{"id":43102,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-oracle-corp-and-concentra-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-oracle-corp-and-concentra-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-oracle-corp-and-concentra-corp.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Oracle Corp. and Concentra Corp."},"content":{"rendered":"<pre>\n                          AGREEMENT AND PLAN OF MERGER\n                          ----------------------------\n                                        \n\n     THIS AGREEMENT AND PLAN OF MERGER (this \"Agreement\"), dated as of November\n                                              ---------                        \n10, 1998, is entered into by and among Oracle Corporation, a Delaware\ncorporation (\"Parent\"), KL Acquisition Corporation, a Delaware corporation and a\n              ------                                                            \nwholly owned subsidiary of Parent (the \"Purchaser\"), and Concentra Corporation,\n                                        ---------                              \na Delaware corporation (the \"Company\").\n                             -------   \n\n                                    RECITALS\n                                    --------\n\n     A.  The respective Boards of Directors of the Company, Parent and the\nPurchaser have approved the acquisition of the Company by the Purchaser and, in\nfurtherance of such acquisition, Parent proposes to cause the Purchaser to make\na cash tender offer (the \"Offer\") for all of the outstanding shares (the\n                          -----                                         \n\"Shares\") of Common Stock of the Company, par value $0.00001 per share (the\n ------                                                                    \n\"Company Common Stock\"), on the terms specified herein.\n---------------------                                  \n\n     B.  The Board of Directors of the Company has approved the Offer and\nrecommended that it be accepted by the stockholders of the Company.\n\n     C.  The Boards of Directors of the Company and the Purchaser deem it\nadvisable and in the best interests of the stockholders of such corporations to\neffect the merger (the \"Merger\") of the Purchaser with and into the Company\n                        ------                                             \nfollowing the consummation of the Offer, all pursuant to this Agreement and in\naccordance with the Delaware General Corporation Law (the \"DGCL\").\n                                                           ----   \n\n     D.  As a condition and inducement to Parent's and the Purchaser's\nwillingness to enter into this Agreement, upon the execution and delivery of\nthis Agreement (i) San Giorgio S.A., Special Situations Fund III, L.P., Special\nSituations Private Equity Fund, L.P., Special Situations Cayman Fund, L.P.,\nSpecial Situations Technology Fund, L.P., Lawrence W. Rosenfeld (individually\nand as trustee), Toyo Corporation, and Stephen J. Cucchiaro are simultaneously\nentering into and delivering support agreements (the \"Support Agreements\") in\n                                                      ------------------     \nthe form attached hereto as Annex II, and (ii) directors with options under the\n1994 Directors' Stock Option Plan are simultaneously entering into and\ndelivering option termination agreements (the \"Director Option Termination\n                                               ---------------------------\nAgreements\") in the form attached hereto as Annex III.\n----------                                            \n\n     The parties hereby agree as follows:\n\n                                   ARTICLE I\n\n                                   THE OFFER\n\n     1.1  The Offer.\n          ---------\n \n          (a) Subject to the provisions of this Agreement and provided that\nnothing shall have occurred that would result in a failure to satisfy any of the\nconditions set forth\n\n\n \nin Annex I hereto (the \"Offer Conditions\"), Parent shall cause the Purchaser\n   -------                                              \nto, as promptly as reasonably practicable after the date hereof, but in no\nevent later than five (5) business days following the initial public\nannouncement of the Purchaser's intention to commence the Offer, commence\n(within the meaning of Rule 14d-2(a) under the Securities Exchange Act of 1934,\nas amended (the \"Exchange Act\")), the Offer for all of the outstanding Shares\n                 ------------                                                \nand the associated Series A Participating Cumulative Preferred Stock purchase\nrights (collectively, the \"Rights\") issued pursuant to the Rights Agreement\n                           ------                                          \nbetween the Company and First National Bank of Boston, as Rights agent, dated as\nof April 24, 1997 (the \"Rights Agreement\"), at a price of $7.00 per Share (and\n                        ----------------                                      \nassociated Rights), net to the seller in cash.  The obligation of the Purchaser\nto accept for payment and to pay for any Shares (and associated Rights) tendered\nshall be subject only (i) to such number of Shares, when added to the number of\nShares already owned by Parent, the Purchaser or any direct or indirect wholly\nowned subsidiary of Parent, as shall constitute fifty-one percent (51%) of the\nCompany's Fully Diluted Shares (as defined in Section 4.2) being validly\ntendered prior to the expiration or termination of the Offer and not withdrawn\n(the \"Minimum Share Condition\") and (ii) to the other Offer Conditions.  The\n      -----------------------                                               \nPurchaser may at any time transfer or assign to one or more corporations\ndirectly or indirectly wholly owned by Parent the right to purchase all or any\nportion of the Shares (and associated Rights) tendered pursuant to the Offer\n(the \"Tendered Shares\"), but no such assignment shall relieve the Purchaser of\n      ---------------                                                         \nits obligations hereunder.  The Purchaser expressly reserves the right to waive\nany of the Offer Conditions (but not the Minimum Share Condition) and to modify\nthe terms of the Offer; provided, however, that, without the prior written\n                        --------  -------                                 \nconsent of the Company, the Purchaser shall not amend or modify the terms of the\nOffer to (i) reduce the cash price to be paid pursuant to the Offer, (ii) reduce\nthe number of Shares (and associated Rights) as to which the Offer is made,\n(iii) change the form of consideration to be paid in the Offer, or (iv) impose\nconditions to the Offer in addition to the Offer Conditions or modify the Offer\nConditions (other than to waive any Offer Condition to the extent permitted by\nthis Agreement), or (v) make any other change or modification in any of the\nterms of the Offer in any manner that is adverse to holders of the Shares.\nSubject to the terms and conditions thereof, the Offer shall expire at midnight,\nNew York City time, on the date that shall be 20 business days after the date on\nwhich the Offer shall be commenced.  The Offer may not be extended without the\nCompany's prior written consent; provided, however, that the Purchaser may (x)\n                                 --------  -------                            \nfrom time to time extend (and re-extend) the Offer, if at the scheduled\nexpiration date of the Offer any of the Offer Conditions (other than the Minimum\nShare Condition) shall not have been satisfied or waived, until such time as\nsuch conditions shall be satisfied or waived; (y) extend the Offer for any\nperiod required by any rule, regulation, interpretation or position of the\nSecurities and Exchange Commission (the \"SEC\") or the staff thereof applicable \n                                         ---  \nto the Offer; or (z) extend (and re-extend) the Offer for any reason on one or\nmore occasions for an aggregate period of not more than twenty (20) business\ndays beyond the latest expiration date that would otherwise be permitted under\nclause (x) or (y) above if on such expiration date there shall not have been\ntendered at least that number of Shares (and associated Rights) necessary to\npermit the Merger to be effected without a meeting of the Company's stockholders\nin accordance with the DGCL.\n\n          (b) As soon as reasonably practicable on the date of commencement of\nthe Offer, the Purchaser shall file with the SEC a Tender Offer Statement on\nSchedule 14D-1 (together with all amendments and supplements thereto, the\n\"Schedule 14D-1\") with respect to\n---------------                                                               \n\n                                      -2-\n\n\n \nthe Offer.  The Schedule 14D-1 shall contain or shall incorporate by reference\nan offer to purchase and a related letter of transmittal and summary\nadvertisement (such Schedule 14D-1 and Offer to Purchase and the documents\nincluded therein or incorporated therein by reference pursuant to which the\nOffer shall be made, together with any supplements or amendments thereto, the\n\"Offer Documents\").  Parent and the Purchaser agree that the Offer Documents \n ---------------                                                  \nshall comply as to form in all material respects with the Exchange Act and the\nrules and regulations promulgated thereunder and, on the date filed with the\nSEC and on the date first published, sent or given to the Company's\nstockholders, shall not contain any untrue statement of a material fact or omit\nto state any material fact required to be stated therein or necessary in order\nto make the statements therein, in light of the circumstances under which they\nwere made, not misleading, except that no representation is made by Parent or\nthe Purchaser with respect to information supplied by the Company or any of its\nrepresentatives which is included in the Offer Documents.  Each of Parent, the\nPurchaser and the Company agrees to correct promptly any information provided\nby it for use in the Offer Documents if and to the extent that such information\nshall have become false or misleading in any material respect, and each of\nParent and the Purchaser further agrees to take all steps necessary to amend or\nsupplement the Offer Documents and to cause the Offer Documents as so amended or\nsupplemented to be filed with the SEC and to be disseminated to the Company's\nstockholders, in each case as and to the extent required by applicable federal\nsecurities laws.  The Company and its counsel shall be given a reasonable\nopportunity to review the Offer Documents and all amendments and supplements\nthereto prior to their filing with the SEC or dissemination to stockholders of\nthe Company.  Parent and the Purchaser agree to provide the Company and its\ncounsel any comments Parent, the Purchaser or their counsel may receive from the\nSEC or its staff with respect to the Offer Documents promptly after the receipt\nof such comments.\n\n          (c) Subject to the terms and conditions of the Offer and of this\nAgreement, the Purchaser shall, and the Parent shall cause the Purchaser to,\naccept for payment and pay for all Shares (and associated Rights) which have\nbeen validly tendered and not withdrawn pursuant to the Offer as promptly as\npracticable following expiration of the Offer.\n\n     1.2  Company Action.\n          --------------\n \n          (a) The Company hereby approves of and consents to the Offer and\nrepresents that at a meeting duly called and held the Board of Directors of the\nCompany has (i) by unanimous vote of all directors present and voting, approved\nand adopted this Agreement and the transactions contemplated hereby and\ndetermined that the Offer and the Merger are in the best interests of the\nCompany and its stockholders and on terms that are fair to such stockholders,\n(ii) by unanimous vote of all directors present and voting, amended the Rights\nAgreement to make the Rights Agreement inapplicable to the Offer, the Merger,\nthe Company Stock Option (as defined in Section 5.5), this Agreement, the\nSupport Agreements, the Director Option Termination Agreements and any other\ntransaction contemplated hereby and thereby, and determined that such amendment\nto the Rights Agreement is in the best interests of the Company and its\nstockholders, and (iii) recommended that the Company's stockholders accept the\nOffer and tender all of their Shares (and associated Rights) in connection\ntherewith and, if required under the DGCL, approve this Agreement and the\ntransactions contemplated hereby (it being\n\n                                      -3-\n\n\n \nunderstood that, notwithstanding anything in this Agreement to the contrary, if\nthe Company's Board of Directors modifies or withdraws its recommendation in\naccordance with the terms of Section 5.3(b), such modification or withdrawal\nshall not constitute a breach of this Agreement).  The Company represents that\nits Board of Directors has received the written opinion of Volpe Brown Whelan &amp; Company LLC (its \"Financial Advisor\") that the consideration to be received \n                  -----------------  \nby the holders (other than Parent and the Purchaser) of Shares (and associated\nRights) pursuant to each of the Offer and the Merger is fair to such holders\nfrom a financial point of view, and that a complete and correct signed copy of\nsuch opinion has been delivered on or prior to the date hereof by the Company\nto Parent.  The Company hereby consents to the inclusion in the Offer Documents\nof the recommendation of the Company's Board of Directors described in the\nimmediately preceding sentence (subject to the right of the Board of Directors\nto modify or withdraw such recommendation in accordance with Section 5.3(b)). \nThe Company represents that it has been authorized by its Financial Advisor to\npermit, subject to the prior review by its Financial Advisor, the inclusion of\nthe fairness opinion (and a description thereof) in the Offer Documents, the\nSchedule 14D-9 (as defined in Section 1.2(b)) and the Proxy Statement (as\ndefined in Section 4.6).\n\n          (b) As soon as reasonably practicable on the date of commencement of\nthe Offer, the Company shall file with the SEC a Solicitation\/Recommendation\nStatement on Schedule 14D-9 with respect to the Offer (together with all\namendments and supplements thereto, the \"Schedule 14D-9\") containing the\n                                         --------------                 \nrecommendation of the Company's Board of Directors described above in Section\n1.2(a) (subject to the right of the Board of Directors to modify or withdraw\nsuch recommendation in accordance with Section 5.3(b)) and shall mail the\nSchedule 14D-9 to the stockholders of the Company.  The Company agrees that the\nSchedule 14D-9 shall comply as to form in all material respects with the\nrequirements of the Exchange Act and the rules and regulations promulgated\nthereunder and, on the date filed with the SEC and on the date first published,\nsent or given to the Company's stockholders, shall not contain any untrue\nstatement of a material fact or omit to state any material fact required to be\nstated therein or necessary in order to make the statements therein, in light of\nthe circumstances under which they were made, not misleading, except that no\nrepresentation is made by the Company with respect to information supplied by\nParent or the Purchaser or any of their respective representatives which is\nincluded in the Schedule 14D-9.  Each of the Company, Parent and the Purchaser\nagrees to correct promptly any information provided by it for use in the\nSchedule  14D-9 if and to the extent that such information shall have become\nfalse or misleading in any material respect, and the Company further agrees to\ntake all steps necessary to amend or supplement the Schedule 14D-9 and to cause\nthe Schedule 14D-9 as so amended or supplemented to be filed with the SEC and\ndisseminated to the Company's stockholders, in each case as and to the extent\nrequired by applicable federal securities laws.  Parent and its counsel shall be\ngiven a reasonable opportunity to review the Schedule 14D-9 and all amendments\nand supplements thereto prior to their filing with the SEC or dissemination to\nstockholders of the Company.  The Company agrees to provide Parent and its\ncounsel with any comments the Company or its counsel may receive from the SEC or\nits staff with respect to the Schedule 14D-9 promptly after the receipt of such\ncomments.