              (c)     Parent will cause the Surviving Corporation to continue
the employment of those employees employed by the Company prior to the Effective
Time on an "at will" basis at compensation to be substantially similar to
compensation received by similarly situated employees of Parent.

              (d)     (1) Employees of the Surviving Corporation will be
eligible for grants of options to purchase Parent Common Stock in the discretion
of Parent in accordance with Parent's regular compensation review, and will be
eligible to participate in Parent's employee stock purchase plan at the next
entry date following the Closing.

                      (2) In exchange for each individual described in Section
5.3(f) executing the written instrument referred to in such Section, Parent
would grant to such individual, on or promptly following the Closing, an option
to purchase shares of Parent Common Stock. The number of shares subject to such
option would be determined by Parent in its sole discretion. The exercise price
per share for each such grant shall be the fair market value of one share of
Parent Common Stock on the date of grant determined in accordance with the plan
under which Parent makes such grant.

              (e)     The Company shall take such action as is necessary to
assign and transfer to Parent any repurchase rights held by the Company with
respect to Shares Subject to Repurchase.

              Section 4.11.   INDEMNIFICATION AND DIRECTORS' AND OFFICERS'
                              INSURANCE.

              (a)     After the Effective Time, the Company shall indemnify and
hold harmless (and shall also advance expenses as incurred to the fullest extent
permitted under Applicable Law to), to the extent not covered by insurance, each
person who is now or has been prior to the date hereof or who becomes prior to
the Effective Time an officer or director of the Company (the "Indemnified
Persons") against (i) all losses, claims, damages, costs, expenses (including
counsel fees and expenses), settlement, payments or liabilities arising out of
or in connection with any claim, demand, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was an officer or director of the Company,
whether or not pertaining to any matter existing or occurring at or prior to the
Effective Time and whether or not asserted or claimed prior to or at or after
the Effective Time ("Indemnified Liabilities"); and (ii) all Indemnified
Liabilities based in whole or in part on or arising in whole or in part out of
or pertaining to this Agreement or the transactions contemplated hereby, in each
case to the fullest extent required or permitted under Applicable Law. Nothing
contained herein shall make Parent, Acquisition, the Company or the Surviving
Corporation, an insurer, a co-insurer or an excess insurer in respect of any
insurance policies which may provide coverage for Indemnified Liabilities, nor
shall this Section 4.11 relieve the obligations of any insurer in respect
thereto. The parties hereto intend, to the extent not prohibited by Applicable
Law, that the indemnification provided for in this Section 4.11 shall apply
without limitation to negligent acts or omissions

                                       37
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                                  CONFIDENTIAL

by an Indemnified Person. Each Indemnified Person is intended to be a third
party beneficiary of this Section 4.11 and may specifically enforce its terms.
This Section 4.11 shall not limit or otherwise adversely affect any rights any
Indemnified Person may have under any agreement with the Company or under the
Company's Certificate of Incorporation or bylaws as presently in effect. This
Section 4.11 shall not limit any liability an Indemnified Person may have under
the Escrow Agreement or Article 7 of this Agreement.

              (b)     Notwithstanding anything in this Agreement to the
contrary, from and after the Effective Time, Parent shall cause the Surviving
Corporation to fulfill and honor in all respects the obligations of the Company
pursuant to any indemnification agreements between the Company and its directors
and officers as of or prior to the date hereof (or indemnification agreements in
the Company's customary form for directors joining the Company's Board of
Directors prior to the Effective Time) and any indemnification provisions under
the Company's Certificate of Incorporation or bylaws as in effect immediately
prior to the Effective Time.

              (c)     Neither Parent nor any of its affiliates shall be
obligated to guarantee the payment or performance of the Company's obligations
under Clauses (a) or (b) of this Section 4.11 so long as the Company honors
such obligations to the extent of its net worth at the Effective Time, and
neither Parent nor any such affiliate shall have any liability or obligation to
any Indemnified Person arising from the Company's breach of, or inability to
perform its obligations under, such Clauses in excess of the difference between
the net worth of the Company at the Effective Time and the aggregate of all
amounts paid by the Company in satisfaction of such obligations. The provisions
of this Section 4.11 are intended to be for the benefit of, and will be
enforceable by, each person entitled to indemnification hereunder and the heirs
and representatives of such person. Parent will not permit the Company to merge
or consolidate with any other Person unless the Company will ensure that the
surviving or resulting entity assumes the obligations imposed by this Section
4.11.

              (d)     The provisions of this Section 4.11 may not be amended as
to any Indemnified Person without such Indemnified Person's prior written
consent, which consent will not be unreasonably withheld.

              Section 4.12.   FEES AND EXPENSES. Whether or not the Merger is
consummated, all out-of-pocket fees and expenses incurred in connection with the
Merger, this Agreement and the other agreements and transactions contemplated
hereby and thereby, including all legal, accounting, financial advisory,
consulting and other fees and expenses of third parties incurred by a party in
connection with the negotiation, documentation and effectuation of the terms and
conditions of the Merger, this Agreement and the other agreements and
transactions contemplated hereby and thereby ("THIRD PARTY EXPENSES"), shall be
the obligation of the respective party incurring such fees and expenses;
PROVIDED, HOWEVER, that if the Merger is consummated, the Company shall cause
its Third Party Expenses, and any Third Party Expenses incurred on behalf of any
directors, officers and stockholders that the Company has any obligation to pay,
to be invoiced at or before Closing and not to exceed

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                                  CONFIDENTIAL

(whether or not so invoiced) Five Hundred Fifty Thousand Dollars ($550,000) in
the aggregate.

                                    ARTICLE 5

                    CONDITIONS TO CONSUMMATION OF THE MERGER

              Section 5.1.    CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT
THE MERGER. The respective obligations of each party hereto to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:

              (a)     no statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or enforced
by any United States federal or state court or United States federal or state
Governmental Entity that prohibits, restrains, enjoins or restricts the
consummation of the Merger; and

              (b)     any governmental or regulatory notices, approvals or other
requirements necessary to consummate the transactions contemplated hereby shall
have been given, obtained or complied with, as applicable.

              Section 5.2.    CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligation of the Company to effect the Merger is subject to the satisfaction at
or prior to the Effective Time of the following conditions:

              (a)     the representations and warranties of Parent and
Acquisition contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time with the same effect as if
made at and as of the Effective Time (except to the extent such representations
specifically relate to an earlier date, in which case such representations shall
be true and correct in all material respects as of such earlier date, and in any
event, subject to the foregoing materiality qualification) and, at the Closing,
Parent and Acquisition shall have delivered to the Company a certificate to that
effect, executed by an officer of Parent and Acquisition;

              (b)     each of the covenants and obligations of Parent and
Acquisition to be performed at or before the Effective Time pursuant to the
terms of this Agreement shall have been duly performed in all material respects
at or before the Effective Time and, at the Closing, Parent and Acquisition
shall have delivered to the Company a certificate to that effect, executed by an
officer of Parent and Acquisition;

              (c)     (1) the Company shall have obtained all requisite
approvals of the holders of the Shares, the Preferred A Stock and the Preferred
B Stock for this Agreement and the Merger, (2) a waiver of any notice
requirements with respect to the Preferred A Stock and Preferred B Stock
pursuant to Article IV(B)(2)(c)(iii) of the Company's Certificate of
Incorporation shall have been obtained or the Company's Certificate of
Incorporation shall have been amended to eliminate such notice requirements, and
(3) any notice requirements under any Company Warrant shall have been waived or
complied with;

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                                  CONFIDENTIAL

              (d)     Parent and Acquisition, as the case may be, shall have
entered into all of the Other Agreements;

              (e)     The Company shall have received the opinion of legal
counsel to Parent and Acquisition as to the matters set forth in Exhibit C.

              Section 5.3.    CONDITIONS TO THE OBLIGATIONS OF PARENT AND
ACQUISITION. The respective obligations of Parent and Acquisition to effect the
Merger are subject to the satisfaction at or prior to the Effective Time of the
following conditions:

              (a)     the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
at and as of the Effective Time with the same effect as if made at and as of the
Effective Time (except to the extent such representations specifically relate to
an earlier date, in which case such representations shall be true and correct in
all material respects as of such earlier date) and, at the Closing, the Company
shall have delivered to Parent and Acquisition a certificate to that effect,
executed by two (2) executive officers of the Company;

              (b)     each of the covenants and obligations of the Company to be
performed at or before the Effective Time pursuant to the terms of this
Agreement shah have been duly performed in all material respects at or before
the Effective Time and, at the Closing, the Company shall have delivered to
Parent and Acquisition a certificate to that effect, executed by two (2)
executive officers of the Company;

              (c)     (1) the Company shall have obtained all requisite
approvals of the holders of the Shares, the Preferred A Stock and the Preferred
B Stock for this Agreement and the Merger, (2) a waiver of any notice
requirements with respect to the Preferred A Stock and Preferred B Stock
pursuant to Article IV(B)(2)(c)(iii) of the Company's Certificate of
Incorporation shall have been obtained or the Company's Certificate of
Incorporation shall have been amended to eliminate such notice requirements, and
(3) any notice requirements under any Company Warrant shall have been waived or
complied with;

              (d)     the consents specified on Section 5.3(d) of the Company
Disclosure Schedule and any other material third party consents necessary to
consummate the transactions contemplated hereby shall have been given, obtained
or complied with as applicable;

              (e)     there shall have been no events, changes or effects,
individually or in the aggregate, with respect to the Company having, or that
would reasonably be expected to have, a Material Adverse Effect on the Company;

              (f)     none of the employees listed in a memorandum initialed as
of the date hereof by the Company and Parent (the "Designated Employees") shall
have terminated their employment with the Company or expressed their intention
to do so; no more than 10% of the engineering employees of the Company as of the
date hereof as listed in Section 5.3(f) of the Company Disclosure Schedule (the
"Engineers") shall have terminated their employment with

                                       40
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                                  CONFIDENTIAL

the Company or expressed their intention to do so; and no more than 15% of the
employees OF the Company as of the date hereof as listed in Section 5.3(f) of
the Company Disclosure Schedule (the "Employees") shall have terminated their
employment with the Company or expressed their intention to do so. In addition,
each Designated Employee, at least ninety percent (90%) of the Engineers, and at
least eighty-five percent (85%) of the Employees shall have executed and
delivered to Parent a written instrument, in form and substance reasonably
acceptable to Parent, (1) acknowledging and agreeing that the position offered
to each such person following the Merger does not constitute a material
reduction in such employee's level of responsibility and does not otherwise
result in an "Involuntary Termination," in either case within the meaning of
Section L of the 1997 Stock Option Plan, and (2) agreeing that the terms of any
options that have been granted to such person under the 1997 Stock Option Plan
shall be amended such that the 24-month period during which such options would
accelerate upon an "Involuntary Termination" within the meaning of Section L of
the 1997 Stock Option Plan shall be amended to reduce such period to twelve (12)
months with respect to such employee's options;