\n \n\n                                      -4-\n\n\n \n          (c) In connection with the Offer, the Company shall, or shall cause\nits transfer agent to, furnish the Purchaser promptly with mailing labels\ncontaining the names and addresses of the record holders of Company Common Stock\nas of a recent date and of those persons becoming record holders subsequent to\nsuch date, together with copies of all lists of stockholders, security position\nlistings and computer files and all other information in the Company's\npossession or control regarding the beneficial owners of Company Common Stock,\nand shall furnish to the Purchaser such information and assistance (including\nupdated lists of stockholders, security position listings and computer files) as\nthe Purchaser may reasonably request in communicating the Offer to the Company's\nstockholders.  Subject to the requirements of applicable law, and except for\nsuch steps as are necessary to disseminate the Offer Documents and any other\ndocuments necessary to consummate the Offer or the Merger, Parent and the\nPurchaser and their agents shall hold in confidence the information contained in\nany such labels, listings and files, will use such information only in\nconnection with the Offer and the other transactions contemplated hereby and, if\nthis Agreement shall be terminated, will deliver, and will use their reasonable\nefforts to cause their agents to deliver, to the Company all copies of such\ninformation then in their possession or control.\n\n     1.3  Directors.\n          ---------\n \n          (a) Promptly upon the purchase by the Purchaser of Shares (and\nassociated Rights) in the Offer, and from time to time thereafter, the Purchaser\nshall be entitled to designate that number of directors, rounded up to the next\nwhole number, on the Company's Board of Directors that equals the product of (i)\nthe total number of directors on the Company's Board of Directors (giving effect\nto the election of any additional directors pursuant to this Section 1.3) and\n(ii) the percentage that the number of Shares owned by the Purchaser, Parent and\nany direct or indirect wholly owned subsidiary of Parent (including Shares (and\nassociated Rights) purchased in the Offer) bears to the total number of Shares\n(and associated Rights) outstanding at such time, and to effect the foregoing\nthe Company shall upon request by the Purchaser, at the Company's election,\neither increase the number of directors comprising the Company's Board of\nDirectors or obtain and accept resignations of incumbent directors.  The first\ndate on which designees of the Purchaser shall constitute a majority of the\nCompany's Board of Directors is referred to in this Agreement as the \"Cut-Off\n                                                                      -------\nDate.\" At such time, the Company will cause individuals designated by the\n----                                                                     \nPurchaser to constitute the same percentage as such individuals represent on the\nCompany's Board of Directors of  (x) each committee of the Board, (y) if\nrequested by Purchaser, each board of directors or other governing body of each\nSubsidiary of the Company, and (z) if requested by Purchaser, each committee of\neach such board or governing body.\n\n          (b) The Company shall promptly take all actions required pursuant to\nSection 14(f) and Rule 14f-1 of the Exchange Act in order to fulfill its\nobligations under this Section 1.3 and shall include in the Schedule 14D-9 such\ninformation with respect to the Company and its officers and directors as is\nrequired under Section 14(f) and Rule 14f-1 to fulfill such obligations.  The\nPurchaser will supply to the Company any information with respect to itself and\nits nominees, officers, directors and affiliates required by Section 14(f) and\nRule 14f-1.\n\n                                      -5-\n\n\n \n          (c) Following the Cut-Off Date and prior to the Effective Time (as\ndefined below), if the Company shall have at least one director who is neither\nan employee of the Company or any of its Subsidiaries nor otherwise affiliated\nwith the Purchaser (one or more of such directors, the \"Independent Directors\"),\n                                                        ---------------------   \nany amendment of this Agreement or the Certificate of Incorporation or Bylaws of\nthe Company or any of its Subsidiaries, any termination or amendment of this\nAgreement by the Company, any extension by the Company of the time for the\nperformance of any of the obligations or other acts of Parent or the Purchaser\nor any exercise or waiver of any of the Company's rights hereunder, will require\nthe concurrence of a majority of the Independent Directors.\n\n                                   ARTICLE II\n\n                                   THE MERGER\n\n     2.1  Merger.\n          ------\n \n          (a) At the Effective Time (as defined in Section 2.1(b) below) and\nsubject to the terms and conditions hereof and the provisions of the DGCL, the\nPurchaser will be merged with and into the Company in accordance with the DGCL,\nthe separate existence of the Purchaser shall thereupon cease and the Company\nshall continue as the surviving corporation (the \"Surviving Corporation\").  The\n                                                  ---------------------        \nPurchaser and the Company are sometimes hereinafter referred to collectively as\nthe \"Constituent Corporations.\"\n     ------------------------  \n\n          (b) Subject to the terms and conditions hereof, the Merger shall be\nconsummated as promptly as practicable after the completion of the Offer and the\nStockholders' Meeting (as defined in Section 5.2), if any, by duly filing a\ncertificate of merger, in such form as is required by, and executed in\naccordance with, the relevant provisions of the DGCL.  The Merger shall be\neffective at such time as the certificate of merger is duly filed with the\nSecretary of State of the State of Delaware in accordance with the DGCL or at\nsuch later time as is specified in the certificate of merger (the \"Effective\n                                                                   ---------\nTime\").  Prior to such filing, a closing shall take place at the offices of\n----                                                                       \nVenture Law Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park,\nCalifornia, or at such other place as the parties shall agree, for the purpose\nof confirming the satisfaction or waiver of the conditions contained in Article\nVII hereof.  The date on which such closing shall occur is referred to herein as\nthe \"Closing Date.\"\n     ------------  \n\n          (c) The separate corporate existence of the Company, as the Surviving\nCorporation, with all its purposes, objects, rights, privileges, powers,\ncertificates and franchises, shall continue unimpaired by the Merger.  The\nSurviving Corporation shall succeed to all the properties and assets of the\nConstituent Corporations and to all debts, choses in action and other interests\ndue or belonging to the Constituent Corporations and shall be subject to and\nresponsible for all the debts, liabilities and duties of the Constituent\nCorporations with the effect set forth in Section 259 of the DGCL.\n\n     2.2  Conversion of Shares.  At the Effective Time and by virtue of the\n          --------------------  \nMerger and without any action on the part of the holders of the capital stock\nof the Constituent Corporations:\n \n\n                                      -6-\n\n\n \n          (a) Each Share (and associated Rights) issued and outstanding\nimmediately prior to the Effective Time (other than (i) Shares to be canceled\npursuant to Section 2.2(b) below, and (ii) Dissenting Shares (as defined in\nSection 2.4)) shall be converted into the right to receive in cash an amount per\nShare equal to the highest price paid per Share pursuant to the Offer (the\n\"Merger Price\");\n-------------   \n\n          (b) Each Share (and associated Rights) held in the treasury of the\nCompany and each Share (and associated Rights) owned by Parent, the Purchaser or\nthe Company, or by any direct or indirect wholly owned subsidiary of any of\nthem, shall be canceled and retired without payment of any consideration\ntherefor; and\n\n          (c) Each share of common stock, par value $0.001 per share, of the\nPurchaser issued and outstanding immediately prior to the Effective Time shall\nbe converted into one validly issued, fully paid and nonassessable share of\ncommon stock, par value $0.00001 per share, of the Surviving Corporation.\n\n     2.3  Exchange of Certificates.\n          ------------------------\n \n          (a) From and after the Effective Time, a bank or trust company to be\ndesignated by Parent shall act as exchange agent (the \"Exchange Agent\") in\n                                                       --------------     \neffecting the exchange of the Merger Price for certificates which prior to the\nEffective Time represented Shares (and associated Rights) and which as of the\nEffective Time represent the right to receive the Merger Price (the\n\"Certificates\").  Promptly after the Effective Time, the Exchange Agent shall\n-------------                                                                \nmail to each record holder of Certificates a form of letter of transmittal and\ninstructions for use in surrendering such Certificates and receiving the Merger\nPrice therefor in a form approved by Parent and the Company.  At or prior to the\nEffective Time, the Purchaser shall deposit in trust with the Exchange Agent\nimmediately available funds in an amount sufficient to pay the Merger Price for\nall such Shares (and associated Rights) to the Company's stockholders as\ncontemplated by this Section 2.3.  Upon the surrender of each Certificate and\nthe issuance and delivery by the Exchange Agent of the Merger Price for the\nShares (and associated Rights) represented thereby in exchange therefor, the\nCertificate shall forthwith be canceled.  Until so surrendered and exchanged,\neach Certificate shall represent solely the right to receive the Merger Price\nfor the Shares (and associated Rights) represented thereby, without any interest\nthereon.  Upon the surrender and exchange of such an outstanding Certificate,\nthe holder thereof shall receive the Merger Price multiplied by the number of\nShares (and associated Rights) represented by such Certificate, without any\ninterest thereon.  If any cash is to be paid to a name other than that in which\nthe Certificate surrendered in exchange therefor is registered, it shall be a\ncondition to such payment or exchange that the person requesting such payment or\nexchange shall pay to the Exchange Agent any transfer or other taxes required by\nreason of the payment of such cash to a name other than that of the registered\nholder of the Certificate surrendered, or such person shall establish to the\nsatisfaction of the Exchange Agent that such tax has been paid or is not\napplicable.  Notwithstanding the foregoing, neither the Exchange Agent nor any\nparty hereto shall be liable to a holder of Certificates for any part of the\nMerger Price payments made to a public official pursuant to applicable abandoned\nproperty, escheat or similar laws.\n \n\n                                      -7-\n\n\n \n          (b) Promptly following the sixth month after the Effective Time, the\nExchange Agent shall return to the Surviving Corporation all cash relating to\nthe transactions described in this Agreement, and the Exchange Agent's duties\nshall terminate.  Thereafter, each holder of a Certificate may surrender such\nCertificate to the Surviving Corporation and (subject to applicable abandoned\nproperty, escheat and similar laws) receive in exchange therefor the Merger\nPrice for such Shares (and associated Rights), without any interest thereon, but\nshall have no greater rights against the Surviving Corporation than may be\naccorded to general creditors of the Surviving Corporation under applicable law.\nAt and after the Effective Time, holders of Certificates shall cease to have any\nrights as stockholders of the Company except for the right to surrender such\nCertificates in exchange for the Merger Price for such Shares (and associated\nRights) or to perfect their right of appraisal with respect to their Shares (and\nassociated Rights) pursuant to the applicable provisions of the DGCL and Section\n2.4 below, and there shall be no transfers on the stock transfer books of the\nCompany or the Surviving Corporation of any Shares (and associated Rights) that\nwere outstanding immediately prior to the Merger.\n\n     2.4  Dissenting Shares.\n          -----------------\n \n          (a) Notwithstanding the provisions of Section 2.2 or any other\nprovision of this Agreement to the contrary, Shares (and associated Rights) that\nare issued and outstanding immediately prior to the Effective Time and are held\nby stockholders who shall have properly demanded appraisal of such Shares (and\nassociated Rights) in accordance with the DGCL (\"Dissenting Shares\") shall not\n                                                 -----------------            \nbe converted into the right to receive the Merger Price at the Effective Time,\nunless and until the holder of such Dissenting Shares shall have failed to\nperfect or shall have effectively withdrawn or lost such right to appraisal and\npayment under the DGCL.  If a holder of Dissenting Shares (a \"Dissenting\n                                                              ----------\nStockholder\") shall have so failed to perfect or shall have effectively\n-----------                                                            \nwithdrawn or lost such right to appraisal and payment, then, as of the Effective\nTime or the occurrence of such event, whichever last occurs, such Dissenting\nShares shall be converted into and represent solely the right to receive the\nMerger Price, without any interest thereon, as provided in Section 2.2.\n\n          (b) The Company shall give Parent (i) prompt notice of any written\ndemands for appraisal, withdrawals of demands for appraisal and any other\ninstruments served pursuant to Section 262 of the DGCL and received by the\nCompany, and (ii) the opportunity to control all negotiations and proceedings\nwith respect to such demands for appraisal.  The Company shall not, except with\nthe prior written consent of Parent, make any payment with respect to any\ndemands for appraisal or settle or offer to settle any such demands.\n\n     2.5  Certificate of Incorporation and Bylaws of the Surviving Corporation.\n          --------------------------------------------------------------------\n \n          (a) At the Effective Time the Certificate of Incorporation of the\nPurchaser, as in effect immediately prior to the Effective Time, shall be the\nCertificate of Incorporation of the Surviving Corporation until thereafter\namended as provided by law and such Certificate of Incorporation; provided,\n                                                                  -------- \nhowever, that Article I of the Certificate of Incorporation of the Surviving\n-------                                                                     \nCorporation shall be amended to read as follows:  \"The name of the corporation\nis Concentra Corporation.\"\n\n                                      -8-\n\n\n \n          (b) At the Effective Time the Bylaws of the Purchaser, as in effect\nimmediately prior to the Effective Time, shall be the Bylaws of the Surviving\nCorporation until thereafter amended as provided by law, the Certificate of\nIncorporation of the Surviving Corporation or such Bylaws.\n\n     2.6  Directors and Officers of the Surviving Corporation. At the Effective \n          ---------------------------------------------------  \nTime, the directors of the Purchaser immediately prior to the Effective Time\nshall become the directors of the Surviving Corporation, each of such directors\nto hold office, subject to the applicable provisions of the Certificate of\nIncorporation and Bylaws of the Surviving Corporation, until the next annual\nstockholders' meeting of the Surviving Corporation and until their successors\nshall be duly elected or appointed and qualified.  At the Effective Time, the\nofficers of the Purchaser immediately prior to the Effective Time shall become\nthe officers of the Surviving Corporation until their respective successors are\nduly elected or appointed and qualified.\n \n \n     2.7  Warrants.  Parent shall not assume or continue any outstanding \n          --------  \nwarrants to purchase shares of Company Common Stock (the \"Warrants\").  The\n                                                          --------\nparties hereto shall take all appropriate action to provide that, at and\nfollowing the Effective Time, each holder of an outstanding Warrant shall be\nentitled to receive an amount in cash equal to the product of (i) the excess,\nif any, of the Merger Price over the per share exercise price of such Warrant\nand (ii) the number of Shares subject to such Warrant which are exercisable\nimmediately prior to the Effective Time.\n \n \n     2.8  Options.  