              (g)     no more than 5% of the outstanding Shares (excluding any
stockholder listed on Section 5.3(g) of the Company Disclosure Schedule) shall
be Dissenting Shares or other Shares with respect to which dissenters' rights
have not terminated;

              (h)     the Employment Agreement and Non-Competition Agreement
executed by the Company, Parent and each of the individuals set forth in a
separate memorandum between Parent and the Company shall remain in full force
and effect;

              (i)     the Company shall have taken such action as is necessary
to assign and transfer to Parent any repurchase rights held by the Company with
respect to Shares Subject to Repurchase;

              (j)     the Company and Parent shall have agreed on the position
to be offered to each employee of the Company following the Merger, and the
Board of Directors of the Company shall have reviewed each such position and
determined by resolutions unanimously adopted by such Board (which resolutions
shall remain in full force and effect as of the Closing) that no such position
offered to any employee of the Company would constitute a material reduction in
such employee's level of responsibility or would otherwise result in an
"Involuntary Termination," in either case within the meaning of Section L of the
1997 Stock Option Plan. The Board of Directors of the Company shall also have
determined by resolutions unanimously adopted by such Board (which resolutions
shall remain in full force and effect as of the Closing) that the grounds for
dismissal that would constitute "Misconduct" within the meaning of Section M of
the 1997 Stock Option Plan shall not be limited to the matters set forth
therein;

              (k)     the Company shall have obtained a waiver from the
participants in the Company's intellectual property bonus plan in consideration
of such participants becoming participants in Parent's comparable patent
compensation plan; and

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                                  CONFIDENTIAL

              (l)     Parent shall have received the opinion of legal counsel to
the Company as to the matters set forth in EXHIBIT D.

                                    ARTICLE 6

                         TERMINATION; AMENDMENT; WAIVER

              Section 6.1.    TERMINATION. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time whether
before or after approval and adoption of this Agreement by the Company's
stockholders:

              (a)     by mutual written consent of Parent, Acquisition and the
Company;

              (b)     by Parent and Acquisition or the Company if (1) any court
of competent jurisdiction in the United States or other United States federal or
state Governmental Entity shall have issued a final order, decree or ruling, or
taken any other final action, restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action is or shall have
become nonappealable or (2) the Merger has not been consummated by November 30,
1999, subject to extension by Parent or the Company upon written notice to the
other, to obtain any Governmental Approval (including compliance with the HSR
Act, if applicable) (the "Final Date"); provided that no party may terminate
this Agreement pursuant to this clause (2) if such party's failure to Fulfill
any of its obligations under this Agreement shall have been a principal reason
that the Effective Time shall not have occurred on or before said date;

              (c)     by the Company if (1) there shall have been a material
breach of any representations or warranties on the part of Parent or Acquisition
set forth in this Agreement or if any representations or warranties of Parent or
Acquisition shall have become untrue in any material respect, such that the
conditions set forth in Section 5.2(a) would be incapable of being satisfied by
the Final Date, PROVIDED that the Company has not breached any of its
obligations hereunder in any material respect; or (2) there shall have been a
breach by Parent or Acquisition of any of their respective covenants or
agreements hereunder in any material respect or materially adversely affecting
(or materially delaying) the ability of Parent, Acquisition or the Company to
consummate the Merger, and Parent or Acquisition, as the case may be, has not
cured such breach within ten (10) business days after notice by the Company
thereof, PROVIDED that the Company has not breached any of its obligations
hereunder in any material respect; or

              (d)     by Parent and Acquisition if (1) there shall have been a
material breach of any representations or warranties on the part of the Company
set forth in this Agreement or if any representations or warranties of the
Company shall have become untrue in any material respect, such that the
conditions set forth in Section 5.3(a) would be incapable of being satisfied by
the Final Date, PROVIDED that neither Parent nor Acquisition has breached any of
their respective obligations hereunder in any material respect; or (2) there
shall have been a breach by the Company of one or more of its covenants or
agreements hereunder in any material respect or materially adversely affecting
(or materially delaying) the ability of Parent,

                                       42
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                                  CONFIDENTIAL

Acquisition or the Company to consummate the Merger, and the Company has not
cured such breach within ten (10) business days after notice by Parent or
Acquisition thereof, PROVIDED that neither Parent nor Acquisition has breached
any of their respective obligations hereunder in any material respect.

              (e)     By Parent and Acquisition if there shall have been an
Addition that constitutes a Material Adverse Effect on the Company or such that
any of the conditions set forth in Sections 5.1 or 5.3 would be incapable of
being satisfied.

              Section 6.2.    EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 6.1, this
Agreement shall forthwith become void and have no effect without any liability
on the part of any party hereto or its affiliates, directors, officers or
stockholders other than the provisions of this Section 6.2 and Sections 4.3(c),
4.12, 8.4 and 8.5 hereof. Nothing contained in this Section 6.2 or Article 7
shall relieve any party from liability for any breach of this Agreement prior to
such termination and in such event the breaching party shall be liable for the
consequences of such breach.

              Section 6.3.    AMENDMENT. This Agreement may be amended by action
taken by the Company, Parent and Acquisition at any time before or after
approval of the Merger by the stockholders of the Company but after any such
approval no amendment shall be made that requires the approval of such
stockholders under Applicable Law without such approval. This Agreement
(including, subject to Section 4.7, the Company Disclosure Schedule) may be
amended only by an instrument in writing signed on behalf of the parties hereto.

              Section 6.4.    EXTENSION; WAIVER. At any time prior to the
Effective Time, each party hereto may, only by action taken in writing, (i)
extend the time for the performance of any of the obligations or other acts of
the other party, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (iii) waive compliance by the other
party with any of the agreements or conditions contained herein. Any agreement
on the part of any party hereto to any such extension or waiver shall be valid
only if set forth in an instrument, in writing, signed on behalf of such party.
The failure of any party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.

                                    ARTICLE 7

                            SURVIVAL; INDEMNIFICATION

              Section 7.1.    GENERAL SURVIVAL. The parties agree that,
regardless of any investigation made by the parties, the representations,
warranties, covenants and agreements (in the case of covenants and agreements,
to the extent of performance or non-performance prior to the Closing Date) of
the parties contained in this Agreement shall survive the execution and delivery
of this Agreement for a period beginning on the date hereof and ending at 5:00
p.m., California time, on the first anniversary of the Effective Time.

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                                  CONFIDENTIAL

              Section 7.2.    INDEMNIFICATION.

              (a)     INDEMNIFICATION PROVISIONS FOR PARENT AND ACQUISITION.
Subject to the provisions of Section 7. 1, from and after the Effective Time,
Parent, Acquisition and the Surviving Corporation and their respective
affiliates, officers, directors, stockholders, representatives and agents
(collectively the "Parent Indemnitees") shall be indemnified and held harmless
by each Escrow Securityholder, based upon such Escrow Securityholder's pro rata
portion of the Escrow Amount, up to and solely to the extent of the Escrow
Amount, from and against and in respect of any and all Losses (as defined below)
incurred by, resulting from, arising out of, relating to, imposed upon or
incurred by Parent, Acquisition or any other Parent Indemnitee by reason of:

              (i)     any inaccuracy in or breach of any of the Company's
       representations, warranties, covenants or agreements (to the extent of
       performance or non-performance prior to the Closing Date) contained in
       this Agreement; and

              (ii)    any misrepresentation contained in written any statement
       or certificate furnished to Parent, Acquisition or any other Parent
       Indemnitee by or on behalf of the Company in connection with the
       transactions contemplated by this Agreement.

              (b)     INDEMNIFICATION PROVISIONS FOR ESCROW SECURITYHOLDERS.
Subject to the provisions of Section 7.1, from and after the Effective Time,
Escrow Securityholders and their respective affiliates, officers, directors,
stockholders, representatives and agents (collectively, the "Securityholder
Indemnitees") shall be indemnified and held harmless by Parent, based upon such
Escrow Securityholder's pro rata portion of the Escrow Amount, up to and solely
to the extent of the Escrow Amount, from and against and in respect of any and
all Losses (as defined below) incurred by, resulting from, arising out of,
relating to, imposed upon or incurred by the Securityholder Indemnitee by reason
of:

              (i)     any inaccuracy in or breach of any of Parent's or
       Acquisition's representations, warranties, covenants or agreements (to
       the extent of performance or non-performance prior to the Closing Date)
       contained in this Agreement; and

              (ii)    any misrepresentation contained in any written statement
       or certificate furnished to the Company and/or the Securityholder
       Representative by or on behalf of Parent or Acquisition in connection
       with the transactions contemplated by this Agreement.

              For purposes of this Agreement, the term "Indemnitee"" shall mean
either a Parent Indemnitee or a Securityholder Indemnitee, as the case may be.

              (c)     For purposes of this Agreement, the term, "Losses" means
any and all deficiencies, judgments, settlements, demands, claims, suits,
actions or causes of action, assessments, liabilities, losses, damages
(excluding indirect, incidental or consequential damages), interest, fines,
penalties, costs and expenses (including reasonable legal, accounting and other
costs and expenses) incurred in connection with investigating, defending,
settling or

                                      44
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                                  CONFIDENTIAL

satisfying any and all demands, claims, actions, causes of action, suits,
proceedings, assessments, judgments or appeals, and in seeking indemnification
therefor, and interest on any of the foregoing from the date a claim is made
until paid at the rate earned on funds held on the Escrow Amount.
Notwithstanding the above, Losses shall not include (i) expenses incurred in
connection with investigations unless a claim is made; (ii) Losses specifically
identified (as to scope and amount) in the Company Disclosure Schedules; (iii)
liabilities disclosed on the Company Balance Sheet; and (iv) Losses with respect
to which Parent Indemnitees are not entitled to make claims under Section 4.7.

              (d)     No Indemnitee shall be entitled to indemnification for any
Losses arising from the breach of any representations and warranties until the
aggregate amount of all Losses under all claims of all Indemnities for all such
breaches shall exceed One Million Dollars ($1,000,000) (the "Floor"), at which
time all Losses incurred shall be subject to indemnification hereunder in full
including the amount of the Floor. The Floor does not apply to Parent's
obligations under Section 4.11.

              (e)     The amount of any Losses otherwise recoverable under this
Section 7.2 by the Parent Indemnitees shall be reduced by any amounts actually
received by the Parent Indemnitees under insurance policies (net of any costs
incurred in connection with the collection thereof).

              Section 7.3.    MANNER OF INDEMNIFICATION.

              (a)     To provide a fund (i) against which a Parent Indemnitee
may assert claims of indemnification under this Article 7 (an "Indemnification
Claim") and (ii) of not to exceed Five Hundred Thousand Dollars ($500,000) in
the aggregate which the Securityholder Representative may use in defense of any
claim that could result in an indemnity claim, the Escrow Amount shall be
withheld and deposited into escrow pursuant to the Escrow Agreement in
accordance with the provisions of Section 1.10 hereof. The Escrow Amount so
deposited and interest payable thereon shall be held and distributed in
accordance with the Escrow Agreement.

              (b)     Each Indemnification Claim shall be made only in
accordance with this Article 7 and the Escrow Agreement.

              Section 7.4.    SECURITYHOLDER REPRESENTATIVE. For purposes of
this Agreement, the Escrow Securityholders, without any further action on the
part of any such Escrow Securityholder, shall be deemed to have consented to
the appointment of a committee consisting of Brett Helm and William Stensrud,
acting only jointly, as the representative of such Escrow Securityholders (the
"Securityholder Representative"), as the attorney-in-fact for and on behalf of
each such Escrow Securityholder, and the taking by the Securityholder
Representative of any and all actions and the making of any decisions required
or permitted to be taken by them under this Agreement, including the exercise of
the power to (i) execute the Escrow Agreement, (ii) authorize delivery to Parent
and Acquisition of the Escrow Amount, or any portion thereof, in satisfaction of
Indemnification Claims, (iii) authorize the use of up to an aggregate of Five
Hundred Thousand Dollars ($500,000) of the Escrow Amount to

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<PAGE>

                                  CONFIDENTIAL

defend any claims, (iv) agree to, negotiate, enter Into settlements and
compromises of and comply with orders of courts and awards of arbitrators with
respect to such Indemnification Claims, (v) resolve any Indemnification Claims
and (vi) take all actions necessary in the judgment of the Securityholder
Representative for the accomplishment of the foregoing and all of the other
terms, conditions and limitations of this Agreement and the Escrow Agreement.
Accordingly, the Securityholder Representative has unlimited authority and power
to act on behalf of each Escrow Securityholder with respect to this Agreement
and the Escrow Agreement and the disposition, settlement or other handling of
all Indemnification Claims, rights or obligations arising from and taken
pursuant to this Agreement. The Escrow Securityholders will be bound by all
actions taken by the Securityholder Representative in connection with this
Agreement, and Parent and Acquisition shall be entitled to rely on any action or
decision of the Securityholder Representative. The Securityholder Representative
will incur no liability with respect to any action taken or suffered by them in
reliance upon any notice, direction, instruction, consent, statement or other
document believed by them to be genuine and to have been signed by the proper
person (and shall have no responsibility to determine the authenticity thereof),
nor for any other action or inaction, except their own willful misconduct or
gross negligence. In all questions arising under this Agreement or the Escrow
Agreement, the Securityholder Representative may rely on the advice of counsel,
and the Securityholder Representative will not be liable to anyone for anything
done, omitted or suffered in good faith by the Securityholder Representative
based on such advice. The Securityholder Representative will not be required to
take any action involving any expense unless the payment of such expense is made
or provided for in a manner satisfactory to them. So long as the Securityholder
Representative shall at all times be comprised of at least one (1) and no more
than three (3) individuals, at any time during the term of the Escrow Agreement,
holders of a majority in interest of the Escrow Amount can remove and replace
one or all of the individuals serving as the Securityholder Representatives by
written consent by sending notice and a copy of the written consent appointing
such new individual or individuals signed by holders of a majority in interest
of the Escrow Amount to Parent and the Escrow Agent. Such appointment will be
effective upon the later of the date indicated in the consent or the date such
consent is received by Parent and the Escrow Agent. Any such new individual
shall serve in such capacity subject to the terms and conditions of the Escrow
Agreement and provide notice to the Escrow Agent of its identity and notice
information for purposes of Section 21 of the Escrow Agreement. If more than one
individual is serving as the Securityholder Representative, such individuals may
only take actions jointly.

              Section 7.5.    THIRD-PARTY CLAIMS. If Parent becomes aware of a
third-party claim that Parent believes, in good faith, may result in a demand by
it against the Escrow Amount, Parent shall notify the Securityholder
Representative of such claim and shall conduct the defense of such claim. The
reasonable costs of the defense of any third-party action or claim incurred by
the Securityholder Representative shall be paid by the Escrow Securityholders.
Parent shall conduct such defense in a commercially reasonable manner, but shall
not settle any such claim without the consent of the Securityholder
Representative, such consent not to be unreasonably withheld; PROVIDED, HOWEVER,
that, if the consent of the Securityholder Representative is so obtained, such
settlement of that portion of any such claim shall alone be determinative of the
amount of the claim against the Amount and

                                       46
<PAGE>

                                  CONFIDENTIAL

neither the Securityholder Representative nor any person who has a beneficial
interest in the Escrow Amount shall have any power or authority to object under
any provision of this Article 7 to the amount of any demand by Parent against
the Escrow Amount with respect to such settlement. Parent shall provide the
Securityholder Representative copies of all pleadings and other non-proprietary
and non-confidential documents reasonably requested by the Securityholder
Representative, shall provide such other information as the Securityholder
Representative shall reasonably request, and shall inform the Securityholder
Representative of the general progress of the case; PROVIDED, HOWEVER, that
Parent shall not be required to disclose any information that Parent determines
in its good faith judgment, is confidential or proprietary.

              Section 7.6.    EXCLUSIVE REMEDY. Notwithstanding any other
provision of this Agreement to the contrary, the Escrow Amount shall be the sole
and exclusive remedy of the Indemnitees from and after the Effective Time for
any claims arising under this Agreement, including claims of breach of any
representation, warranty or covenant in this Agreement; PROVIDED, HOWEVER, that
the foregoing clause of this sentence shall not be deemed a waiver by any party
of any right to specific performance or injunctive relief, or any remedy arising
by reason of any claim of fraud with the respect to this Agreement. In that
regard, other than claims arising out of fraud, the total liability to
Indemnitees shall be limited to the Escrow Amount.

                                    ARTICLE 8

                                  MISCELLANEOUS

              Section 8.1.    ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
(including the Company Disclosure Schedule), the Escrow Agreement, the CNDA, as
amended, the Commitment Letter dated September 21, 1999 and the Letter dated
October 5, 1999 (a) constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and supersede all other prior and
contemporaneous agreements and understandings both written and oral between the
parties with respect to the subject matter hereof and (b) shall not be assigned
by operation of law or otherwise; PROVIDED, HOWEVER, that Acquisition, Parent
and the Surviving Corporation may assign any or all of its respective rights and
obligations under this Agreement to any direct or indirect wholly owned
subsidiary of Parent, but no such assignment shall relieve Parent or Acquisition
of its obligations hereunder if such assignee does not perform such obligations.

              Section 8.2.    VALIDITY. If any provision of this Agreement or
the application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby and
to such end the provisions of this Agreement are agreed to be severable.

              Section 8.3.    NOTICES. All notices and other communications
pursuant to this Agreement shall be in writing and shall be deemed given if
delivered personally, telecopied,

                                       47
<PAGE>

                                  CONFIDENTIAL

sent by nationally-recognized overnight courier or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the addresses set forth below or to such other address as the party to whom
notice is to be given may have furnished to the other parties hereto in writing
in accordance herewith. Any such notice or communication shall be deemed to have
been delivered and received (A) in the case of personal delivery, on the date of
such delivery, (B) in the case of telecopier, on the date sent if confirmation
of receipt is received and such notice is also promptly mailed by registered or
certified mail (return receipt requested), (C) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next business day delivery, on the next business day after
the date when sent and (D) in the case of mailing, on the third business day
following that on which the piece of mail containing such communication is
posted:

              if to Parent or Acquisition:     Intel Corporation
                                               2200 Mission College Boulevard
                                               Santa Clara, California 95054
                                               Telecopier: (408) 765-1859
                                               Attention: General Counsel

                                               and

                                               Intel Corporation
                                               2200 Mission College Boulevard
                                               Santa Clara, California 95054
                                               Telecopier: (408) 765-1859
                                               Attention: Treasurer

              with a copy to:                  Gibson, Dunn & Crutcher LLP
              (which shall not constitute      One Montgomery Street
              notice)                          Telesis Tower
                                               San Francisco, California 94104
                                               Telecopier: (415) 374-8427
                                               Attention: Kenneth R. Lamb

              if to the Company to:            Ipivot, Inc.
                                               12568 Kirkham Court
                                               Poway, California 92064
                                               Telecopier: (858) 679-6966
                                               Attention: Brett Helm

              with a copy to:                  Brobeck, Phleger & Harrison LLP
              (which shall not constitute      550 West C Street
              notice)                          Suite 1300
                                               San Diego, California 92101-3532
                                               Telecopier: (619) 234-3848

                                       48
<PAGE>

                                  CONFIDENTIAL

                                               Attention: Craig S. Andrews

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.

              Section 8.4.    DISPUTE RESOLUTION.

              (a)     All disputes arising directly under the express terms of
this Agreement or the grounds for termination thereof shall be resolved as
follows: The representatives of the parties shall meet to attempt to resolve
such disputes. If the disputes cannot be resolved by the parties'
representatives, either party may make a written demand for formal dispute
resolution and specify therein the scope of the dispute. Within thirty (30) days
after such written notification, the parties agree to meet for one day with an
impartial mediator and consider dispute resolution alternatives other than
litigation. If an alternative method of dispute resolution is not agreed upon
within thirty (30) days after the one-day mediation, either party may begin
litigation proceedings.

              (b)     Notwithstanding the provisions of Section 8.4(a) above,
each party shall have the right, without the requirement of first seeking a
remedy through arbitration, to seek preliminary injunctive or other equitable
relief in any proper court in the event that such party determines that eventual
redress through arbitration will not provide a sufficient remedy for any
violation of this Agreement by the other party

              Section 8.5.    GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.

              (a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of Delaware and the federal courts of the United States
of America located in the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware state or federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 8.3 or in such other manner as may
be permitted by Applicable Law, shall be valid and sufficient service thereof.

                                       49
<PAGE>

                                  CONFIDENTIAL

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

              (c)     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
(iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5.

              Section 8.6.    DESCRIPTIVE HEADINGS. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.

              Section 8.7. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and its successors and
permitted assigns and, except as expressly provided herein, nothing in this
Agreement is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

              Section 8.8. CERTAIN DEFINITIONS. For the purposes of this
Agreement the term:

              (a)     "affiliate" means a person that, directly or indirectly,
through one or more intermediaries controls, is controlled by or is under common
control with the first-mentioned person.

              (b)     "Applicable Law" means, with respect to any person, any
domestic or foreign, federal, state or local statute, law, ordinance, rule,
regulation, order, writ, injunction, judgment, decree or other requirement of
any Governmental Entity existing as of the date

                                       50
<PAGE>

                                  CONFIDENTIAL

hereof or as of the Effective Time applicable to such Person or any of its
respective properties, assets, officers, directors, employees, consultants or
agents.

              (c)     "business day" means any day other than a day on which the
Nasdaq National Market is closed.

              (d)     "capital stock" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests entitling the holder thereof to vote with respect to matters involving
the issuer thereof.