The Company common stock options shall be treated as set \n          -------\nforth in Section 6.5.\n\n                                  ARTICLE III\n\n                         REPRESENTATIONS AND WARRANTIES\n                          OF PARENT AND THE PURCHASER\n\n     Parent and the Purchaser hereby jointly and severally represent and warrant\nto the Company that, except as and to the extent set forth in a Disclosure\nSchedule (the \"Parent Disclosure Schedule\") delivered to the Company on or prior\n               --------------------------                                       \nto the date hereof setting forth additional exceptions specified therein to the\nrepresentations and warranties contained in this Article III, which Disclosure\nSchedule shall identify exceptions by specific Section references:\n\n     3.1  Corporate Organization.\n          ----------------------   \n\n          (a) Parent is a corporation duly organized, validly existing and in\ngood standing under the laws of the State of Delaware.\n\n          (b) The Purchaser is a corporation duly organized, validly existing\nand in good standing under the laws of the State of Delaware.  The Purchaser has\nnot engaged in any business since it was incorporated other than in connection\nwith the transactions contemplated by this Agreement.  Parent owns all of the\noutstanding capital stock of the Purchaser.\n\n                                      -9-\n\n\n \n     3.2  Authority.  Each of Parent and the Purchaser has the full corporate \n          ---------                                                  \npower and authority to execute and deliver this Agreement, to perform its\nobligations hereunder and to consummate the transactions contemplated hereby. \nThe execution and delivery of this Agreement and the consummation of the\ntransactions contemplated hereby have been duly approved by the respective\nBoards of Directors of Parent and the Purchaser and no other corporate\nproceedings on the part of Parent or the Purchaser are necessary to consummate\nthe transactions so contemplated (other than, with respect to the Merger, the\nfiling and recordation of the appropriate merger documents as required by the\nDGCL).  This Agreement has been duly executed and delivered by each of Parent\nand the Purchaser and, assuming the due authorization, execution and delivery\nthereof by the Company, constitutes a valid and binding obligation of each of\nParent and the Purchaser, enforceable against such parties in accordance with\nits terms.\n\n     3.3  Consents and Approvals; No Violation.  Neither the execution and \n          ------------------------------------                          \ndelivery of this Agreement by Parent and the Purchaser nor the consummation\nby Parent and the Purchaser of the transactions contemplated hereby will (i)\nconflict with or result in any breach of any provision of their respective\ncharter documents, or (ii) assuming compliance with the matters referred to in\nclause (iii) below, constitute a default (or an event which, with notice or\nlapse of time or both, would constitute a default) under, or give rise to a\nright of termination, cancellation or acceleration of any obligation contained\nin or to the loss of a benefit under, or result in the creation of any lien or\nother encumbrance upon any of the properties or assets of Parent or the\nPurchaser under, any of the terms, conditions or provisions of any note, bond,\nmortgage, indenture, deed of trust, license, lease agreement or other agreement,\ninstrument, obligation, permit, concession, franchise, license, judgment, order,\ndecree, statute, law, ordinance, rule or regulation applicable to Parent or the\nPurchaser, or to which either of them or any of their respective properties or\nassets may be subject, except for such violations, conflicts, breaches,\ndefaults, terminations, accelerations or creations of liens or other\nencumbrances, which, individually or in the aggregate, will not have a material\nadverse effect on Parent and its subsidiaries taken as a whole or prevent or\nmaterially delay consummation of the Offer or the Merger, or (iii) require any\nconsent, approval, authorization or permit of, or filing with or notification\nto, any court, administrative agency, commission or other governmental or\nregulatory authority or instrumentality, domestic or foreign (a \"Governmental\n                                                                 ------------\nEntity\"), except (A) pursuant to the Exchange Act, (B) filing of a certificate\n------                                                                        \nof merger pursuant to the DGCL, (C) filings required under the Hart-Scott-Rodino\nAntitrust Improvements Act of 1976, as amended (the \"HSR Act\"), and the\n                                                     -------           \ntermination or expiration of the waiting periods thereunder, (D) filings\nrequired under applicable antitrust laws of any foreign country, (E) filings\nnecessary to comply with state securities or \"blue sky\" laws, or (F) consents,\napprovals, authorizations, permits, filings or notifications which if not\nobtained or made will not, individually or in the aggregate, have a material\nadverse effect on Parent and its subsidiaries taken as a whole or prevent or\nmaterially delay consummation of the Offer or the Merger.\n\n     3.4  Brokers and Finders.  Neither Parent nor the Purchaser has employed \n          -------------------                                         \nany broker or finder or incurred any liability for any fee or commission to any\nbroker, finder or intermediary in connection with the transactions contemplated\nhereby.\n\n                                      -10-\n\n\n \n     3.5  Financing.  The Purchaser has or will have, prior to the expiration \n          ---------                                                 \nof the Offer and the Effective Time of the Merger, sufficient cash or\ncash-equivalent funds available to purchase all of the Shares (and associated\nRights) outstanding in the Offer.\n\n                                   ARTICLE IV\n\n                         REPRESENTATIONS AND WARRANTIES\n                                 OF THE COMPANY\n\n     The Company hereby represents and warrants to Parent and the Purchaser\nthat, except as and to the extent set forth in a Disclosure Schedule (the\n\"Company Disclosure Schedule\") delivered to Parent on or prior to the date\n-----------------------------                                             \nhereof setting forth additional exceptions specified therein to the\nrepresentations and warranties contained in this Article IV, which Disclosure\nSchedule shall identify exceptions by specific Section references:\n\n     4.1  Corporate Organization.  Each of the Company and its Subsidiaries \n          ----------------------                                \n(as defined in Section 4.3) is a corporation duly organized, validly existing\nand in good standing under the laws of its respective jurisdiction of\norganization, has all requisite corporate power and authority and all necessary\ngovernmental approvals to own or lease and operate its properties and assets\nand to carry on its business as it is now being conducted, and is duly\nqualified or licensed as a foreign corporation to do business and in good\nstanding in each jurisdiction in which the nature of the business conducted by\nit or the character or location of the properties owned or leased by it makes\nsuch qualification or licensing necessary, except where the failure to be so\norganized, existing, in good standing, qualified or licensed would not have a\nMaterial Adverse Effect.  As used in this Agreement, the term \"Material Adverse\n                                                               ----------------\nEffect\" means any change, event or effect that, individually or when taken\n------                                                                    \ntogether with all other such changes or effects that have occurred prior to the\ndate of determination of the occurrence of the Material Adverse Effect, is or is\nreasonably likely to be materially adverse to the business, assets (including\nintangible assets), condition (financial or otherwise), prospects or results of\noperations of the Company and its Subsidiaries taken as a whole.  None of the\nfollowing shall be deemed to constitute a Material Adverse Effect with respect\nto any party:  (a) any change in the market price or trading volume of the\nShares of the Company (it being understood that the underlying causes of such\nchange will not be excluded from the definition of Material Adverse Effect\nexcept as otherwise provided in this definition); (b) any adverse effect on the\nbookings of the Company or cancellation of the Company's existing orders (and\nany resulting adverse effect on revenues and earnings) following the execution\nof this Agreement which is reasonably attributable to the announcement of the\nexecution of this Agreement and the transactions contemplated thereby; (c) the\nfailure, in and of itself, to meet analysts' expectations (it being understood\nthat the underlying causes of such failure will not be excluded from the\ndefinition of Material Adverse Effect except as otherwise provided in this\ndefinition), or (d) employee attrition (provided, that the Offer Conditions\nshall have been satisfied and provided that a sufficient number of employees\nremain such that the business of the Company may continue to be operated\nsubstantially consistent with past practice).  The Company has made available to\nParent a complete and correct copy of the Company's and its Subsidiaries'\ncertificates of incorporation and bylaws (or comparable governing documents),\neach as amended to the date hereof.  The Company's and its Subsidiaries'\n\n                                      -11-\n\n\n \ncertificates of incorporation and bylaws (or comparable governing documents)\nmade available are in full force and effect.  Neither the Company nor any of its\nSubsidiaries is in violation of any of the provisions of its Certificate of\nIncorporation or Bylaws (or comparable governing documents).\n\n     4.2  Capitalization.  The authorized capital stock of the Company consists\n          --------------  \nof 40,000,000 shares of Company Common Stock and 4,000,000 shares of preferred\nstock, par value $0.01 per share (\"Preferred Stock\").  As of the close of\n                                   ---------------\nbusiness on November 6, 1998, (i) 6,103,944 shares of Company Common Stock were\nissued and outstanding, (ii) no shares of Preferred Stock were issued and\noutstanding, (iii) 1,330,582 shares of Company Common Stock were reserved for\nissuance upon the exercise of outstanding options to acquire shares of Company\nCommon Stock (\"Stock Options\"), and (iv) no shares of Company Common Stock were\n               -------------\nheld by the Company in its treasury.  As of November 6, 1998, no shares of\nCompany Common Stock were available for issuance under the Company's 1987 Stock\nPlan, 852,940 shares of Company Common Stock were available for issuance\nunder the Company's 1993 Stock Plan, and 112,500 shares of Company Common Stock\nwere available for issuance under the Company's 1994 Non-Employee Directors'\nStock Option Plan (the foregoing Stock Option Plans are referred to,\ncollectively, as the \"Company Stock Option Plans\").  As of November 6, 1998,\n                      --------------------------\n363,622 shares of Company Common Stock were available for issuance under the\nCompany's 1995 Employee Stock Purchase Plan, and the Company is obligated to\nissue 20,769 shares of Company Common Stock under such Plan for the current\nperiod ending March 31, 1999, assuming continued participation by all current\nparticipants through the date of termination of the plan (the \"Current ESPP\n                                                               ------------\nShares\").  The number of issued and outstanding shares of Company Common Stock\n------\nat any time taken together with the number of Current ESPP Shares and the\nnumber of shares of Company Common Stock reserved for issuance upon the\nexercise or conversion of outstanding Stock Options (other than the option\ngranted to the Purchaser under Section 5.5 and other than options first\nbecoming vested after June 30, 1999, but including any options that become\nvested as a result of this Agreement, the Offer or the Merger) at such time is\nreferred to herein as the \"Fully Diluted Shares.\"  The number of shares of\n                           --------------------\nCompany Common Stock subject to options being excluded from the calculation of\nFully Diluted Shares, other than the option granted to Purchaser under Section\n5.5, are referred to herein as the \"Excluded Shares.\"  All of the issued and\n                                    ---------------\noutstanding shares of Company Common Stock are duly authorized, validly issued,\nfully paid and nonassessable and are not subject to preemptive rights created\nby statute, the Certificate of Incorporation or Bylaws of the Company or any\nagreement to which the Company is a party or by which the Company or its assets\nis bound.  Each of the outstanding shares of Capital Stock or other securities\nof each of the Company's Subsidiaries directly or indirectly owned by the\nCompany is duly authorized, validly issued, fully paid and nonassessable and\nowned by the Company or by a direct or indirect Subsidiary of the Company, free\nand clear of any limitation or restriction (including any restriction on the\nright to vote or sell the same except as may be provided as a matter of law). \nThere are no shares of capital stock of the Company issued or outstanding, and\nexcept for the Stock Options and the Rights, there are no outstanding\nsubscriptions, options, warrants, rights, convertible securities or other\nagreements or commitments of any character (including, without limitation,\nrights which will or could become exercisable as a result of this Agreement or\nany transaction contemplated hereby) relating to the issued or unissued capital\nstock or other securities of the Company obligating the Company to\n\n                                      -12-\n\n\n \nissue, deliver or sell, or cause to be issued, delivered or sold, additional\nshares of capital stock of the Company or obligating the Company to grant,\nextend or enter into any subscription, option, warrant, right, convertible\nsecurity or other similar agreement or commitment. There are no voting trusts\nor other agreements or understandings to which the Company is a party with\nrespect to the voting of the capital stock of the Company.  All payments with\nrespect to Stock Options pursuant to Section 6.5 hereof shall not exceed\n$1,800,000, including payments due to any acceleration of vesting resulting\nfrom a change of control.\n \n     4.3  Subsidiaries.  Schedule 4.3 of the Company Disclosure Schedule\n          ------------  \ncontains a correct and complete list of each of the Company's Subsidiaries, the\njurisdiction where each of such Subsidiaries is organized and the percentage of\noutstanding capital stock of each of such Subsidiaries that is directly or\nindirectly owned by the Company.  The Company or another Subsidiary of the\nCompany owns its shares of the Capital Stock of each Subsidiary of the Company\nfree and clear of all liens, claims and encumbrances. Schedule 4.3 of the\nCompany Disclosure Schedule sets forth a true and complete list of each equity\ninvestment in an amount of $250,000 or more or which represents a 5% or greater\nownership interest in the subject of such investment made by the Company or any\nof its Subsidiaries in any other Person other than the Company's Subsidiaries\n(\"Other Interests\").  The Other Interests are owned by the Company, by one or\n  ---------------\nmore of the Company's Subsidiaries or by the Company and one or more of its\nSubsidiaries, in each case free and clear of all liens, claims and\nencumbrances.  For purposes of this Agreement, (i) the term \"Subsidiary\" shall\n                                                             ----------\nmean any corporation, partnership, limited liability company, association,\ntrust, unincorporated association or other legal entity of which the Company,\neither alone or through or together with any other Subsidiary, owns, directly\nor indirectly, 50% or more of the capital stock, partnership interests, member\ninterests or other ownership interests, the holders of which are generally\nentitled to vote for the election of the Board of Directors or other governing\nbody of such corporation or other legal entity, and (ii) \"Capital Stock\" shall\n                                                          -------------\nmean common stock, preferred stock, partnership interests, limited liability\ncompany interests or other ownership interests entitling the holder thereof to\nvote with respect to matters involving the issuer thereof, and (iii) the term\n\"Person\" shall mean an individual, corporation (including not-for-profit),\n ------\npartnership, limited liability company, association, trust, unincorporated\norganization, joint venture, estate, Governmental Entity or other legal entity.