              (e)     "Commitment Letter" means the written commitment from
Parent to the Company agreeing, in certain circumstances, to invest Ten
Million Dollars ($10,000,000) in the Company based upon a post-money
enterprise value of Three Hundred Million Dollars ($300,000,000).

              (f)     "knowledge" or "known" means, with respect to any
matter in question, the collective actual knowledge of such matter of the
members of the Company Board and the individuals listed on Schedule 8.8(f) of
the Company Disclosure Schedule, in the case of the Company, and the members
of the Board of Directors and the executive officers of Parent, in the case
of Parent, and the Company and Parent shall also be deemed to have actual
knowledge of all books and records of the Company, in the case of the
Company, and Parent, in the case of Parent.

              (g)     "Lien" means, with respect to any asset (including any
security), any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset; PROVIDED, HOWEVER, that the term "Lien"
shall not include (i) statutory liens for Taxes that are not yet due and payable
or are being contested in good faith by appropriate proceedings and are
disclosed in Section 2.15 of the Company Disclosure Schedule or that are
otherwise not material, (ii) statutory or common law liens to secure obligations
to landlords, lessors or renters under leases or rental agreements confined to
the premises rented, (iii) deposits or pledges made in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old age
pension or other social security programs mandated under Applicable Laws, (iv)
statutory or common law liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens and (v) restrictions on transfer of securities imposed by applicable state
and federal securities laws.

              (h)     "include" or "including" means "include, without
limitation" or "including, without limitation," as the case may be, and the
language following "Include" or "including" shall not be deemed to set forth an
exhaustive list.

              (i)     "Material Adverse Effect on the Company" means any
circumstance, change in, or effect on (or circumstance, change in or effect
involving a prospective change on) the Company that is reasonably likely in the
future to be, materially adverse to the operations, assets or liabilities
(including contingent liabilities), earnings, prospects, or results of
operations or the business (financial or otherwise) of the Company.

                                       51
<PAGE>

                                  CONFIDENTIAL

              (j)     "Maximum Merger Consideration" means (1) Five Hundred
Million Dollars ($500,000,000), minus (2) the amount by which all indebtedness
of the Company on the Closing Date, excluding the Saber Springs lease, exceeds
Five Million Dollars ($5,000,000).

              (k)     "person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization or
other legal entity including any Governmental Entity.

              (l)     "Share Subject to Repurchase" means an outstanding Share
that is subject to a Company right of repurchase pursuant to the Stock Option
Plans or otherwise.

              (m)     "subsidiary" or "subsidiaries" of the Company, Parent, the
Surviving Corporation or any other person means any corporation, partnership,
limited liability company, association, trust, unincorporated association or
other legal entity of which the Company, Parent, the Surviving Corporation or
any such other person, as the case may be (either alone or through or together
with any other subsidiary), owns, directly or indirectly, 50% or more of the
capital stock the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.

              Section 8.9.    PERSONAL LIABILITY. This Agreement shall not
create or be deemed to create or permit any personal liability or obligation on
the part of any direct or indirect stockholder of the Company or Parent or
Acquisition or any officer, director, employee, agent, representative or
investor of any party hereto.

              Section 8.10.   COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       52
<PAGE>

                                  CONFIDENTIAL

              IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on its behalf as of the day and year first above written.

                                             INTEL CORPORATION

                                             By:
                                                --------------------------------
                                             Name:  [INSERT NAME]
                                             Title: Vice President and Treasurer

                                             IPIVOT CORPORATION

                                             By:
                                                --------------------------------
                                             Name:  [INSERT NAME]
                                             Title: President and
                                                    Chief Executive Officer

                                             WCT ACQUISITION CORPORATION

                                             By
                                                --------------------------------
                                             Name:  [INSERT NAME]
                                             Title: President

                                             SECURITYHOLDER REPRESENTATIVE

                                             By:
                                                --------------------------------
                                             Name:  Brett Helm

                                             By:
                                                --------------------------------
                                             Name:  William Stensrud

                                       53

[SIGNATURE PAGE TO MERGER AGREEMENT BETWEEN IPIVOT, INC., INTEL CORPORATION, WCT
           ACQUISITION CORPORATION AND SECURITYHOLDER REPRESENTATIVE]

<PAGE>

                                   EXHIBIT B

                                ESCROW AGREEMENT

                                      B-1
<PAGE>

                                ESCROW AGREEMENT

       This ESCROW AGREEMENT dated as of October __, 1999 (this "Agreement"), is
by and among Intel Corporation, a Delaware corporation ("Parent"), WCT
Acquisition Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Acquisition"), Ipivot, Inc., a Delaware corporation (the
"Company"), Citibank, N.A., as escrow agent (in such capacity, the "Escrow
Agent"), and Brett Helm and William Stensrud, both individual residents in the
State of California (collectively the "Securityholder Representative").

                              W I T N E S S E T H:

       WHEREAS, pursuant to the Agreement and Plan of Merger dated as of
October ___, 1999 (as amended from time to time, the "Merger Agreement"), by and
among Parent, Acquisition and the Company, the respective Boards of Directors of
Acquisition and the Company have each approved the merger of Acquisition with
and into the Company (the "Merger"), pursuant to which the separate corporate
existence of Acquisition shall cease, and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation"), in each case
upon the terms and subject to the conditions set forth in the Merger Agreement.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Merger Agreement;

       WHEREAS, in connection with the consummation of the Merger, on the
Closing Date, Parent is depositing with the Escrow Agent Thirty Million Dollars
($30,000,000), to be held in an escrow deposit which is mutually acceptable to
Parent and the Company (such deposit, including the Escrow Amount, as defined
below, the "Escrow Deposit") by the Escrow Agent as security and a source of
satisfaction for any Losses suffered by Parent, Acquisition and any other
Indemnitees for which any such person is entitled to indemnification pursuant to
the Merger Agreement;

       WHEREAS, the Escrow Agent is willing to act as the escrow agent upon the
terms and subject to the conditions of this Agreement; and

       WHEREAS, pursuant to the Merger Agreement, the Escrow Securityholders (as
defined in the Merger Agreement) have irrevocably appointed (without any further
action on the part of Parent, the Company, the Escrow Agent or any other Person)
the Securityholder Representative as their attorney-in-fact, to act on their
behalf with respect to all matters relating to the Escrow Amount and any claims
for Losses made against the Escrow Deposit.

                                    AGREEMENT

       NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby agree as follows:

       1.     DEPOSIT OF ESCROW AMOUNT. Concurrent with the Closing, Thirty
Million Dollars ($30,000,000) payable by Parent to the Escrow Securityholders
(such amount, together with all interest earned thereon in the Escrow Deposit
and any additional cash, property and other amounts received is referred to as
the "Escrow Amount"), shall be deposited in the Escrow

<PAGE>

                                  CONFIDENTIAL

Deposit by Parent or a subsidiary of Parent as provided in Article 1 of the
Merger Agreement. In no event shall the Escrow Agent be charged with a duty to
solicit the Escrow Amount.

       2.     CLAIMS AGAINST THE ESCROW DEPOSIT

       (a)    The Escrow Deposit shall be held by the Escrow Agent as security
and a source of satisfaction for, as contemplated by Article 7 of the Merger
Agreement, any claims for Losses made by Parent, Acquisition, the Surviving
Corporation and the other Indemnitees, and for the reasonable, out-of-pocket
costs of the Securityholder Representative (not to exceed in the aggregate Five
Hundred Thousand Dollars ($500,000)) incurred in connection with the defense of
claims under Article 7 of the Merger Agreement.

       (b)    In the event that Parent wishes to make a claim for Losses under
Article 7 of the Merger Agreement, Parent shall deliver a written notice (a
"Notice of Claim") to the Securityholder Representative and the Escrow Agent.
The Notice of Claim shall (i) specify in reasonable detail the nature of the
claim being made, and (ii) state the aggregate dollar amount of such claim.

       (c)    If the Escrow Securityholders wish to object to the allowance of
the claim made in a Notice of Claim, the Securityholder Representative on behalf
of the Escrow Securityholders must deliver a written objection to the Escrow
Agent and Parent within twenty (20) calendar days after receipt of such Notice
of Claim by the Securityholder Representative expressing such objection and
explaining in reasonable detail and in good faith the basis therefor. Following
receipt by Parent of the Escrow Securityholders' written objection, if any,
Parent and the Securityholder Representative shall promptly meet to agree on the
rights of the respective parties with respect to each of such claims. If the
Securityholder Representative and Parent should so agree, a memorandum setting
forth such agreement shall be prepared and signed by both parties and shall be
furnished to the Escrow Agent. The Escrow Agent shall be entitled to
conclusively rely on any such written memorandum and pay out amounts from the
Escrow Deposit in accordance with the terms thereof: Any dispute between Parent
and the Securityholder Representative on behalf of the Escrow Securityholders
shall be resolved in accordance with Section 8.4 and the other applicable
provisions of the Merger Agreement.

       (d)    If the Securityholder Representative on behalf of the Escrow
Securityholders fails to respond to a Notice of Claim within such twenty (20)
calendar day period, Parent may offset the aggregate dollar amount of such
pending claim as referenced in the Notice(s) of Claim against the Escrow Amount
then held in the Escrow Deposit. The Escrow Agent shall pay to Parent or the
payee indicated by Parent in wire instructions to be delivered by Parent to
Escrow Agent from the Escrow Deposit such amount so offset as referenced in the
Notice of Claim. Notwithstanding the foregoing, the Escrow Agent shall not make
any payment with respect to any Notice of Claim(s) until the amounts claimed in
such Notice of Claim, when aggregated with any amounts claimed in Notices of
Claim previously delivered to the Escrow Agent and the Securityholder
Representative (or lesser amount if any amount included in a previous Notice of
Claim has been reduced pursuant to Section 2(c) of this Agreement), exceed One
Million Dollars ($1,000,000) (the "Floor"), after such time all such amounts
(including the amount of the Floor) shall be payable in full up to the aggregate
Escrow Amount by the Escrow Agent.

                                        2

<PAGE>

                                  CONFIDENTIAL

       (e)    Any offset by Parent against the Escrow Amount pursuant to the
Merger Agreement or this Agreement shall be borne by the Escrow Securityholders
pro rata in accordance with their interest in the aggregate Escrow Amount as set
forth on SCHEDULE 1 to this Agreement.

       (f)    Any Escrow Amount set aside and held by the Escrow Agent in
connection with any claim pending pursuant to this Section 2 shall continue to
be held until a final settlement of such claim has been reached (a "Final
Determination"), as determined by mutual agreement of Parent and the
Securityholder Representative as forwarded in writing to the Escrow Agent or
resolved between Parent and Securityholder Representative on behalf of the
Escrow Securityholders pursuant to Section 8.4 of the Merger Agreement. Within
five (5) business days following receipt by the Escrow Agent of a written
agreement executed by the Securityholder Representative and Parent regarding the
final settlement or resolution of a Notice of Claim, the Escrow Agent shall,
subject to the last sentence of Section 2(d), pay Parent any amount directed to
be paid in such written agreement. The remainder of any amount covered by a
Notice of Claim not required to be paid to Parent after a Final Determination
shall continue to be held in the Escrow Deposit, unless the Final Determination
occurs after any distribution to the Escrow Securityholders pursuant to Section
3, in which case such remainder shall be paid to the Escrow Securityholders by
check.

       3.     RELEASE OF ESCROW DEPOSIT. Within five (5) business days following
the first anniversary of the Closing Date, the Escrow Agent shall pay by check
to the Escrow Securityholders listed in Schedule 1 so entitled the balance of
the Escrow Amount MINUS an amount equal to the aggregate amount of all claims of
Parent and the other Indemnitees (as defined in the Merger Agreement) as set
forth in the Notice(s) of Claim then pending against the Escrow Securityholders
(which shall continue to be held pursuant to Section 2(f)). Any payment to the
Escrow Securityholders pursuant to this Section 3 or pursuant to the last
sentence of Section 2(f) shall be paid to the Escrow Securityholders pro rata in
accordance with their interests in the Escrow Amount as set forth on SCHEDULE 1
hereto.

       4.     INVESTMENT OF ESCROW DEPOSIT.

       (a)    The Escrow Agent shall hold the Escrow Amount subject to the terms
and conditions of this Agreement. The Escrow Agent shall invest all cash held in
the Escrow Deposit in any Permitted Investment (as defined below). The Escrow
Agent shall not be liable to any party for any Losses incurred in connection
with any investments made by it pursuant to this Section 4.

       (b)    All interest or other earnings or income earned with respect to
the investment of the Escrow Deposit in accordance with this Section 4 shall be
paid by the Escrow Agent on a pro rata basis to the Escrow Securityholders upon
release of the amount to be paid pursuant to Section 3 of this Agreement. The
Escrow Agent shall have the right to liquidate the Escrow Amount in order to
provide funds necessary to make any required payments under this Agreement, and
the Escrow Agent shall not be liable for any Losses incurred in connection with
such liquidation (except for those Losses arising out of the Escrow Agent's
willful misconduct or negligence). For purposes of this Agreement, the term
"Permitted Investment" shall mean

                                       3
<PAGE>

                                  CONFIDENTIAL

interest bearing accounts (U.S. Treasury money market accounts) with a financial
institution rated A or higher by Standard and Poors and Moodys and having assets
in excess of $50 billion and such investments as the Parent and the
Securityholder Representative shall jointly direct in writing.

       The Escrow Agent shall have no obligation to invest or reinvest the
Escrow Amount if deposited with the Escrow Agent after 11:00 a.m. (E.S.T.) on
such day of deposit. Instructions received after 11:00 am. will be treated as if
received on the following business day.

       The Escrow Agent shall have the power to sell or liquidate the foregoing
investments whenever the Escrow Agent shall be required to release the Escrow
Amount pursuant to the terms hereof. Requests (or instructions) received after
11:00 a.m. (E.S.T.) by the Escrow Agent to liquidate the Escrow Amount will be
treated as if received on the following business day. The Escrow Agent shall
have no liability for any investment losses resulting from the investment,
reinvestment or liquidation of the Escrow Amount made in accordance with the
terms of this Agreement. Any interest or other income received on such
investment and reinvestment of the Escrow Amount shall become part of the Escrow
Amount. If a selection is not made, the Escrow Amount shall remain uninvested
with no liability for interest therein. It is agreed and understood that the
Escrow Agent may earn fees associated with the investments outlined above, as
set forth in Section 14 and in the attached fee schedule between Parent and the
Securityholder Representative on behalf of the Escrow Securityholders and the
Escrow Agent.

       5.     OWNERSHIP OF ESCROW AMOUNT. The Securityholder Representative on
behalf of the Escrow Securityholders shall not have the right to sell, transfer,
pledge, hypothecate or otherwise dispose of any of the Escrow Amount (or any
interest therein).

       6.     DUTIES OF ESCROW AGENT. The Escrow Agent shall treat the Escrow
Deposit, including without limitation, the Escrow Amount, with such degree of
care as it treats its own similar property. It is agreed that the duties and
obligations of the Escrow Agent are only such as are herein specifically
provided and no other. The Escrow Agent's duties are as a depository only, and
the Escrow Agent shall incur no liability whatsoever, except for its willful
misconduct or negligence. The Escrow Agent may consult with counsel of its
choice, and shall not be liable for any action taken, suffered or omitted to be
taken by it in good faith in accordance with the advice of such counsel (subject
to the exception set forth in the prior sentence). The Escrow Agent shall not be
bound in any way by any of the terms of the Merger Agreement or any other
agreement to which Parent, Acquisition, the Company, the Securityholder
Representative or the Escrow Securityholders are parties, whether or not the
Escrow Agent has knowledge thereof, and the Escrow Agent shall not in any way be
required to determine whether or not the Merger Agreement or any other agreement
has been complied with by Parent, Acquisition, the Company or the Escrow
Securityholders or any other party thereto. In the event that the Escrow Agent
shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands which, in its opinion, are in conflict with any
of the provisions of this Agreement, it shall be entitled to refrain from taking
any action other than to keep safely all property held in escrow until it shall
be directed otherwise pursuant to a joint notice from Parent and the
Securityholder Representative or pursuant to a Final Determination. This
Agreement shall not create any fiduciary duty of the Escrow Agent to Parent, the
Surviving Corporation, the

                                       4

<PAGE>

                                  CONFIDENTIAL

Company, the Securityholder Representative or the Escrow Securityholders nor
disqualify the Escrow Agent from representing any of such parties in any way
(other than as counsel in connection with this Agreement),

       7.     RELIANCE BY ESCROW AGENT ON WRITTEN NOTICES. The Escrow Agent may
conclusively rely and shall be fully protected in relying upon any written
notice,
demand, certificate or document which it, in good faith, believes to be genuine.
Set forth in SCHEDULE 2 hereto is a list of the names of the persons (together
with any persons named in accordance with the next sentence, the "Authorized
Officers") authorized to act for Parent under this Agreement. An Assistant
Secretary of Parent shall, from time to time, certify to the Escrow Agent the
names of any other persons authorized to act for Parent under this Agreement.
The Escrow Agent may rely on and shall be authorized and protected in acting or
failing to act upon the written, facsimile, or electronically delivered
instructions, with respect to any matter relating to the Escrow Agent acting as
Escrow Agent, of any Authorized Officers named on SCHEDULE 2 hereto, covered by
this Agreement (or supplementing or qualifying any such actions).

       8.     RISK TO ESCROW AGENT. None of the provisions of this Agreement
shall require the Escrow Agent to expend or risk its own funds or otherwise to
incur any liability, financial or otherwise, in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.

       9.     INVESTIGATION BY ESCROW AGENT. The Escrow Agent shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
entitlement order, approval or other paper or document.

       10.    ESCROW AGENT'S EXECUTION OF POWER. The Escrow Agent may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, attorneys, custodians, or nominees appointed
with due care, and shall not be responsible for any willful misconduct or gross
negligence on the part of any agent, attorney, custodian or nominee so
appointed.

       11.    SUCCESSOR TO ESCROW AGENT. Any corporation into which the Escrow
Agent may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent shall be a party, or any corporation succeeding to the business of
the Escrow Agent shall be the successor of the Escrow Agent hereunder without
the execution or filing of any paper with any party hereto except where an
instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.

       12.    LEGAL PROCEEDINGS. The Escrow Agent shall not be required to
institute legal proceedings of any kind.

       13.    RESIGNATION OF ESCROW AGENT. If the Escrow Agent at any time, in
its sole discretion, deems it necessary or advisable to resign as Escrow Agent
hereunder, it may do so by

                                       5

<PAGE>

                                  CONFIDENTIAL

giving prior written notice of such event to Parent, the Surviving Corporation
and the Securityholder Representative and thereafter delivering the Escrow
Amount to any other escrow agent mutually agreed upon by Parent and the
Securityholder Representative as notified to the Escrow Agent in writing, and
if no such escrow agent shall be designated by Parent and the Securityholder
Representative within sixty (60) calendar days of such written notice, then the
Escrow Agent may do so by delivering the Escrow Amount either (a) to any bank or
trust company located in the State of California which is willing to act as
escrow agent hereunder in its place, or (b) if no such bank or trust company can
be retained within a reasonable period after such sixty (60) calendar day period
after the delivery by the Escrow Agent of its written notice, to the clerk or
other proper officer of a court of competent jurisdiction located within the
State of California to the extent permitted by law (any such successor to the
Escrow Agent, whether designated by Parent and Securityholder Representative or
pursuant to clause (a) or (b) above or otherwise, hereinafter referred to as the
"Successor Agent"). Parent and the Securityholder Representative may, at any
time after the date hereof, agree in writing to substitute a Successor Agent for
the Escrow Agent, whereupon the Escrow Agent shall deliver the Escrow Amount to
such Successor Agent. The fees of any Successor Agent shall be borne one-half by
Parent and one-half by the Securityholder Representative on behalf of the Escrow
Securityholders. Upon delivery of the Escrow Amount to the Successor Agent, (i)
the Escrow Agent shall be discharged from any and all responsibility or
liability with respect to the Escrow Amount (except as otherwise provided
herein) and (ii) all references herein to the "Escrow Agent" shall, where
applicable, be deemed to include such Successor Agent and such Successor Agent
shall thereafter become the Escrow Agent for all purposes of this Agreement.

       14.    FEES OF THE ESCROW AGENT. Parent covenants and agrees to pay to
the Escrow Agent from time to time, and the Escrow Agent shall be entitled to,
the fees and expenses agreed to in writing between Parent and the Escrow Agent,
and will further pay or reimburse the Escrow Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Escrow
Agent in accordance with any of the provisions hereof or any other documents
executed in connection herewith (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and of all persons not
regularly in its employ). The Securityholder Representative shall have no
obligation with respect to the foregoing. The obligations of Parent under this
Section 14 to compensate the Escrow Agent and to pay or reimburse the Escrow
Agent for reasonable expenses, disbursements and advances shall survive the
satisfaction and discharge of this Agreement or the earlier resignation or
removal of the Escrow Agent.

       15.    [Intentionally omitted.)