\n \n \n     4.4  Authority.  The Company has the full corporate power and authority\n          ---------  \nto enter into this Agreement, to perform its obligations hereunder and to\nconsummate the transactions contemplated hereby.  The execution and delivery of\nthis Agreement and the consummation of the transactions contemplated hereby\nhave been duly approved by the Board of Directors of the Company and no other\ncorporate proceedings on the part of the Company are necessary to authorize\nthis Agreement or to consummate the transactions so contemplated (other than,\nwith respect to the Merger, the approval and adoption of this Agreement by the\nstockholders of the Company if and to the extent required by applicable law,\nand the filing and recordation of the appropriate merger documents as required\nby the DGCL). This Agreement has been duly executed and delivered by, and,\nassuming the due authorization, execution and delivery thereof by Parent and\nthe Purchaser, constitutes a valid and binding obligation of the Company,\nenforceable against the Company in accordance with its terms.  The only action\n\n                                      -13-\n\n\n \nrequired to be taken by stockholders of the Company in order to consummate the\nMerger is the affirmative vote of a majority of the outstanding shares of\nCommon Stock of the Company.\n \n     4.5  Consents and Approvals; No Violation.  Neither the execution and\n          ------------------------------------\ndelivery of this Agreement by the Company nor the consummation by the Company\nof the transactions contemplated hereby will (i) conflict with or result in any\nbreach or violation of any provision of the Certificate of Incorporation or\nBylaws of the Company or any of its Subsidiaries, or (ii) constitute a default\n(or an event which, with notice or lapse of time or both, would constitute a\ndefault) under, or give rise to a right of termination, consent, approval,\ncancellation or acceleration of any obligation contained in or to the loss of a\nbenefit under, or result in the creation of any lien or other encumbrance upon\nany of the properties or assets of the Company or any of its Subsidiaries\nunder, any of the terms, conditions or provisions of any note, bond, mortgage,\nindenture, deed of trust, license, lease, agreement or other instrument or\nobligation, permit, concession, franchise, license, judgment, order, decree,\nstatute, law, ordinance, rule or regulation applicable to the Company or any of\nits Subsidiaries or to which the Company, its Subsidiaries or any of their\nproperties or assets may be subject, or (iii) require any consent, approval,\nauthorization or permit of, or filing with or notification to, any Governmental\nEntity, except (A) pursuant to the Exchange Act, (B) filing of a certificate of\nmerger pursuant to the DGCL, (C) filings under the HSR Act and the termination\nor expiration of the waiting periods thereunder, (D) filings required under\napplicable antitrust laws of any foreign country, or (E) filings necessary to\ncomply with state securities or \"blue sky\" laws.\n \n     4.6  Proxy or Information Statement.  If a Stockholders' Meeting (as \n          ------------------------------\ndefined in Section 5.2 below) is convened in connection with the Merger, the\nproxy statement to be provided to stockholders of the Company in connection\nwith the Stockholders' Meeting (together with the amendments and supplements\nthereto, the \"Proxy Statement\") and all amendments thereof and supplements\n              ---------------\nthereto shall, and if no Stockholders' Meeting is convened in connection with\nthe Merger, the information statement to be provided to stockholders of the\nCompany in connection with the Merger, if any (together with the amendments and\nsupplements thereto, the \"Information Statement\") shall, comply as to form in\n                          ---------------------\nall material respects with the applicable requirements of the Exchange Act and\nthe rules and regulations promulgated thereunder, and shall not, at the time of\n(i) first mailing thereof or (ii) in the case of the Proxy Statement, the\nStockholders' Meeting to be held in connection with the Merger, contain any\nuntrue statement of a material fact or omit to state any material fact required\nto be stated therein or necessary in order to make the statements therein, in\nlight of the circumstances under which they were made, not misleading, except\nthat no representation is made by the Company with respect to information\nsupplied by the Purchaser, Parent or any affiliates or representatives of\nParent or the Purchaser for inclusion in the Proxy Statement or Information\nStatement, as the case may be.\n \n \n     4.7  Conduct of Business.\n          -------------------\n \n          (a) The business of the Company and its Subsidiaries, as presently\nconducted, is not being conducted in default or violation of any term, condition\nor provision of (i) their respective charter or bylaws, or (ii) any note, bond,\nmortgage, indenture, deed of trust, lease, agreement or other instrument or\nobligation of any kind to which the Company or any of\n\n                                      -14-\n\n\n \nits Subsidiaries is a party or by which the Company or its Subsidiaries or any\nof their properties or assets may be bound, or (iii) any federal, state, local\nor foreign statute, law, ordinance, rule, regulation, judgment, decree, order,\nconcession, grant, franchise, permit or license or other governmental\nauthorization or approval applicable to the Company or its Subsidiaries,\nexcluding from the foregoing clauses (ii) and (iii) defaults or violations that\ncould not reasonably be expected to have a Material Adverse Effect.\n\n          (b) The Company and its Subsidiaries have all licenses, permits,\norders or approvals of, and has made all required registrations with, all\nGovernmental Entities that are material to the conduct of the business of the\nCompany and its Subsidiaries (collectively, \"Permits\").  All Permits are in full\n                                             -------                            \nforce and effect, no material violations are or have been recorded in respect of\nany Permit, and no proceeding is pending or threatened to revoke or limit any\nPermit.\n\n     4.8  SEC Documents; Financial Statements.\n          -----------------------------------\n \n          (a) The Company has filed all required reports, schedules, forms,\nstatements and other documents with the SEC since January 1, 1995 (the \"SEC\n                                                                        ---\nDocuments\").  As of their respective dates, the SEC Documents complied in all\n---------                                                                    \nmaterial respects with the requirements of the Securities Act of 1933, as\namended (the \"Securities Act\"), or the Exchange Act, as the case may be, and the\n              --------------                                                    \nrules and regulations of the SEC promulgated thereunder applicable to such SEC\nDocuments, and, at the time of filing, none of the SEC Documents contained any\nuntrue statement of a material fact or omitted to state a material fact required\nto be stated therein or necessary in order to make the statements therein, in\nlight of the circumstances under which they were made, not misleading.  The\nfinancial statements of the Company included in the SEC Documents (the \"SEC\n                                                                        ---\nFinancial Statements\") comply as to form in all material respects with\n--------------------                                                  \napplicable accounting requirements and the published rules and regulations of\nthe SEC with respect thereto, have been prepared in accordance with generally\naccepted accounting principles applied on a consistent basis during the periods\ninvolved and fairly present the financial position of the Company as of the\ndates thereof and its statements of operations, stockholders' equity and cash\nflows for the periods then ended (subject, in the case of unaudited statements,\nto normal and recurring year-end audit adjustments which are not material).  The\nCompany has heretofore delivered to Parent complete and correct copies of all of\nthe SEC Documents and all amendments and modifications thereto, as well as, to\nthe extent any shall exist, all amendments and modifications that have not been\nfiled by the Company with the SEC to all agreements, documents and other\ninstruments that previously had been filed by the Company with the SEC and are\ncurrently in effect.\n\n          (b) The Company has delivered to Parent an unaudited balance sheet as\nat September 30, 1998, and unaudited statements of income as of and for the six\nmonths then ended (the \"Interim Financial Statements,\" and together with the SEC\n                        ----------------------------                            \nFinancial Statements, the \"Company Financial Statements\").\n                           ----------------------------   \n\n          (c) Except as and to the extent set forth on the balance sheet of the\nCompany as at September 30, 1998, including the notes thereto, the Company has\nno liability or\n\n                                      -15-\n\n\n \nobligation of any nature (whether accrued, absolute, contingent or otherwise)\nwhich would be required to be reflected on a balance sheet, or in the notes\nthereto, prepared in accordance with generally accepted accounting principles,\nexcept for liabilities and obligations incurred in the ordinary course of\nbusiness consistent with past practice since September 30, 1998 which could not\nreasonably be expected to have a Material Adverse Effect.\n\n     4.9  Litigation.\n          ----------\n \n          (a) There is no suit, action or proceeding pending or, to the\nknowledge of the Company, threatened against the Company or any of its\nSubsidiaries.  No Governmental Entity has at any time challenged or questioned\nin a writing delivered to the Company or any of its Subsidiaries the legal right\nof the Company or any of its Subsidiaries to design, manufacture, offer or sell\nany of their respective products in the present manner or style thereof.\n\n          (b) Neither the Company nor any of its Subsidiaries has ever been\nnotified in writing that it has been subject to an audit, compliance review,\ninvestigation or like contract review by the office of the Inspector General of\nthe U.S. General Services Administration or any other Governmental Entity or\nagent thereof in connection with any government contract (a \"Government Audit\").\n                                                             ---------------- \nTo the Company's knowledge, no Government Audit is threatened, and in the event\nof any such Government Audit, to the knowledge of the Company, no basis exists\nfor a finding of material noncompliance with any provision of any government\ncontract or for a refund of any amounts paid or owed to the Company or any of\nits Subsidiaries by any Governmental Entity pursuant to such government\ncontract.  For any item disclosed in the Company Disclosure Schedule pursuant to\nthis Section 4.9, a true and complete copy of all material correspondence and\ndocumentation with respect thereto has been made available to Parent.\n\n     4.10  Labor Agreements and Actions.\n           ----------------------------\n \n          (a) Neither the Company nor any of its Subsidiaries is bound by or\nsubject to (and none of their respective assets or properties are bound by or\nsubject to) any written or oral, express or implied, contract, commitment or\narrangement with any labor union, and no labor union has requested or, to the\nknowledge of the Company, has sought to represent any of the employees,\nrepresentatives or agents of the Company or any of its Subsidiaries.  There is\nno strike, unfair labor practice complaint or other labor dispute involving the\nCompany or any of its Subsidiaries pending, or to the knowledge of the Company\nthreatened, which is reasonably likely to have a Material Adverse Effect, nor is\nthe Company aware of any labor organization activity involving its or any of its\nSubsidiaries' employees.  Neither the Company nor any of its Subsidiaries is\nengaged in any unfair labor practice and neither the Company nor any of its\nSubsidiaries is in material violation of any applicable laws respecting\nemployment and employment practices, terms and conditions of employment, and\nwages and hours.  Neither the Company nor any of its Subsidiaries has\nexperienced any material work stoppage or other material labor difficulty.\n\n          (b) The employment of each officer and employee of the Company and\neach of its Subsidiaries is terminable at the will of the Company or such\nSubsidiaries, as the\n\n                                      -16-\n\n\n \ncase may be, and neither the Company nor any of its Subsidiaries has entered\ninto any oral or written agreements with any of their respective officers or\nemployees that provide for severance or termination pay or acceleration of\nvesting on stock options or restricted stock.  Neither the Company nor any of\nits Subsidiaries is a party to any agreement, contract or arrangement with any\nofficer or employee the benefits of which are contingent, or the terms of which\nare materially altered, upon the occurrence of a transaction involving the\nCompany or such Subsidiaries, as the case may be, of the nature of any of the\ntransactions contemplated by this Agreement.\n\n          (c) The Company and each of its Subsidiaries has complied in all\nmaterial respects with all applicable state and federal equal employment\nopportunity laws and with other laws related to employment.  The Company and\neach of its Subsidiaries has conducted all employee terminations and reductions\nin force in accordance with company policy and in compliance with all applicable\nlaws, including but not limited to the Worker Adjustment and Retraining\nNotification Act (\"WARN\"). There is no, and has not been any, claim against the\n                   ----                                                        \nCompany or any of its Subsidiaries, or to the Company's knowledge, threatened\nagainst the Company or any of its Subsidiaries, based on actual or alleged race,\nage, sex, disability or other harassment or discrimination, or similar tortious\nconduct, nor to the knowledge of the Company, is there any basis for any such\nclaim.  There are no pending claims against the Company or any of its\nSubsidiaries under any workers' compensation plan or policy or for long term\ndisability.  There are no pending or threatened wage claims against the Company\nor any of its Subsidiaries, and there are no other proceedings pending or, to\nthe knowledge of the Company, threatened against the Company or any of its\nSubsidiaries, by any employee or former employee.\n\n          (d) The Company is not aware that any officer of the Company or any of\nits Subsidiaries, or any employee whose technical knowledge is of significant\nimportance for the development of products of the Company or any of its\nSubsidiaries (including, but not limited to, the employees listed on Annex I to\nthe Company Disclosure Schedule), or that any group of officers or such\nemployees of the Company or any of its Subsidiaries, intends to terminate such\nofficer's or such employee's employment with the Company or its Subsidiaries, as\nthe case may be, nor does the Company or any of its Subsidiaries have any\npresent intention to terminate the employment of any officer or any such\nemployee.  To the knowledge of the Company, each officer and each such employee\nof the Company and its Subsidiaries is currently devoting 100% of his or her\nbusiness time attending to the affairs of the Company or its Subsidiaries, as\nthe case may be.\n\n     4.11  Certain Agreements and Employee Benefit Plans.