       16.    INDEMNIFICATION OF THE ESCROW AGENT. Parent and the Securityholder
Representative on behalf of each of the Escrow Securityholders, jointly and
severally, agree to assume any and all obligations imposed now or hereafter by
any applicable Tax law with respect to the payment of the Escrow Amount under
this Agreement, and to indemnify and hold the Escrow Agent harmless from and
against any claims, Taxes, additions for late payment, interest, penalties and
other expenses (including reasonable attorney's fees and expenses) arising from
or in connection with this Agreement, that may be assessed against the Escrow
Agent on any such

                                       6
<PAGE>

                                  CONFIDENTIAL

payment or other activities under this Agreement. Parent and the Securityholder
Representative on behalf of the Escrow Securityholders undertake to instruct the
Escrow Agent in writing or orally with a confirmation in writing with respect to
the Escrow Agent's responsibility for withholding and other Taxes, assessments
or other governmental charges, certifications and governmental reporting in
connection with its acting as Escrow Agent under this Agreement. Parent and the
Securityholder Representative on behalf of the Escrow Securityholders, jointly
and severally, agree to indemnify and hold the Escrow Agent harmless from any
liability on account of Taxes, assessments or other governmental charges,
including the withholding or deduction or the failure to withhold or deduct
same, and any liability for failure to obtain proper certifications or to
properly report to governmental entities, to which the Escrow Agent may be or
become subject in connection with or which arises out of this Agreement,
including costs and expenses (including reasonable legal fees and expenses),
interest and penalties.

       17.    ESCROW AGENT REPORTING. Notwithstanding anything to the contrary
herein, except as required by law, in no event shall the Escrow Agent be under a
duty to file any reports or withhold or deduct any amounts in respect of taxes
due for payments made pursuant to this Agreement.

       18.    APPOINTMENT OF SUCCESSOR TO SECURITYHOLDER REPRESENTATIVE. So long
as the Securityholder Representative shall at all times be comprised of at least
one (1) and no more than three (3) individuals, at any time during the term of
this Agreement, holders of a majority in interest of the Escrow Amount can
remove and replace one or all of the individuals serving as the Securityholder
Representative by written consent by sending notice and a copy of the written
consent appointing such new individual or individuals, signed by holders of a
majority in interest of the Escrow Amount to Parent and the Escrow Agent. Such
appointment will be effective upon the later of the date indicated in the
consent or the date such consent is received by Parent and the Escrow Agent. Any
such new individual shall serve in such capacity subject to the terms and
conditions of this Agreement and provide notice to the Escrow Agent of its
identity and notice information for the purposes of Section 21. If more than one
individual is serving as the Securityholder Representative, such individuals may
only take actions jointly.

       19.    TERMINATION OF AGREEMENT. Upon disbursement by the Escrow Agent
(including any Successor Agent) of all of the Escrow Amount pursuant to the
terms of this Agreement, this Agreement shall terminate (PROVIDED that the
provisions of Sections 14, 15 and 16 hereof shall survive such termination).

       20.    AMENDMENTS AND MODIFICATIONS. The Escrow Agent shall not be bound
by any modification, amendment, termination, cancellation, rescission or
suppression of this Agreement unless the same shall be in writing and signed by
Parent, the Surviving Corporation, the Escrow Agent and the Securityholder
Representative, on behalf of the Escrow Securityholders.

       21.    Notices. All notices and other communications hereunder shall be
in writing and, shall be effective if it *is delivered personally, couriered,
telecopied or mailed (United States registered or certified mail, postage
prepaid), and shall be deemed to have been duly given (a) when received, if
delivered personally, (b) when sent by telecopier upon receipt of

                                       7
<PAGE>

                                  CONFIDENTIAL

confirmation (c) when sent by express courier service (receipt requested) or (d)
five calendar (5) days after being so mailed and received, as follows:

      (a)  if to Parent or Acquisition, to:  WITH COPIES TO:
                                             (which shall not constitute notice)

           Intel Corporation                 Gibson, Dunn & Crutcher LLP
           2200 Mission College Boulevard    One Montgomery Street
           Santa Clara, California 95054     Telesis Tower
           Telecopier: (408) 765-1859        San Francisco, CA 94104
           Attention: General Counsel        Telephone: (415) 393-8200
                                             Facsimile: (415) 374-8427
                                             Attention: Kenneth R. Lamb
           and

           Intel Corporation
           2200 Mission College Boulevard
           Santa Clara, California 95054
           Telecopier: (408) 765-1859
           Attention: Treasurer

      (b)  if to the Company, to:            WITH COPIES TO:
                                             (which shall not constitute notice)

           Ipivot, Inc.                      Brobeck, Phleger & Harrison LLP
           12568 Kirkharn Court              550 West C Street
           Poway, California 92064           Suite 1300
           Telecopier: (858) 679-6966        San Diego, California 92101-3532
           Attention: President and Chief    Telephone: (619) 234-1966
           Executive Officer                 Facsimile: (619) 234-3848
                                             Attention: Craig S. Andrews
      (c)  if to the Securityholder
           Representative, to:

           Brett Helm
           Ipivot, Inc.
           12568 Kirkham Court Poway,
           California 92064
           Telecopier: (858) 679-6966

           and

                                       8
<PAGE>

                                  CONFIDENTIAL

           William Stensrud

           Telecopier:
                      --------------

      (d)  if to the Escrow Agent, to

           Citibank, N.A.
           Global Trust and Agency Service
           111 Wall Street; 5th Floor
           New York, New York 10005
           Telecopier: (212) 657-3866
           Attention: Kerry Monaghan
           McDonough

or at such other address as any of the parties to this Agreement may hereafter
designate by written notice to the other parties.

       22.    ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party (whether by
operation of law or otherwise) without the prior written consent of the other
parties; PROVIDED that Parent may assign its rights and obligations to any
affiliate, but no such assignment shall relieve Parent of its obligations
hereunder if such assignee does not perform such obligations. This Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.

       23.    CONSTRUCTION; INTERPRETATION. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Article, section, schedule,
exhibit, recital and party references are to this Agreement unless otherwise
stated. No party, nor its counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions of this Agreement, and all provisions
of this Agreement shall be construed in accordance with their fair meaning, and
not strictly for or against any party.

       24.    OTHER MISCELLANEOUS PROVISIONS. This Agreement shall be governed
and construed in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law thereof. This Agreement may
be executed simultaneously in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

                                       9
<PAGE>

       IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.

                                   PARENT

                                   INTEL CORPORATION,
                                   a Delaware corporation

                                   By:
                                      -----------------------------------------
                                   Name: [INSERT NAME]
                                   Its:  Vice President and Treasurer

                                   ACQUISITION

                                   WCT ACQUISITION CORPORATION,
                                   a Delaware corporation

                                   By:
                                      -----------------------------------------
                                   Name: [INSERT NAME]
                                   Its:  [INSERT TITLE]

                                   COMPANY

                                   IPIVOT, INC.,
                                   a Delaware corporation

                                   By:
                                      -----------------------------------------
                                   Name: [INSERT NAME]
                                   Its:  President and Chief Executive Officer

                                   ESCROW AGENT

                                   CITIBANK, N.A.,
                                   as escrow agent

                                   By:
                                      -----------------------------------------
                                   Name:
                                   Its:

                                   SECURITYHOLDER REPRESENTATIVE

                                   --------------------------------------------
                                   Name:  Brett Helm

                                   --------------------------------------------
                                   Name: William Stensrud

                                       10
<PAGE>

                                  CONFIDENTIAL

        [SIGNATURE PAGE TO ESCROW AGREEMENT AMONG INTEL CORPORATION, WCT
         ACQUISITION CORPORATION, IPIVOT, INC., THE ESCROW AGENT AND THE
                          SECURITYHOLDER REPRESENTATIVE]

                                       11
<PAGE>

State of California           )
                              )ss.
                              )

County of__________

On __________, 1999 before me, ____________, a notary public in and for said
County and State, personally appeared [INSERT NAME OF SPARTA SIGNATORY],
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature(s) on the instrument the person, or the entity upon behalf
of which the person acted, executed the instrument.

<PAGE>

                                   SCHEDULE 1

                             ESCROW SECURITY HOLDERS

                                 (SEE ATTACHED)

<PAGE>

                                   SCHEDULE 2

                           AUTHORIZED SIGNATORIES

FOR PARENT:

FOR THE SURVIVING CORPORATION:

<PAGE>

                                    EXHIBIT C

                      IRREVOCABLE PROXY AND VOTING AGREEMENT

                                      C-1

<PAGE>

                                IRREVOCABLE PROXY
                                       AND
                                VOTING AGREEMENT

       THIS IRREVOCABLE PROXY AND VOTING AGREEMENT, dated as of October ___,
1999 (this "Agreement"), is entered into by and between INTEL CORPORATION, a
Delaware corporation ("Parent"), on the one hand, and ________ ("Stockholder"),
on the other hand.

                              W I T N E S S E T H:

       WHEREAS, concurrently herewith, WCT Acquisition Corporation, an indirect
wholly owned subsidiary of Parent ("Acquisition Corporation"), and Ipivot, Inc.,
a Delaware corporation (the "Company"), have entered into an Agreement and Plan
of Merger, of even date herewith (as such agreement may hereafter be amended
from time to time, the "Merger Agreement"; initially capitalized and other terms
used but not defined herein shall have the meanings ascribed to them in the
Merger Agreement), pursuant to which Acquisition Corporation will merge with and
into the Company, with the Company as the surviving corporation and wholly-owned
subsidiary of Parent (the "Merger");

       WHEREAS, Stockholder Beneficially Owns (as defined herein) ________
shares of common stock of the Company ("Company Common Stock"), ________ shares
of Series A Preferred Stock of the Company ("Company Preferred A Stock"), and
________ shares of Series B Preferred Stock of the Company ("Company Preferred
B Stock") (such shares of Company Common Stock, Company Preferred A Stock and
Company Preferred B Stock are collectively referred to herein as the "Shares").

       WHEREAS, as an essential inducement and condition to entering into the
Merger Agreement, Parent and Acquisition Corporation have requested that
Stockholder agree, and Stockholder has agreed, to enter into this Agreement;

       NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

       1.     VOTING AGREEMENT. Stockholder hereby agrees with Parent that, at
any meeting of the Company's stockholders, however called, or in connection with
any written consent of the Company's stockholders, Stockholder shall vote the
Shares Beneficially Owned (as defined below) by Stockholder, whether heretofore
owned or hereafter acquired, (i) in favor of approval of the Merger, the Merger
Agreement and any actions in furtherance of the transactions contemplated
thereby; (ii) against any action or agreement that would result in a breach in
any respect of any representation, warranty, covenant, agreement or obligation
of the

<PAGE>

Company under the Merger Agreement; and (iii) against: (A) any Third Party
Acquisition (as defined below), (B) any change in the individuals who, as of the
date hereof, constitute the Board of Directors of the Company (C) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and any Third Party (as defined
below), (D) a sale, lease, transfer or disposition of any assets of the
Company's business outside the ordinary course of business, or any assets that
are material to its business whether or not in the ordinary course of business,
or a reorganization, recapitalization, dissolution or liquidation of the
Company, (E) other than the two-for-one stock split approved by the Board of
Directors of the Company on September 29, 1999, any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or bylaws, (F) any other material change in the Company's
corporate structure or affecting its business, or (G) any other action that is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone or adversely affect the Merger or any of the other transactions
contemplated by the Merger Agreement, or any of the transactions contemplated by
this Agreement.

              For purposes of this Agreement, "Third Party Acquisition" means
the occurrence of any of the following events: (i) the acquisition of the
Company by merger or otherwise by any person (which includes a "person" as such
term is defined in Section 13(d)(3) of the Exchange Act) other than Parent,
Acquisition Corporation or any affiliate thereof (a "Third Party"); (ii) the
acquisition by a Third Party of any material portion (which shall include,
without limitation, ten percent (10%) or more) of the assets of the Company,
other than the sale of its products in the ordinary course of business
consistent with past practices; (iii) the acquisition by a Third Party of ten
percent (10%) or more of the outstanding Shares; (iv) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend; (v) the repurchase by the Company of more than ten
percent (10%) of the outstanding Shares; or (vi) the acquisition (or any group
of acquisitions) by the Company by merger, purchase of stock or assets, joint
venture or otherwise of a direct or indirect ownership interest or investment in
any business (or businesses) whose annual revenues, net income or assets is
equal to or greater than five percent (5%) of the annual revenues, net income or
assets of the Company, respectively.

              For purposes of this Agreement, "Beneficially Own" or "Beneficial
Ownership" with respect to any securities shall mean Stockholder's having
ownership, control or power to direct the voting with respect to, or otherwise
enables Stockholder to legally act with respect to, such securities as
contemplated hereby, including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Securities Beneficially Owned by
Stockholder shall include securities Beneficially Owned by all other persons
with whom Stockholder would constitute a "group" as within the meaning of
Section 13(d)(3) of the Exchange Act of 1934, as amended (the "Exchange Act").

       2.     IRREVOCABLE PROXY.

              (a)    Stockholder hereby constitutes and appoints Acquisition
Corporation, which shall act by and through Cary L. Klafter and Tiffany Doon
Silva (each, a "Proxy Holder'), individually or jointly, with full power of
substitution, its true and lawful proxy and attorney-in-fact to vote at any
meeting (and any adjournment or postponement thereof) of the Company's

                                       2
<PAGE>

       5.     OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES. Stockholder
hereby represents and warrants to Parent as follows:

              (a)    OWNERSHIP OF SHARES. Stockholder is the Beneficial Owner of
all the Shares. On the date hereof, the Shares constitute all of the Shares
Beneficially Owned by Stockholder. Stockholder has voting power with respect to
the matters set forth in Section 1 hereof with respect to all of the Shares,
with no limitations, qualifications or restrictions on such rights.

              (b)    POWER; BINDING AGREEMENT. Stockholder has the legal
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by Stockholder will not violate any applicable law
or any agreement or any court order to which Stockholder is a party or is
subject including, without limitation, any voting agreement or voting trust.
this agreement has been duly and validly executed and delivered by Stockholder
and constitutes the legal, valid and binding obligation of Stockholder,
enforceable against Stockholder in accordance with its terms.

              (c)    RESTRICTION ON TRANSFER; PROXIES AND NON-INTERFERENCE.
Except as expressly. permitted by this Agreement, Stockholder shall not,
directly or indirectly: (i) offer for sale, sell, transfer, tender, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to or consent to the offer for
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
any or all of the Shares or any interest therein; (ii) grant any proxies or
powers of attorney or deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares; or (iii) take any action that would
make any representation or warranty of Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling Stockholder from
performing any of Stockholder's obligations under this Agreement.

              (d)    OTHER POTENTIAL ACQUIRORS. Stockholder (i) shall
immediately cease any existing discussions or negotiations, if any, with any
persons conducted heretofore with respect to any acquisition of all or any
material portion of the assets of, or any equity interest in, the Company, or
any business combination with the Company; (ii) from and after the date hereof
until the earlier of the termination of the Merger Agreement in accordance with
its terms and the Effective Time, shall not, directly or indirectly, initiate,
solicit or knowingly encourage (including, without limitation, by way of
furnishing any information or assistance), or take any other action to
facilitate knowingly, any inquiries or the making of any Third Party
Acquisition; and (iii) shall promptly notify Parent of any proposals for, or
inquiries with respect to, a potential Third Party Acquisition received by
Stockholder or of which Stockholder otherwise has knowledge.

              (e) RELIANCE BY PARENT AND ACQUISITION CORPORATION. Stockholder
understands and acknowledges that Parent and Acquisition Corporation are
entering into the Merger Agreement in reliance upon Stockholder's execution and
delivery of this Agreement and performance of Stockholder's of Stockholder's
obligations hereunder.

                                       4
<PAGE>

       6.     STOP TRANSFER. Stockholder agrees with, and covenants to, Parent
that Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any Shares, unless such transfer is made pursuant to and in
compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.

       7.     TERMINATION. The proxy granted pursuant to Section 2 hereof and
Stockholder's covenants and agreements contained herein with respect to the
Shares shall terminate upon the earliest to occur of: (a) the termination of the
Merger Agreement in accordance with its terms and (b) the Effective Time.
Nothing set forth herein shall relieve Stockholder of any liability for any
breach of any representation, warranty, covenant, agreement or obligation set
forth in this Agreement arising prior to such termination of this Agreement.

       8.     MISCELLANEOUS.

              (a)    ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

              (b)    CERTAIN EVENTS. Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any person to whom legal or beneficial ownership of any Shares shall pass,
whether by operation of law or otherwise. Notwithstanding any transfer of
Shares, the transferor shall remain liable for the performance of all
obligations under this Agreement of the transferor.

              (c)    ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
party; provided, however, that Parent may, in its sole discretion, assign its
rights and obligations hereunder to any direct or indirect wholly owned
subsidiary of Parent.

              (d)    AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto.

              (e)    NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telecopy, or by
mail (registered or certified mail, postage prepaid, return receipt requested)
or by any nationally-recognized overnight courier service, such as Federal
Express, providing proof of delivery. Any such notice or communication shall be
deemed to have been delivered and received (i) in the case of hand delivery, on
the date of such delivery, (ii) in the case of telecopy, on the date sent if
confirmation of receipt is received and such notice is also promptly mailed by
registered or certified mail (return receipt requested), (iii)

                                       5
<PAGE>

in the case of a nationally-recognized overnight courier service, in
circumstances under which such courier guarantees next business day delivery, on
the next business day after the date when sent, and (iv) the case of mailing on
the third business day following that on which the piece of mail containing such
communication is posted. All communications hereunder shall be delivered to the
respective parties at the following addresses:

If to Stockholder:
                                      -----------------------------------------

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

                                      -----------------------------------------
                                      Telephone:
                                      Telecopier:
                                      Attention:

with a copy to:                       Ipivot, Inc.
                                      12568 Kirkham Court
                                      Poway, CA 92064
                                      Telecopier: (619) 676-6966
                                      Attention: President and Chief Executive
                                      Officer

If to Parent:                         Intel Corporation
                                      2200 Mission College Blvd.
                                      Santa Clara, CA 95052-8119
                                      Telecopier: (408) 765-6284
                                      Attention: General Counsel
                                              and
                                      Intel Corporation
                                      2200 Mission College Blvd.
                                      Santa Clara, CA 95052-8119
                                      Telecopier: (408) 765-6284
                                      Attention: Treasurer

with a copy to:                       Gibson, Dunn & Crutcher LLP
                                      One Montgomery Street
                                      Telesis Tower
                                      San Francisco, California 94104
                                      Telephone: (415) 393-8200
                                      Telecopier: (415) 374-8427
                                      Attention:  Kenneth R. Lamb, Esq.

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the matter set forth above.

                                       6

<PAGE>

              (f)    SEVERABILITY. Whenever possible, each provision of this
Agreement will 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 invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.

              (g)    SPECIFIC PERFORMANCE. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damage for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.

              (h)    NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.

              (i)    GOVERNING LAW.

                     (1)    THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF: The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of Delaware and the Federal courts of the United States
of America located in the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 8(e) in such other manner as may be
permitted by Applicable Law, shall be valid and sufficient service thereof.

                                       7
<PAGE>

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

                     (3)    EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(i).

              (j)    COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.

                                       8
<PAGE>

       IN WITNESS WHEREOF, Parent and Stockholder have caused this Agreement to
be duly executed as of the day and year first above written.

                                                INTEL CORPORATION,
                                                a Delaware corporation

                                                By:
                                                   ----------------------------
                                                   Name:
                                                   Title:

                                                STOCKHOLDER:

                                                By:
                                                   ----------------------------
                                                   Name:

                  [SIGNATURE PAGE FOR IPIVOT/INTEL STOCKHOLDER
                     IRREVOCABLE PROXY AND VOTING AGREEMENT]

<PAGE>

                                    EXHIBIT D

               SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
                DELAWARE CORPORATIONS CODE TITLE 8. CORPORATIONS
                       CHAPTER 1. GENERAL CORPORATION LAW
                     SUBCHAPTER IX. MERGER OR CONSOLIDATION
                     --------------------------------------

<PAGE>

                                  EXHIBIT D

                        SECTION 262 OF THE DELAWARE
                          GENERAL CORPORATION LAW
                         DELAWARE CORPORATIONS CODE
                           TITLE 8. CORPORATIONS
                    CHAPTER 1. GENERAL CORPORATION LAW
                  SUBCHAPTER IX. MERGER OR CONSOLIDATION

SECTION 262. APPRAISAL RIGHTS.

         (a) Any stockholder of a corporation of this State who holds shares
of stock on the date of the making of a demand pursuant to subsection (d) of
this section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing
pursuant to Section 228 of this title shall be entitled to an appraisal by
the Court of Chancery of the fair value of the stockholder's shares of stock
under the circumstances described in subsections (b) and (c) of this section.
As used in this section, the word "stockholder" means a holder of record of
stock in a stock corporation and also a member of record of a nonstock
corporation; the words "stock" and "share" mean and include what is ordinarily
meant by those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock
is deposited with the depository.

         (b) Appraisal rights shall be available for the shares of any class
or series of stock of a constituent corporation in a merger or consolidation
to be effected pursuant to Section 251 (other than a merger effected pursuant
to Section 251(g) of this title), Section 252, Section 254, Section 258,
Section 263 or Section 264 of this title:

         (1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or (ii) held of record by
more than 2,000 holders; and further provided that no appraisal rights shall
be available for any shares of stock of the constituent corporation surviving
a merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in subsection (f) of
Section 251 of this title.

         (2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of any class or
series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant to
Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:

         a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;

         b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by more than 2,000 holders;

         c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or

                                  Exhibit D-1

<PAGE>

         d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts described
in the foregoing subparagraphs a., b. and c. of this paragraph.

         (3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under Section 253 of this title is not
owned by the parent corporation immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Delaware
corporation.

         (c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially
all of the assets of the corporation. If the certificate of incorporation
contains such a provision, the procedures of this section, including those
set forth in subsections (d) and (e) of this section, shall apply as nearly
as is practicable.