\n           ---------------------------------------------\n \n          (a) Schedule 4.11(a) of the Company Disclosure Schedule contains a\ntrue and complete summary or list of, or otherwise describes, (i) all employee\nbenefit plans (within the meaning of Section 3(3) of the Employee Retirement\nIncome Security Act of 1974, as amended (\"ERISA\")) which are maintained,\n                                          -----                         \ncontributed to or sponsored by the Company or any trade or business (whether or\nnot incorporated) which is treated as a single employer with the Company (an\n\"ERISA Affiliate\") within the meaning of Section 414(b), (c), (m) or (o) of the\n----------------                                                               \nInternal Revenue Code of 1986, as amended (the \"Code\"), for the benefit of any\n                                                ----                          \ncurrent or former employee, officer or director of the Company or an ERISA\nAffiliate, (ii) each loan to a\n\n                                      -17-\n\n\n \nnon-officer employee and loans to officers and directors of the Company or any\nof its Subsidiaries, (iii) all bonus, stock option, stock purchase, restricted\nstock, phantom stock, or stock appreciation right plans, programs or\narrangements, (iv) all incentive, deferred compensation, supplemental\nretirement, savings, profit sharing, or severance plans, programs or\narrangements, (v) all sabbatical, employee relocation, vacation, cafeteria\nbenefit (Code Section 125), dependent care benefit (Code Section 129), life or\naccident insurance, disability, medical, dental, vision or any other fringe or\nbenefit plans, programs or arrangements, and (vi) any current or former\nemployment or executive compensation or severance agreements, written or\notherwise, for the benefit of, or relating to, any present or former employee,\nconsultant or director of the Company or any of its Subsidiaries, as to which\n(with respect to any of items (i) through (vi) above) any obligation or\npotential liability is borne by the Company or any of its Subsidiaries\n(together, the \"Company Employee Plans\").\n                ----------------------   \n\n          (b) The Company has delivered to Parent a copy of each of the Company\nEmployee Plans and related plan documents (including trust documents, insurance\npolicies or contracts, employee booklets, summary plan descriptions and other\nauthorizing documents, and, to the extent still in its possession, any material\nemployee communications relating thereto) and has, with respect to each Company\nEmployee Plan which is subject to ERISA reporting requirements, provided copies\nof any Form 5500 reports filed for the last three plan years.  Any Company\nEmployee Plan intended to be qualified under Section 401(a) of the Code has\neither obtained from the Internal Revenue Service a favorable determination\nletter as to its qualified status under the Code, including all amendments to\nthe Code effected by the Tax Reform Act of 1986 and subsequent legislation, or\nhas applied to the Internal Revenue Service for such a determination letter\nprior to the requisite period under applicable Treasury Regulations or Internal\nRevenue Service pronouncements in which to apply for a determination letter and\nto make any amendments necessary to obtain a favorable determination.  The\nCompany has also furnished Parent with the most recent Internal Revenue Service\ndetermination letter issued with respect to each such Company Employee Plan, and\nnothing has occurred since the issuance of each such letter which could\nreasonably be expected to cause the loss of the tax-qualified status of any\nCompany Employee Plan subject to Code Section 401(a).\n\n          (c) With respect to each Company Employee Plan, (i) there has been no\n\"prohibited transaction,\" as such term is defined in Section 406 of ERISA and\nSection 4975 of the Code, (ii) each Company Employee Plan has been administered\nin accordance with its terms and in compliance with the requirements prescribed\nby any and all statutes, rules and regulations (including ERISA and the Code),\n(iii) the Company (or, as appropriate, an ERISA Affiliate) has prepared in good\nfaith and timely filed all requisite governmental reports (which were true and\ncorrect as of the date filed) and has properly and timely filed and distributed\nor posted all notices and reports to participants and beneficiaries required to\nbe filed, distributed or posted, (iv) no suit, administrative proceeding, action\nor other litigation has been brought, or to the knowledge of the Company is\nthreatened against such Company Employee Plan, including any audit or inquiry by\nthe Internal Revenue Service or United States Department of Labor, (v) the\nCompany and each ERISA Affiliate have performed all material obligations\nrequired to be performed by them and are not in any material respect in default\nunder or in violation of, and have no knowledge of any material default or\nviolation of, such Company Employee Plan, (vi)\n\n                                      -18-\n\n\n \nneither the Company nor any ERISA Affiliate is subject to any liability or\npenalty under Sections 4976 through 4980 of the Code or Title I of ERISA, (vii)\nall contributions required to be made by the Company or any ERISA Affiliate\nhave been made on or before their due dates, (viii) no \"reportable event\"\nwithin the meaning of Section 4043 of ERISA (excluding any such event for which\nthe thirty (30) day notice requirement has been waived under the regulations to\nSection 4043 of ERISA) nor any event described in Section 4062, 4063 or 4041 of\nERISA has occurred, (ix) such Company Employee Plan is not covered by, and\nneither the Company nor any ERISA Affiliate has incurred or expects to incur\nany material liability under, Title IV of ERISA or Section 412 of the Code, and\n(x) neither the Company nor any ERISA Affiliate is a party to, or has made any\ncontribution to or otherwise incurred any obligation under, any \"multi-employer\nplan\" as defined in Section 3(37) of ERISA.\n\n          (d) With respect to each Company Employee Plan, the Company has\ncomplied with (i) the applicable health care continuation and notice provisions\nof the Consolidated Omnibus Budget Reconciliation Act of 1985 (\"COBRA\") and the\n                                                                -----          \nproposed regulations thereunder, (ii) the applicable requirements of the Family\nand Medical Leave Act of 1993 (\"FMLA\") and the regulations thereunder, and (iii)\n                                ----                                            \nthe applicable requirements of the Health Insurance Portability and\nAccountability Act of 1996 (\"HIPAA\") and the temporary regulations thereunder.\n                             -----                                            \nThe Company has no material obligations under COBRA with respect to any former\nemployees or qualifying beneficiaries thereunder.\n\n          (e) With respect to each Company Employee Plan, there has been no\namendment to, written interpretation or announcement (whether or not written) by\nthe Company or other ERISA Affiliate relating to, or change in participation or\ncoverage under, such Company Employee Plan which would materially increase the\nexpense of maintaining such Plan above the level of expense incurred with\nrespect to that Plan for the most recent fiscal year included in the Company\nFinancial Statements.\n\n          (f) Schedule 4.11(f) of the Company Disclosure Schedule contains a\ntrue and correct list of each person who holds any stock option as of the date\nhereof, together with (i) the number of shares of Company Common Stock subject\nto such stock option, (ii) the date of grant of such stock option, (iii) the\nextent to which such stock option is currently vested and, to the extent such\nstock option is unvested, the vesting schedule, (iv) the exercise price of such\nstock option, (v) whether such stock option is intended to qualify as an\nincentive stock option within the meaning of Section 422(b) of the Code (an\n\"ISO\"), and (vi) the expiration date of such stock option.  Schedule 4.11(f) of\n ---                                                                           \nthe Company Disclosure Schedule also sets forth the aggregate number of ISO's\nand nonqualified stock options outstanding as of the date hereof.\n\n          (g) Neither the Company nor any of its Subsidiaries is a party to any\nagreement or plan, including, without limitation, any stock option plan, stock\nappreciation right plan or stock purchase plan, any of the benefits of which\nwill be increased, or the vesting of benefits of which will be accelerated, by\nthe occurrence of any of the transactions contemplated by this Agreement or the\nvalue of any of the benefits of which will be calculated on the basis of any of\nthe transactions contemplated by this Agreement.\n\n                                      -19-\n\n\n \n          (h) All options under the Company's 1995 Employee Stock Purchase Plan\nshall terminate as of December 15, 1998 and all actions have been taken such\nthat the termination of the options is in full and complete compliance with the\nterms of such plan.\n\n     4.12  Taxes.\n           -----\n \n          (a) The Company and each of its Subsidiaries (i) has filed when due\n(taking into account extensions) with the appropriate federal, state, local,\nforeign and other governmental agencies, all tax returns, estimates and reports\nrequired to be filed by it, (ii) either paid when due and payable or established\nadequate reserves or otherwise accrued all requisite federal, state, local or\nforeign taxes, levies, imposts, duties, licenses and registration fees and\ncharges of any nature whatsoever, and unemployment and social security taxes and\nincome tax withholding, including interest and penalties thereon (\"Taxes\"), and\n                                                                   -----       \n(iii) has established or will establish in accordance with its normal accounting\npractices and procedures accruals and reserves that, in the aggregate, are\nadequate for the payment of all Taxes not yet due and payable and attributable\nto any period preceding the Effective Time.\n\n          (b) No deficiencies for Taxes have been threatened or claimed by any\ntaxing authority in respect of any tax returns filed by the Company or any of\nits Subsidiaries (or any predecessor corporations).  Neither the Company nor any\nof its Subsidiaries (nor any predecessor corporation of any of such entities)\nhas executed or filed with any taxing authority any agreement or other document\nextending, or having the effect of extending, the period of assessment or\ncollection of any Taxes.  Neither the Company nor any of its Subsidiaries is\ncurrently being audited by any taxing authority nor have any of them received\nnotice of a proposed audit pertaining to Taxes.  There are no tax liens on any\nassets of the Company, any of its Subsidiaries or any affiliate, except for\nTaxes not yet due and payable.  The accruals and reserves for taxes reflected in\nthe balance sheet of the Company as at September 30, 1998 are in all material\nrespects adequate to cover all Taxes accruable through the date thereof\n(including interest and penalties, if any, thereon and Taxes being contested) in\naccordance with generally accepted accounting principles.\n\n          (c) Neither the Company nor any of its Subsidiaries is a party to, is\nbound by, or has any obligation under any tax sharing or similar agreement.\n\n          (d) Neither the Company nor any of its Subsidiaries is required to\ninclude in income (i) any amount in respect of any adjustment under Section 481\nof the Code, (ii) any deferred intercompany transaction, or (iii) any\ninstallment sale gain, where the inclusion in income would result in a Tax\nliability materially in excess of the reserves therefor.  Neither the Company\nnor any of its Subsidiaries has given a consent under Section 341(f) of the\nCode.  Neither the Company nor any of its Subsidiaries is, nor has it been at\nany time, a \"United States real property holding corporation\" within the meaning\nof Section 897(c)(2) of the Code.  Neither the Company nor any of its\nSubsidiaries owns any property of a character which would give rise to any\ndocumentary, stamp or other transfer tax as a result of the transactions\ncontemplated by this Agreement.\n\n                                      -20-\n\n\n \n          (e) Neither the Company nor any of its Subsidiaries is a party to any\nagreement, contract or arrangement that may result, separately or in the\naggregate, in the payment of any \"excess parachute payment\" within the meaning\nof Section 280G of the Code, determined without regard to Section 280G(b)(4) of\nthe Code, or under which any person may receive payments subject to the tax\nimposed by Section 4999 of the Code, by reason of the transactions contemplated\nby this Agreement.\n\n          (f) All independent contractors and consultants of the Company and\neach of its Subsidiaries have been properly classified as independent\ncontractors for the purposes of federal and applicable state laws and laws\napplicable to employee benefits and other applicable law.\n\n     4.13  Absence of Certain Changes or Events.  Since September 30, 1998,\n           ------------------------------------\nexcept as contemplated by this Agreement, the Company and each of its\nSubsidiaries has conducted its business only in the ordinary course consistent\nwith past practice, and there has not been (i) any damage, destruction or loss,\nwhether covered by insurance or not, having or which, insofar as reasonably can\nbe foreseen, in the future would have a Material Adverse Effect, (ii) any\ndeclaration, setting aside or payment of any dividend (whether in cash, stock\nor property) with respect to Company Common Stock, or any redemption, purchase\nor other acquisition of any of its securities, (iii) any event or change in the\nbusiness, operations, properties, prospects, condition (financial or\notherwise), assets or liabilities (including, without limitation, contingent\nliabilities) of the Company or any of its Subsidiaries having, or which,\ninsofar as reasonably can be foreseen, in the future would have a Material\nAdverse Effect, (iv) any labor dispute, other than routine matters, none of\nwhich is material to the Company or any of its Subsidiaries, (v) any entry into\nany material commitment or transaction (including, without limitation, any\nborrowing or capital expenditure) other than in the ordinary course of business\nconsistent with past practice, (vi) any material change by the Company in its\naccounting methods, principles or practices, (vii) any revaluation by the\nCompany of any asset (including, without limitation, any writing down of the\nvalue of inventory or writing off of notes or accounts receivable), (viii) any\nincrease in or establishment of any bonus, insurance, severance, deferred\ncompensation, pension, retirement, profit sharing, stock option (including,\nwithout limitation, the granting of stock options, stock appreciation rights,\nperformance awards, or restricted stock awards), stock purchase or other\nemployee benefit plan, or any other increase in the compensation payable or to\nbecome payable to any officers or key employees of the Company or any of its\nSubsidiaries, or (ix) entry by the Company or any of its Subsidiaries into any\nlicensing or other agreement with regard to the acquisition or disposition of\nany material Intellectual Property other than nonexclusive licenses granted in\nthe ordinary course of business consistent with past practice.\n\n                                      -21-\n\n\n \n     4.14  Title to Properties; Absence of Liens and Encumbrances; Condition of\n           --------------------------------------------------------------------\nEquipment.\n---------\n         \n          (a) Neither the Company nor any of its Subsidiaries owns any real\nproperty.\n\n          (b) All of the existing real property leases to which the Company or\nany of its Subsidiaries is a party have been previously delivered to Parent.\nSchedule 4.14(b) of the Company Disclosure Schedule sets forth a complete and\naccurate list of all real property leased by the Company or any of its\nSubsidiaries.  All such leases are in full force and effect, are valid and\neffective in accordance with their respective terms, and there is not, under any\nof such leases, any existing default (by the Company or any of its Subsidiaries\nor, to the knowledge of the Company, any other party) or event of default (or\nevent which with notice or lapse of time, or both, would constitute a default)\nthat would give rise to a material claim against the Company or any of its\nSubsidiaries or, to the knowledge of the Company, any other party.\n\n          (c) The Company and each of its Subsidiaries owns or has valid\nleasehold interests in all of its tangible properties and assets (real, personal\nand mixed) used in its business, free and clear of any liens (other than liens\nfor Taxes that are not yet delinquent), charges, pledges, security interests or\nother encumbrances, except as reflected in the Company Financial Statements and\nexcept for such imperfections of title and encumbrances, if any, that are not\nsubstantial in character, amount or extent, and that do not and are not\nreasonably likely to materially detract from the value, or interfere with the\nuse of the property subject thereto or affected thereby.  The Company has\ndelivered to Parent correct and complete copies of each lease identified in\nSchedule 4.14(b) of the Company Disclosure Schedule and each such lease is valid\nand enforceable by the Company or a Subsidiary in accordance with its terms.