         (d) Appraisal rights shall be perfected as follows:

         (1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are
available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or

         (2) If the merger or consolidation was approved pursuant to Section
228 or Section 253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective date
of the merger or consolidation, such notice shall be given by the surviving
or resulting corporation to all such holders of any class or series of stock
of a constituent corporation that are entitled to appraisal rights. Such
notice may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders on
or within 10 days after such effective date; provided, however, that if such
second notice is sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder who
is entitled to appraisal rights and who has demanded appraisal of such
holder's shares in accordance with this subsection. An affidavit of the
secretary or assistant secretary or of the transfer agent of the corporation
that is required to give either notice that such notice has been given shall,
in the absence of fraud, be prima facie evidence of the facts stated therein.
For purposes of determining the stockholders entitled to receive either
notice, each constituent corporation may fix, in advance, a record date that
shall be not more than 10 days prior to the date the notice is given,
provided, that if the notice is given on or after the effective date of the
merger or consolidation, the record date shall be such effective date. If no

                                 Exhibit D-2

<PAGE>

record date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the day
on which the notice is given.

         (e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation. Within 120 days after the effective
date of the merger or consolidation, any stockholder who has complied with
the requirements of subsections (a) and (d) hereof, upon written request,
shall be entitled to receive from the corporation surviving the merger or
resulting from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or consolidation and with
respect to which demands for appraisal have been received and the aggregate
number of holders of such shares. Such written statement shall be mailed to
the stockholder within 10 days after such stockholder's written request for
such a statement is received by the surviving or resulting corporation or
within 10 days after expiration of the period for delivery of demands for
appraisal under subsection (d) hereof, whichever is later.

         (f) Upon the filing of any such petition by a stockholder, service
of a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown on the list
at the addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail
and by publication shall be approved by the Court, and the costs thereof
shall be borne by the surviving or resulting corporation.

         (g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with such direction, the Court may dismiss the
proceedings as to such stockholder.

         (h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. In determining such
fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting corporation or by
any stockholder entitled to participate in the appraisal proceeding, the
Court may, in its discretion, permit discovery or other pretrial proceedings
and may proceed to trial upon the appraisal prior to the final determination
of the stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting corporation pursuant
to subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this section.

         (i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the surrender
to the corporation of the

                                Exhibit D-3

<PAGE>

certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such
surviving or resulting corporation be a corporation of this State or of any
state.

         (j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

         (k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights as provided
in subsection (d) of this section shall be entitled to vote such stock for
any purpose or to receive payment of dividends or other distributions on the
stock (except dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the merger or
consolidation); provided, however, that if no petition for an appraisal shall
be filed within the time provided in subsection (e) of this section, or if
such stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e)
of this section or thereafter with the written approval of the corporation,
then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court
deems just.

         (l) The shares of the surviving or resulting corporation to which
the shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.

                                Exhibit D-4

<PAGE>

                                      EXHIBIT E

                       CORPORATIONS CODE TITLE 1. CORPORATIONS
                         DIVISION 1. GENERAL CORPORATION LAW
                           CHAPTER 13. DISSENTER'S RIGHTS

<PAGE>

                                    EXHIBIT E

                                 CORPORATIONS CODE
                               TITLE 1. CORPORATIONS
                         DIVISION 1. GENERAL CORPORATION LAW
                           CHAPTER 13. DISSENTER'S RIGHTS

SECTION 1300. REORGANIZATION OR SHORT-FORM MERGER; DISSENTING SHARES;
              CORPORATE PURCHASE AT FAIR MARKET VALUE; DEFINITIONS

              (a) If the approval of the outstanding shares (Section 152) of
a corporation is required for a reorganization under subdivisions (a) and (b)
or subdivision (e) or (f) of Section 1201, each shareholder of the
corporation entitled to vote on the transaction and each shareholder of a
subsidiary corporation in a short-form merger may, by complying with this
chapter, require the corporation in which the shareholder holds shares to
purchase for cash at their fair market value the shares owned by the
shareholder which are dissenting shares as defined in subdivision (b). The
fair market value shall be determined as of the day before the first
announcement of the terms of the proposed reorganization or short-form
merger, excluding any appreciation or depreciation in consequence of the
proposed action, but adjusted for any stock split, reverse stock split, or
share dividend which becomes effective thereafter.

              (b) As used in this chapter, "dissenting shares" means shares
which come within all of the following descriptions:

              (1) Which were not immediately prior to the reorganization or
short-form merger either (A) listed on any national securities exchange
certified by the Commissioner of Corporations under subdivision (O) of
Section 25100 or (B) listed on the list of OTC margin stocks issued by the
Board of Governors of the Federal Reserve System, and the notice of meeting
of shareholders to act upon the reorganization summarizes this section and
Section 1301, 1302, 1303, and 1304; provided, however, that this provision
does not apply to any shares with respect to which there exists any
restriction on transfer imposed by the corporation or by any law or
regulation; and provided, further, that this provision does not apply to any
class of shares described in subparagraph (A) or (B) if demands for payment
are filed with respect to 5 percent or more of the outstanding shares of that
class.

              (2) Which were outstanding on the date for the determination of
shareholders entitled to vote on the reorganization and (A) were not voted in
favor of the reorganization or, (B) if described in subparagraph (A) or (B)
of paragraph (1) (without regard to the provisos in that paragraph), were
voted against the reorganization, or which were held of record on the
effective date of a short-form merger; provided, however, that subparagraph
(A) rather than subparagraph (B) of this paragraph applies in any case where
the approval required by Section 1201 is sought by written consent rather
than at a meeting.

              (3) Which the dissenting shareholder has demanded that the
corporation purchase at their fair market value, in accordance with
Section 1301.

              (4) Which the dissenting shareholder has submitted for
endorsement, in accordance with Section 1302.

              (c) As used in this chapter, "dissenting shareholder" means the
recordholder of dissenting shares and includes a transferee of record.

                                      E-1

<PAGE>

SECTION 1301. NOTICE TO HOLDERS OF DISSENTING SHARES IN REORGANIZATIONS;
              DEMAND FOR PURCHASE; TIME; CONTENTS

              (a) If, in the case of a reorganization, any shareholders of a
corporation have a right under Section 1300, subject to compliance with
paragraphs (3) and (4) of subdivision (b) thereof, to require the
corporation to purchase their shares for cash, such corporation shall mail to
each such shareholder a notice of the approval of the reorganization by its
outstanding shares (Section 152) within 10 days after the date of such
approval, accompanied by a copy of Sections 1300, 1303, 1304 and this section,
a statement of the price determined by the corporation to represent the fair
market value of the dissenting shares, and a brief description of the
procedure to be followed if the shareholder desires to exercise the
shareholder's right under such sections. The statement of price constitutes
an offer by the corporation to purchase at the price stated any dissenting
shares as defined in subdivision (b) of Section 1300, unless they lose their
status as dissenting shares under Section 1309.

              (b) Any shareholder who has a right to require the corporation
to purchase the shareholder's shares for cash under Section 1300, subject to
compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who
desires the corporation to purchase such shares shall make written demand
upon the corporation for the purchase of such shares and payment to the
shareholder in cash of their fair market value. The demand is not effective
for any purpose unless it is received by the corporation or any transfer
agent thereof (1) in the case of shares described in clause (i) or (ii) of
paragraph (1) of subdivision (b) of Section 1300 (without regard to the
provisos in that paragraph), not later than the date of the shareholders'
meeting to vote upon the reorganization, or (2) in any other case within 30 days
after the date on which the notice of the approval by the outstanding shares
pursuant to subdivision (a) or the notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder.

              (c) The demand shall state the number and class of the shares
held of record by the shareholder which the shareholder demands that the
corporation purchase and shall contain a statement of what such shareholder
claims to be the fair market value of those shares as of the day before the
announcement of the proposed reorganization or short-form merger. The
statement of fair market value constitutes an offer by the shareholder to
sell the shares at such price.

SECTION 1302. SUBMISSION OF SHARE CERTIFICATES FOR ENDORSEMENT;
              UNCERTIFICATED SECURITIES

              Within 30 days after the date on which notice of the approval
by the outstanding shares or the notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder, the shareholder shall submit to
the corporation at its principal office or at the office of any transfer agent
thereof, (a) if the shares are certificated securities, the shareholder's
certificates representing any shares which the shareholder demands that the
corporation purchase, to be stamped or endorsed with a statement that the
shares are dissenting shares or to be exchanged for certificates of appropriate
denomination so stamped or endorsed or (b) if the shares are uncertificated
securities, written notice of the number of shares which the shareholder demands
that the corporation purchase. Upon subsequent transfers of the dissenting
shares on the books of the corporation, the new certificates, initial
transaction statement, and other written statements issued therefor shall bear
a like statement, together with the name of the original dissenting holder of
the shares.

SECTION 1303. PAYMENT OF AGREED PRICE WITH INTEREST; AGREEMENT FIXING FAIR
              MARKET VALUE; FILING; TIME OF PAYMENT

              (a) If the corporation and the shareholder agree that the
shares are dissenting shares and agree upon the price of the shares, the
dissenting shareholder is entitled to the agreed price with interest thereon
at the legal rate on judgements from the date of the agreement. Any
agreements fixing the fair market value of any dissenting shares as between
the corporation and the holders thereof shall be filed with the secretary of
the corporation.

              (b) Subject to the provisions of Section 1306, payment of the
fair market value of dissenting shares shall be made within 30 days after the
amount thereof has been agreed or within 30 days after any statutory or
contractual conditions to the reorganization are satisfied, whichever is
later, and in the case of certificated securities, subject to surrender of
the certificates therefor, unless provided otherwise by agreement.

                                     E-2

<PAGE>

SECTION 1304. ACTION TO DETERMINE WHETHER SHARES ARE DISSENTING SHARES OR
              FAIR MARKET VALUE; LIMITATION; JOINDER; CONSOLIDATION;
              DETERMINATION OF ISSUES; APPOINTMENT OF APPRAISERS

              (a) If the corporation denies that the shares are dissenting
shares, or the corporation and the shareholder fail to agree upon the fair
market value of the shares, then the shareholder demanding purchase of such
shares as dissenting shares or any interested corporation, within six months
after the date on which notice of the approval by the outstanding shares
(Section 152) or notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder, but not thereafter, may file a complaint in the
superior court of the proper county praying the court to determine whether
the shares are dissenting shares or the fair market value of the dissenting
shares or both or may intervene in any action pending on such a complaint.

              (b) Two or more dissenting shareholders may join as plaintiffs
or be joined as defendants in any such action and two or more such actions
may be consolidated.

              (c) On the trial of the action, the court shall determine the
issues. If the status of the shares as dissenting shares is in issue, the
court shall first determine that issue. If the fair market value of the
dissenting shares is in issue, the court shall determine, or shall appoint
one or more impartial appraisers to determine, the fair market value of the
shares.

                                     E-3

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