\nNeither the Company nor any Subsidiary has received notice that, and, to the\nCompany's knowledge, no circumstance exists which, with the passage of time or\nthe giving of notice or both, could constitute a default under any such lease.\n\n          (d) Each item of machinery and equipment owned or leased by the\nCompany or any of its Subsidiaries is (i) adequate for the conduct of the\nbusiness of the Company consistent with its past practice, (ii) suitable for the\nuses to which it is currently employed, (iii) in good operating condition,\nordinary wear and tear excepted, and (iv) regularly and properly maintained.\n\n                                      -22-\n\n\n \n     4.15  Intellectual Property.\n           ---------------------   \n\n          (a) The Company and each of its Subsidiaries owns all patents,\ntrademarks, trade names, service marks, copyrights and any applications for such\npatents, trademarks, trade names, service marks and copyrights, and all patent\nrights, trade secrets, schematics, technology, know-how, computer software,\ndocumentation and tangible or intangible proprietary information or material and\nother intellectual property or proprietary rights (collectively, \"Intellectual\n                                                                  ------------\nProperty\") used in the conduct of its business as currently conducted, including\n--------                                                                        \nwithout limitation all copyrights registered in the name of the Company or any\nof its Subsidiaries (\"Company Intellectual Property\").  The Company and each of\n                      -----------------------------                            \nits Subsidiaries has taken reasonable measures to protect the proprietary nature\nof each item of Company Intellectual Property that it considers confidential,\nand to maintain in confidence all trade secrets and confidential information\nthat it presently owns or uses.\n\n               (i) Section 4.15(a)(i) of the Company Disclosure Schedule lists,\nas of the date hereof, all patents and patent applications and all trademarks,\nregistered copyrights, trade names and service marks owned by, or licensed to,\nthe Company or any of its Subsidiaries and which are currently used in\nconnection with the business of the Company or its Subsidiaries, including the\njurisdictions in which each item of such Company Intellectual Property has been\nissued or registered or in which any such application for such issuance or\nregistration has been filed.\n\n               (ii) Section 4.15(a)(ii) of the Company Disclosure Schedule\nlists, as of the date hereof, all written licenses, sublicenses and other\nagreements to which Company or any of its Subsidiaries is a party and pursuant\nto which any person is authorized to use any Company Intellectual Property\nrights, excluding object code, nonexclusive end-user licenses granted to\nend-users in the ordinary course of business that permit use of software\nproducts without a right to modify, distribute or sublicense the same\n(\"End-User Licenses\"), and excluding any such licenses relating solely to the \n  -----------------                          \nbusiness of Knowledge Technologies International (\"KTI\") that have been\n                                                   --- \nassigned to KTI and reflected in the schedules to the Transition Agreement\nbetween the Company and KTI.  Section 4.15(a)(ii) separately lists all End-User\nLicenses other than those relating solely to the business of KTI.\n\n               (iii) Section 4.15(a)(iii) of the Company Disclosure Schedule\nlists, as of the date hereof, all written licenses, sublicenses and other\nagreements to which the Company or any of its Subsidiaries is a party and\npursuant to which the Company or any such Subsidiary is authorized to use any\nthird party Intellectual Property (\"Third Party Intellectual Property\") which\n                                    ---------------------------------     \nis incorporated (\"Embedded Third Party Intellectual Property\") in any existing \n                  ------------------------------------------\nsoftware, hardware, product or service of the Company or any of its\nSubsidiaries, or any software, hardware, product or service currently under\ndevelopment (\"Products\").\n              --------   \n\n               (iv) Section 4.15(a)(iv) of the Company Disclosure Schedule\nlists, as of the date hereof, all written agreements or other arrangements\nunder which the Company or any of its Subsidiaries has provided or agreed to\nprovide source code of any product of the Company or any of its Subsidiaries to\nany third party.\n\n                                      -23-\n\n\n \n          The Company has made available to Parent correct and complete copies\nof all patents, registrations, applications (owned by the Company or any of its\nSubsidiaries), and all licenses, sublicenses and agreements referred to in this\nSection 4.15(a), each as amended to date. Except for retail purchases of\nsoftware, neither the Company nor any of its Subsidiaries is a party to any oral\nlicense, sublicense or agreement which, if reduced to written form, would be\nrequired to be listed in Section 4.15 of the Company Disclosure Schedule under\nthe terms of this Section 4.15(a).\n\n          (b) With respect to each item of Company Intellectual Property that\nthe Company or any of its Subsidiaries owns, (i) the Company or its Subsidiaries\npossess all right, title and interest in and to such item; and (ii) such item is\nnot subject to any outstanding judgment, order, decree, stipulation or\ninjunction.\n\n          (c) With respect to each item of Third Party Intellectual Property\nlisted in Section 4.15(a)(iii): (i) the license, sublicense or other agreement\ncovering such item is legal, valid, binding, enforceable and in full force and\neffect with respect to the Company or such Subsidiary, and, to the Company's\nknowledge, is legal, valid, binding, enforceable and in full force and effect\nwith respect to each other party thereto; (ii) neither the Company nor any of\nits Subsidiaries is in material breach or default thereunder, and, to the\nCompany's knowledge, no other party to such license, sublicense or other\nagreement is in material breach or default thereunder, and, to the Company's\nknowledge, no event has occurred which with notice or lapse of time would\nconstitute a material breach or default by the Company or any of its\nSubsidiaries or permit termination, modification or acceleration thereunder by\nthe other party thereto; (iii) to the Company's knowledge, the underlying item\nof Third Party Intellectual Property is not subject to any outstanding judgment,\norder, decree, stipulation or injunction to which the Company or any of is\nSubsidiaries is a party or has been specifically named that interferes with the\nconduct of the Company's or any of its Subsidiaries' business as currently\nconducted, nor, to the Company's knowledge, subject to any other outstanding\njudgment, order, decree, stipulation or injunction that interferes with the\nconduct of the Company's or any of its Subsidiaries' business as currently\nconducted.\n\n          (d) Neither the Company nor any of its Subsidiaries has (i) been named\nin any suit, action or proceeding as to which it has been served with process\nwhich involves a claim of infringement or misappropriation of any Intellectual\nProperty right of any third party or (ii) received any written notice alleging\nany such claim of infringement or misappropriation. The Company has made\navailable to Parent correct and complete copies of all such suits, actions or\nproceedings or written notices.  The manufacturing, marketing, licensing, use or\nsale of the products or the performance of the services offered by the Company\nand its Subsidiaries do not currently infringe, and have not infringed, any\nIntellectual Property right of any third party; and, to the knowledge of the\nCompany, none of the Company Intellectual Property rights are being infringed by\nactivities, products or services of any third party.\n\n          (e) The execution and delivery of this Agreement by the Company, and\nthe consummation of the transactions contemplated hereby, will neither cause the\nCompany nor any of its Subsidiaries to be in violation or default under any\nlicense, sublicense or other\n\n                                      -24-\n\n\n \nagreement relating to Intellectual Property, nor terminate nor modify nor\nentitle any other party to any such license, sublicense or agreement to\nterminate or modify such license, sublicense or agreement, nor limit in any way\nthe Company's or any of its Subsidiaries' ability to conduct its business or\nuse or provide the use of Company Intellectual Property or any Intellectual\nProperty rights of others.\n\n          (f) Except for Embedded Third Party Intellectual Property for which\nthe Company has valid non-exclusive licenses and which are adequate for each of\nthe Company's and its Subsidiaries' businesses as presently conducted, and\nexcept for usual and customary rights retained by the United States government\nwith respect to Intellectual Property developed under research contracts with\nthe Federal government (the \"Retained Fed Rights\"), the Company is the sole and\n                             -------------------                               \nexclusive owner or the licensee of, with all right, title and interest in and to\nall Company Intellectual Property (free and clear of any liens or encumbrances),\nand has sole and exclusive rights (and is not contractually obligated to pay any\ncompensation to any third party in respect thereof) to the use and distribution\nthereof or the material covered thereby in connection with the services or\nproducts in respect of which Company Intellectual Property is being used.  To\nthe Company's knowledge, the United States government has never exercised, and\nthe Company has no notice that the government intends to exercise, its rights to\nuse or provide to others the use of the Retained Fed Rights with respect to any\nCompany Intellectual Property in a manner that would be material to the\nCompany's non-governmental business.  The Retained Fed Rights do not materially\ninterfere with the conduct of the Company's business.\n\n          (g) The Company has made available to Parent copies of the Company's\nand each of its Subsidiaries' standard forms of End-User Licenses.  Section 4.15\nof the Company Disclosure Schedule describes the material variations from the\nstandard form of End-User License, and as of the date hereof, neither the\nCompany nor any of its Subsidiaries has entered into any End-User Licenses which\ncontain terms materially different than as set forth in the standard forms of\nsuch agreements made available to Parent.\n\n          (h) The Company and each of its Subsidiaries has taken reasonable\nsecurity measures to safeguard and maintain the secrecy, confidentiality and\nvalue of, and its property rights in, all Company Intellectual Property.  All\nofficers, employees and consultants of the Company or any of its Subsidiaries\nwho have access to proprietary information or Company Intellectual Property have\nexecuted and delivered to the Company or such Subsidiary an agreement regarding\nthe protection of proprietary information and the assignment to the Company or\nany of its Subsidiaries of all Intellectual Property arising from the services\nperformed for the Company or any of its Subsidiaries by such persons.  No\ncurrent or prior officers, employees or consultants of the Company or any of its\nSubsidiaries claim any ownership interest in any Company Intellectual Property\nas a result of having been involved in the development of such property while\nemployed by or consulting to the Company or any of its Subsidiaries, or\notherwise.  Except for the Embedded Third Party Intellectual Property, all\nCompany Intellectual Property has been developed by employees of the Company or\nits Subsidiaries, within the course and scope of their employment.\n\n                                      -25-\n\n\n \n          (i) To the Company's knowledge, there are no material defects in the\nCompany's or any of its Subsidiaries' Products, and there are no errors in any\ndocumentation, specifications, manuals, user guides, promotional material,\ninternal notes and memos, technical documentation, drawings, flow charts,\ndiagrams, source language statements, demo disks, benchmark test results, and\nother written materials related to, associated with or used or produced in the\ndevelopment of the Company's or any of its Subsidiaries' Products (collectively,\nthe \"Design Documentation\"), which defects or errors would reasonably be\n     --------------------                                               \nexpected to have, individually or in the aggregate, a Material Adverse Effect on\nthe Company.  The occurrence in or use by (i) the computer software currently\nsold by the Company or any of its Subsidiaries (excluding third party software\nnot currently incorporated into the Products), or developed or modified by the\nCompany or any of its Subsidiaries on behalf of others, or (ii) to the Company's\nknowledge, third party software not currently incorporated into the Products, of\ndates on or after January 1, 2000 (the \"Millennial Dates\") will not adversely\n                                        ----------------                     \naffect the performance of the software with respect to date dependent data,\ncomputations, output or other functions (including without limitation,\ncalculating, computing and sequencing) and such software will create, sort and\ngenerate output data related to or including Millennial Dates without errors or\nomissions.\n\n          (j) No government funding or university or college facilities were\nused in the development of the Company's or any of its Subsidiaries' Products\nand such Products were not developed pursuant to any contract or other agreement\nwith any person or entity.\n\n          (k) Section 4.15 of the Company Disclosure Schedule lists all warranty\nclaims (including any pending claims) related to the Company's or any of its\nSubsidiaries' Products and the nature of such claims, except for customary\nproduct support and maintenance claims that are not material to the Company or\nany of its Subsidiaries.  Neither the Company nor any of its Subsidiaries has\nmade any material oral or written representations or warranties with respect to\nits Products.\n\n          (l) The Company and its Subsidiaries have been and are in compliance\nwith the Export Administration Act of 1979, as amended, and all regulations\npromulgated thereunder.\n\n          (m) As part of the Company Disclosure Schedule, the Company has\nprovided Parent a list (including names, addresses, contact names, telephone\nnumbers as well as the termination date and next renewal date of the agreement),\nwhich is complete in all material respects, of all agreements or other\narrangements pursuant to which the Company or any Subsidiary is obligated to\nprovide support services (such agreements, as supplemented below, are referred\nto collectively as the \"Maintenance Agreements\").  Except for any nonstandard\n                        ----------------------                               \nmaintenance agreements specified in Section 4.15(m) of the Company Disclosure\nSchedule (the \"Nonstandard Maintenance Agreements\"), all of the Maintenance\n               ----------------------------------                          \nAgreements are in all material respects in the form of the license agreement\nidentified as the Standard Maintenance Agreement set forth in the Company\nDisclosure Schedule (the \"Standard Maintenance Agreement\").  The versions of the\n                          ------------------------------                        \nproducts currently supported by the Company or any Subsidiary are set forth in\nthe Company Disclosure Schedule.  Prior to the Closing, the Company will\nsupplement the Company Disclosure Schedule with any addresses, contact names and\ntelephone numbers\n\n                                      -26-\n\n\n \nomitted from the initial Company Disclosure Schedule to include:  (i) all\nStandard Maintenance Agreements entered into between the date hereof and the\nClosing, and (ii) all Nonstandard Maintenance Agreements that were entered into\nbetween the date hereof and the Closing with the written consent of the Parent. \nSection 4.15(m) of the Company Disclosure Schedule sets forth and indicates the\nagreements with source code escrow provisions relative to the Company's\nProducts.\n\n     4.16  Agreements, Contracts and Commitments.  As of the date hereof,\n           -------------------------------------                           \nneither the Company nor any of its Subsidiaries is a party to or is bound by:\n\n          (a) any oral or written plan, contract or arrangement which requires\naggregate payments by the Company or any of its Subsidiaries in excess of\n$50,000, which provides for bonuses, pensions, deferred compensation, severance\npay or benefits, retirement payments, profit-sharing, or the like;\n\n          (b) any oral or written consulting agreement, contract or commitment\nwith any independent contractor or consultant other than those that are\nterminable by the Company or any of its Subsidiaries on no more than thirty (30)\ndays' notice without liability or financial obligation, or any oral or written\nconsulting agreement, contract or commitment with any independent contractor or\nconsultant under which any benefits of which are contingent upon the occurrence\nof a transaction involving the Company of the nature of any of the transactions\ncontemplated by this Agreement;\n\n          (c) any joint marketing agreement, joint development agreement, joint\nventure contract or agreement, or any other agreement currently in force under\nwhich the Company or any of its Subsidiaries have continuing obligations to\njointly market any product, technology or service and which may not be canceled\nwithout penalty upon notice of thirty (30) days or less, or any agreement\npursuant to which the Company or any of its Subsidiaries have continuing\nobligations to jointly develop any intellectual property that will not be owned,\nin whole or in part, by the Company or any of its Subsidiaries and which may not\nbe canceled without penalty upon notice of thirty (30) days or less, or which\nhas involved, or is expected to involve, a sharing of profits with other\npersons;\n\n          (d) any existing OEM agreement, VAR agreement, distribution agreement,\nvolume purchase agreement, or other similar agreement in which the annual amount\ninvolved in 1997 exceeded, or is expected to exceed in 1998, $50,000 in\naggregate amount or pursuant to which the Company or any of its Subsidiaries has\ngranted or received most favored customer provisions or exclusive marketing\nrights related to any product, group of products or territory;\n\n          (e) any agreement, contract, mortgage, indenture, lease, instrument,\nlicense, franchise, permit, concession, arrangement, commitment or authorization\nwhich may be, by its terms, terminated or breached by reason of the execution of\nthis Agreement, the Merger, or the consummation of the transactions contemplated\nhereby or thereby;\n\n                                      -27-\n\n\n \n          (f) except for trade indebtedness incurred in the ordinary course of\nbusiness, any loan, note, indenture, or other instrument evidencing or related\nin any way to indebtedness in excess of $50,000 incurred in the acquisition of\ncompanies or other entities, or any indebtedness in excess of $50,000 for\nborrowed money by way of direct loan, sale of debt securities, purchase money\nobligation, conditional sale, guarantee, indemnification or otherwise;\n\n          (g) any agreement, contract, or commitment containing covenants\npurporting to limit the Company's freedom or that of any of its Subsidiaries to\n(i) engage in any line of business, (ii) compete in any geographic area or with\nany third party, or (iii) grant any exclusive distribution rights;\n\n          (h) any agreement of indemnification or any guaranty other than any\nagreement of indemnification entered into in connection with the sale or license\nof software products in the ordinary course of business;\n\n          (i) any license agreement, either as licensor or licensee, excluding\nEnd-User Licenses, or any agreement, contract or commitment currently in force\nto license any third party to manufacture or reproduce any Company product,\nservice or technology except as a distributor in the normal course of business;\n\n          (j) any agreement, contract or commitment relating to capital\nexpenditures and involving future obligations in excess of $100,000;\n\n          (k) any agreement, contract or commitment currently in force relating\nto the disposition or acquisition by the Company or any of its Subsidiaries\nafter the date of this Agreement of a material amount of assets not in the\nordinary course of business or pursuant to which the Company has any material\nownership interest in any corporation, partnership, joint venture or other\nbusiness enterprise other than the Company's Subsidiaries;\n\n               (l) any other agreement, contract or commitment that is material\nto the Company or to any of its Subsidiaries.\n\n          Neither the Company nor any of its Subsidiaries, nor to the Company's\nknowledge any other party to any of the agreements, contracts or commitments to\nwhich the Company or any of its Subsidiaries is a party or by which any of them\nare bound that are required to be disclosed in the Company Disclosure Schedule\npursuant to Section 4.15 or this Section 4.16 (\"Company Contracts\") is, as of\n                                                -----------------            \nthe date hereof, in breach, violation or default under, any Company Contract,\nexcept for breaches, violations or defaults that in the aggregate would not have\na Material Adverse Effect.  Neither the Company nor any of its Subsidiaries has\nreceived written notice that it has breached, violated or defaulted under, any\nof the material terms or conditions of any Company Contract in such a manner as\nwould permit any other party to cancel or terminate such Company Contract, or\nwould permit any other party to seek material damages or other remedies (for any\nor all of such breaches, violations or defaults, in the aggregate).\n\n                                      -28-\n\n\n \n     4.17  Proprietary Information and Inventions Agreements.  Each current \n           -------------------------------------------------         \nand former employee, consultant and officer of the Company and each of its\nSubsidiaries has executed an agreement with the Company or a Subsidiary\nregarding confidentiality and proprietary information substantially in the form\nor forms delivered to Parent.  The Company, after reasonable investigation, is\nnot aware that any of its employees or consultants is in violation thereof, and\nthe Company and each of its Subsidiaries will use its best efforts to prevent\nany such violation.  All consultants to or vendors of the Company and each of\nits Subsidiaries with access to confidential information of the Company or any\nof its Subsidiaries are parties to a written agreement substantially in the\nform or forms provided to Parent under which, among other things, each such\nconsultant or vendor is obligated to maintain the confidentiality of\nconfidential information of the Company and its Subsidiaries.  The Company,\nafter reasonable investigation, is not aware that any of its consultants or\nvendors are in violation thereof, and the Company will use its best efforts to\nprevent any such violation.\n\n     4.18  No Conflict of Interest.  Except as expressly disclosed in the\n           -----------------------                                         \nSEC Documents, neither the Company nor any of its Subsidiaries is indebted,\ndirectly or indirectly, to any of its officers or directors or to their\nrespective spouses or children, in any amount whatsoever other than in\nconnection with expenses or advances of expenses incurred in the ordinary course\nof business or relocation expenses of employees.  To the Company's knowledge,\nnone of the officers or directors of the Company or any of its Subsidiaries, or\nany members of their immediate families, directly or indirectly, are indebted to\nthe Company or any of its Subsidiaries or have any direct or indirect ownership\ninterest in any firm or corporation with which the Company or any of its\nSubsidiaries is affiliated or with which the Company or any of its Subsidiaries\nhas a business relationship, or any firm or corporation which competes with the\nCompany or any of its Subsidiaries, except that officers, directors and\/or\nstockholders of the Company and its Subsidiaries may own stock in (but not\nexceeding two percent of the outstanding capital stock of) publicly traded\ncompanies that compete with the Company and its Subsidiaries.  To the Company's\nknowledge, none of the officers or directors of the Company or any of its\nSubsidiaries or any member of their immediate families is, directly or\nindirectly, interested in any material contract with the Company or any of its\nSubsidiaries.  Neither the Company nor any of its Subsidiaries is a guarantor or\nindemnitor of any indebtedness of any other person, firm or corporation.\n\n     4.19  Takeover Statutes Inapplicable.  No \"fair price,\" \"moratorium,\" \n           ------------------------------                     \n\"control share acquisition\" or other similar anti-takeover statute or\nregulation (each a \"Takeover Statute\") is applicable to the Company, any\n                    ----------------                                    \nSubsidiary of the Company, the Shares (and associated Rights), the Offer, the\nMerger or any of the other transactions contemplated by this Agreement.  The\nCompany has heretofore delivered to Parent a complete and correct copy of the\nresolutions of the Board of Directors of the Company approving the Offer, the\nMerger and this Agreement, and such approval is sufficient to render\ninapplicable to the Offer, the Merger, this Agreement and the transactions\ncontemplated by this Agreement the provisions of Section 203 of the DGCL.\n\n     4.20  Brokers and Finders.  Except for the Financial Advisor and the fees \n           -------------------                                             \npayable by the Company to such firm described in an engagement letter dated\nOctober 5, 1998, a complete and correct copy of which has been provided to\nParent on or prior to the date hereof,\n\n                                      -29-\n\n\n \nneither the Company nor any of its Subsidiaries has employed any broker or\nfinder or incurred any liability for any fee or commission to any broker,\nfinder or intermediary in connection with the transactions contemplated hereby.\n\n     4.21  Environmental Laws.\n           ------------------ \n\n          (a) The operations of the Company and its Subsidiaries comply in all\nmaterial respects with all applicable federal, state and local environmental\nlaws, statutes and regulations.\n\n          (b) To the Company's knowledge, the operations of the Company and its\nSubsidiaries are not the subject of any judicial or administrative proceeding\nalleging the violation of any federal, state or local environmental law, statute\nor regulation.\n\n          (c) The Company and its Subsidiaries have not been notified that their\noperations are the subject of any federal or state investigation pursuant to\nwhich the Company or any Subsidiary has been ordered to respond to a release of\nany hazardous or toxic waste or substance into the environment in violation of\nlaw.\n\n          (d) Each of the Company and its Subsidiaries has not filed any notice\nunder federal or state law indicating past or present treatment, storage or\ndisposal requiring a Part B permit or designation of \"interim status\" as defined\nunder 40 C.F.R. Parts 260-270 or any state equivalent of a hazardous or toxic\nwaste or substance as defined therein or reporting a spill or release of a\nhazardous or toxic waste or substance into the environment except in accordance\nwith applicable law.\n\n          (e) Each of the Company and its Subsidiaries has not released, as\ndefined in the Comprehensive Environmental Response Compensation and Liability\nAct (42 U.S.C. (S)9601 et seq.), any hazardous substance as defined therein into\n                       -- ---                                                   \nthe environment, except where such release could not, individually or in the\naggregate, reasonably be expected to have a Material Adverse Effect on the\nCompany and its Subsidiaries, taken as a whole;\n\n          (f) None of the operations of the Company or any Subsidiary involve\nthe generation, transportation, treatment or disposal as defined under 40 C.F.R.\nParts 260-270 or any state equivalent of hazardous waste as defined therein\nrequiring a Part B permit or designation of \"interim status\".\n\n          (g) No underground storage tanks are on the premises of the\nCompany or any Subsidiary.\n\n          (h) To the Company's knowledge, no lien in favor of any governmental\nauthority for (i) any liability under federal or state environmental laws or\nregulations, or (ii) damages arising from or costs incurred by such governmental\nauthority in response to a release of a hazardous or toxic waste or substance\ninto the environment has been filed or attached to the premises currently owned\nor leased by the Company or any Subsidiary.\n\n                                      -30-\n\n\n \n          (i) All material permits necessary for the continued conduct of the\nbusiness of the Company and its Subsidiaries for the transportation, transfer,\nrecycling, storage, use, treatment, manufacture, investigation or removal of any\nhazardous or toxic waste or substance have been obtained by the Company or any\nSubsidiary.  All such permits are valid and in full force and effect.  Each of\nthe Company and the its Subsidiaries has complied in all material respects with\nall covenants and conditions of such permits and no circumstances exist which\ncould cause any permit to be revoked, modified or rendered non-renewable upon\nthe payment of the permit fee or, to the best of the Company's knowledge, which\ncould impose upon the Company, any of the Company's Subsidiaries or the\nSurviving Corporation the obligation to obtain any additional permits for such\nactivities, absent a change in operations.\n\n          (j) Neither the Company nor any Subsidiary has exposed any persons in\na material manner to, nor received notice of any claim of injury due to exposure\nof any person to, hazardous or toxic wastes or substances manufactured, stored,\nused, distributed, disposed of, released or controlled by the Company or any\nSubsidiary.\n\n          (k) No hazardous or toxic wastes or substances are present on any\nproperty which has been owned, leased or occupied by the Company or any\nSubsidiary, for the conduct of its business which could reasonably be expected\nto result in a Material Adverse Effect on the Company and its Subsidiaries taken\nas a whole.\n\n          (l) No claim, complaint, or administrative proceeding has been brought\nor is currently pending against the Company or any Subsidiary relating to any\nliability of the Company or any Subsidiary existing or threatened with respect\nto the release of hazardous or toxic wastes or substances or as to the\ninvestigation or remediation of hazardous or toxic wastes or substances.\n\n          As used herein \"federal, state and local environmental laws, statutes\n                          -----------------------------------------------------\nor regulations\" means any and all applicable laws, rules, regulations, orders,\n--------------                                                                \ntreaties, statutes and codes promulgated by any local, state, federal or\ninternational governmental authority or agency which has jurisdiction over the\nenvironment and any portion of the current operations of the Company and its\nSubsidiaries, and which prohibits, regulates or controls any hazardous material\nor the transportation, storage, transfer, recycling, use, treatment,\nmanufacture, investigation, removal, remediation, release, sale or distribution\nof hazardous materials including, without limitation, the Comprehensive\nEnvironmental Response, Compensation and Liability Act (42 U.S.C. (S)9601 et\n                                                                          --\nseq.), the Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.),\n---                                                                 -- ---   \nthe Resource Conservation and Recovery Act (42 U.S.C. (S)6901 et seq.), the\n                                                              -- ---       \nFederal Water Pollution Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air\n                                                       -- ---                 \nAct (42 U.S.C. (S)7401 et seq.), the Toxic Substances Control Act, as amended\n                       -- ---                                                \n(15 U.S.C. (S)2601 et seq.), as these laws have been amended or supplemented to\n                   -- ---                                                      \ndate and any analogous state or local statutes and the regulations promulgated\nto date pursuant thereto.\n\n          As used herein, \"hazardous or toxic waste or substance\" means those\n                           -------------------------------------             \nsubstances which are regulated by or form the basis of liability under any\nfederal, state and local environmental laws, statutes or regulations because\nthey are radioactive, toxic or hazardous,\n\n                                      -31-\n\n\n \nincluding, without limitation: (a) asbestos, (b) oil and petroleum products,\n(c) explosives, (d) radioactive substances, pollutants or wastes, (e) urea\nformaldehyde-containing building materials, (f) polychlorinated biphenyls, (g)\nradon gas, and (h) ultra-hazardous or toxic substances, pollutants or wastes.\n\n     4.22  Rights Agreement.  The Rights Agreement has been amended to render \n           -----------------                                          \nthe Rights Agreement inapplicable to the Offer, the Merger, the Company\nStock Option, this Agreement, the Support Agreements, the Director Option\nTermination Agreements and any transaction contemplated hereby or thereby\nbetween the Company, Parent, Purchaser, and any such stockholders.  Such\namendment to the Rights Agreement is attached to the Company Disclosure\nSchedule.\n\n     4.23  Disclosure.  The Company has provided or made available to Parent \n           ----------                                                \ncopies of all documents and information requested by Parent on Parent's\ndiligence request lists dated September 16, 1998 and October 15, 1998, to the\nextent the items on such lists are applicable to the Company or any of its\nSubsidiaries.  The Company has made available to Parent true and correct copies\nof all minutes of meetings or actions by written consent of the boards of\ndirectors (including without limitation all committees thereof) and\nstockholders of the Company and its Subsidiaries, which minutes and actions by\nwritten consent reflect all actions taken by the boards of directors (including\nwithout limitation all committees thereof ) and stockholders of the Company and\nits Subsidiaries.\n\n                                   SECTION V\n\n                      COVENANTS OF THE COMPANY AND PARENT\n\n     5.1  Conduct of Business of the Company.  Except as contemplated by this \n          ----------------------------------  \nAgreement, during the period commencing on the date of this Agreement and\ncontinuing until the first to occur of the Cut-Off Date or the termination of\nthis Agreement in accordance with its terms, the Company and each of its\nSubsidiaries shall conduct its operations in the ordinary and usual course\nconsistent with past practice, and the Company and each of its Subsidiaries will\nendeavor to preserve intact its business organization, to keep available the\nservices of its officers and employees and to maintain satisfactory relations\nwith suppliers, contractors, distributors, licensors, licensees, customers and\nothers having business relationships with it.  Without limiting the generality\nof the foregoing and except as provided in this Agreement, prior to the Cut-Off\nDate, the Company shall not, and shall not permit any of its Subsidiaries to,\ndirectly or indirectly do, or propose to do, any of the following, without the\nprior written consent of Parent (which consent shall not be unreasonably\nwithheld):\n\n          (a) Declare or pay any dividends on or make any other distribution in\nrespect of any of its capital stock;\n\n          (b) Split, combine or reclassify any of its capital stock or issue or\nauthorize any other securities in respect of, in lieu of or in substitution for,\nshares of its capital stock, or repurchase, redeem or otherwise acquire any\nshares of its capital stock;\n\n                                      -32-\n\n\n \n          (c) Issue, deliver, encumber, sell or purchase any shares of its\ncapital stock or any securities convertible into, or warrants, options or other\nrights of any kind to acquire, any such shares of capital stock, or any other\nownership interest (including, without limitation, any phantom interest) (other\nthan the issuance of Company Common Stock upon the exercise of outstanding Stock\nOptions and Warrants);\n\n          (d) Amend or otherwise change its Certificate of Incorporation or\nBylaws (or other comparable organizational document);\n\n          (e) Acquire or agree to acquire by merging or consolidating with, or\nby purchasing a substantial portion of the assets of, or by any other manner,\nany business or any corporation, partnership, association or other business\norganization or division thereof;\n\n          (f) Sell, lease, license or otherwise dispose of any of its assets\n(including the Company Intellectual Property), other than End-User Licenses on\nterms consistent with the Standard License Agreement in the ordinary course of\nbusiness consistent with its past practice and other than insignificant amounts\nof assets that are not Company Intellectual Property;\n\n          (g) Incur, assume or pre-pay any indebtedness for borrowed money,\nguarantee any indebtedness or obligation of another person, issue or sell any\ndebt securities or options, warrants, calls or other rights to acquire any debt\nsecurities, enter into any \"keep well\" or other agreement to maintain any\nfinancial statement condition or enter into any arrangement having the economic\neffect of any of the foregoing other than (i) in connection with the financing\nof ordinary course trade payables consistent with past practice, or (ii) as\ncontemplated by this Agreement;\n\n          (h) Enter into or amend any contract or agreement other than in the\nordinary course of business consistent with past practice;\n\n          (i) Authorize any single capital expenditure which is in excess of\n$100,000 or capital expenditures which are, in the aggregate, in excess of\n$250,000 for the Company and its Subsidiaries taken as a whole;\n\n          (j) Increase the compensation payable or to become payable to its\nofficers or employees, except for increases in accordance with past practice in\nsalaries or wages of employees of the Company or its Subsidiaries who are not\nofficers of the Company or its Subsidiaries, or grant any severance or\ntermination pay to, or enter into any employment or severance agreement with,\nany director, officer or other employee of the Company or any of its\nSubsidiaries, or establish, adopt, enter into or amend any collective\nbargaining, bonus, profit sharing, thrift, compensation, stock option,\nrestricted stock, pension, retirement, deferred compensation, employment,\ntermination, severance or other plan, agreement, trust, fund, policy or\narrangement for the benefit of any director, officer or employee of the Company\nor any of its Subsidiaries;\n\n                                      -33-\n\n\n \n          (k) Take any action, other than reasonable and usual actions in the\nordinary course of business and consistent with past practice, with respect to\naccounting policies or procedures (including, without limitation, procedures\nwith respect to cash management, the payment of accounts payable and the\ncollection of accounts receivable);\n\n          (l) Make any tax election or settle or compromise any material\nfederal, state, local or foreign income tax liability, or execute or file with\nthe IRS or any other taxing authority any agreement or other document extending,\nor having the effect of extending, the period of assessment or collection of any\ntaxes;\n\n          (m) Amend or modify the warranty policy of the Company or any\nSubsidiary;\n\n          (n) Pay, discharge, satisfy, settle or compromise any suit, claim,\nliability or obligation (absolute, accrued, asserted or unasserted, contingent\nor otherwise), other than the payment, discharge or satisfaction, in the\nordinary course of business and consistent with past practice, of liabilities\nreflected or reserved against in the Company's balance sheet dated as of\nSeptember 30, 1998 or subsequently incurred in the ordinary course of business\nand consistent with past practice;\n\n          (o) Take any action that would result in any of the representations\nand warranties of the Company set forth in this Agreement becoming untrue in any\nmaterial respect or that would be reasonably likely to result in any of the\nconditions to the Offer or any of the conditions to the Merger set forth in\nArticle VII not being satisfied (provided, however, that the Board of Directors\nshall retain the right to modify or withdraw its recommendation with respect to\nthe Offer and the Merger pursuant to Section 5.3(b));\n\n          (p) Enter into, amend or extend any contracts, agreements, or\nobligations relating to the distribution, sale, sublicense or marketing by third\nparties of the Company's or any Subsidiary's products or products licensed by\nthe Company or any Subsidiary, other than agreements, extensions or amendments\nthat grant non-exclusive rights to such third parties and provide for\ntermination by the Company or any Subsidiary for convenience on not more than 60\ndays' notice;\n\n          (q) Materially revalue any of its assets (other than the booking of\nreserves in the ordinary course of business and consistent with past practices)\nor, except as required by a change in law or in generally accepted accounting\nprinciples or the rules of the SEC, make any change in accounting methods,\nprinciples or practices, including inventory accounting practices;\n\n          (r) Materially accelerate or delay collection of any notes or accounts\nreceivable in advance of or beyond their regular due dates or the dates when the\nsame would have been collected in the ordinary course of business;\n\n                                      -34-\n\n\n \n          (s) Materially delay or accelerate payment of any account payable\nbeyond or in advance of its due date or the date such liability would have been\npaid in the ordinary course of business; or\n\n          (t) Cancel or terminate any material insurance policy naming it as a\nbeneficiary or a loss payable payee or permit any such policy to lapse (it being\nunderstood that the Company and any Subsidiary may renew any insurance policy in\neffect as of the date of this Agreement).\n\n     5.2  Stockholder Meeting; Proxy Material; Information Statement.\n          ----------------------------------------------------------   \n\n          (a) If this Agreement is required by the DGCL to be approved by the\nCompany's stockholders, then the Company shall cause a meeting of its\nstockholders (the \"Stockholders' Meeting\") to be duly called and held as soon as\n                   ---------------------                                        \nreasonably practicable for the purpose of voting on the approval and adoption of\nthis Agreement and the transactions contemplated hereby.  The Board of Directors\nof the Company shall, subject to the terms of Section 5.3(b), recommend approval\nand adoption of this Agreement and the Merger by the Company's stockholders.  In\nconnection with such meeting, the Company (i) shall promptly prepare and file\nwith the SEC, use all reasonable efforts to have cleared by the SEC and\nthereafter mail to its stockholders as promptly as practicable the Proxy\nStatement and all other proxy materials for such meeting, (ii) shall notify\nParent of the receipt of any comments of the SEC with respect to the Proxy\nStatement and of any requests by the SEC for any amendment or supplement thereto\nor for additional information and shall provide to Parent promptly copies of all\ncorrespondence between the Company or any representative of the Company and the\nSEC, (iii) shall give Parent and its counsel the opportunity to review the Proxy\nStatement prior to its being filed with the SEC and shall give Parent and its\ncounsel the opportunity to review all amendments and supplements to the Proxy\nStatement and all responses to requests for additional information and replies\nto comments prior to their being filed with, or sent to, the SEC, (iv) shall,\nsubject to the fiduciary duties of its Board of Directors as advised by counsel,\nuse all reasonable efforts to obtain the necessary approvals by its stockholders\nof this Agreement and the transactions contemplated hereby and (v) shall\notherwise comply with all legal requirements applicable to such meeting.\n\n          (b) Notwithstanding the foregoing, in the event that Purchaser shall\nacquire at least 90% of the then outstanding Shares (and associated Rights), the\nparties hereto agree, at the request of Purchaser, subject to the provisions of\nArticle VII, to take all necessary and appropriate action, including the\npreparation and mailing of the Information Statement if the Purchaser determines\nthat such an Information Statement is appropriate or required, to cause the\nMerger to become effective, in accordance with Section 253 of the DGCL, as soon\nas reasonably practicable after such acquisition, without a meeting of the\nstockholders of the Company.\n\n     5.3  Third Party Acquisitions.\n          ------------------------   \n\n          (a) The Company agrees that neither it, nor any of its Subsidiaries,\nnor any of the employees, officers or directors of the Company or any of its\nSubsidiaries, nor the stockholders who have executed the Support Agreements (the\n\"Supporting Stockholders\") shall, \n -----------------------                                                    \n\n                                      -35-\n\n\n \nand the Company shall direct and cause the agents and representatives\n(including its Financial Advisor or any other investment banker and any\nattorney or accountant retained by it (collectively, \"Company Advisors\")) of it\n                                                      ----------------\nand each of its Subsidiaries not to, directly or indirectly, initiate, solicit,\nencourage or otherwise facilitate the making of any inquiries in respect of, or\nthe making of any proposal for, a Third Party Acquisition (as defined in\nSection 5.3(b) below).  The Company further agrees that neither it, nor any of\nits Subsidiaries, nor any of the employees, officers or directors of the\nCompany or any of its Subsidiaries, nor the Supporting Stockholders shall, and\nthe Company shall direct and cause all Company Advisors not to, directly or\nindirectly, engage in any negotiations concerning, or provide any information\nor data to, or have any discussions with, any Third Party (as defined in\nSection 5.3(b) below) relating to the proposal of a Third Party Acquisition, or\notherwise facilitate any effort or attempt to make or implement a Third Party\nAcquisition; provided, however, that if at any time prior to the acceptance \n             --------  -------                     \nby Purchaser for payment of Shares (and associated Rights) pursuant to the\nOffer, the Board of Directors of the Company determines in good faith, after\nconsultation with outside counsel, that it is necessary to do so in order to\ncomply with its fiduciary duties to the Company's stockholders under applicable\nlaw, the Company may, in response to an inquiry, proposal or offer for a Third\nParty Acquisition which was not solicited subsequent to the date hereof and\nthat does not result from a breach of this Section 5.3, (x) furnish only such\ninformation with respect to the Company and its Subsidiaries to any such person\npursuant to a customary confidentiality agreement as was delivered to Parent\nprior to the execution of this Agreement and (y) participate in the discussions\nand negotiations regarding such inquiry, proposal or offer. The Company shall\nimmediately cease and cause to be terminated any existing activities,\ndiscussions or negotiations with any Third Parties conducted heretofore with\nrespect to any of the foregoing, and to promptly request each Third Party that\nhas heretofore executed a confidentiality agreement in connection with its\nconsideration of acquiring the Company or any of its Subsidiaries, if any, to\nreturn to the Company all confidential information heretofore furnished to such\nThird Party by or on behalf of the Company.  The Company shall take the\nnecessary steps to promptly inform all Company Advisors of the obligations\nundertaken in this Section 5.3(a).  The Company agrees to notify Parent\npromptly (and in any event within 24 hours) if (i) any inquiries relating to or\nproposals for a Third Party Acquisition are received by the Company, any of its\nSubsidiaries or any of the Company Advisors, (ii) any information about the\nCompany or its Subsidiaries is requested from the Company, its Subsidiaries or\nany of the Company Advisors, or (iii) any negotiations or discussions in\nconnection with a possible Third Party Acquisition are sought to be initiated\nor continued with the Company or any of the Company Advisors indicating, in\neach such case, in connection with such notice, the principal terms and\nconditions of any proposals or offers, including the identity of the offering\nparty, and thereafter shall keep Parent informed in writing, on a reasonably\ncurrent basis, on the status and terms of any such proposals or offers and the\nstatus of any such negotiations or discussions.\n\n          (b) Except as permitted by this Section 5.3(b), the Board of Directors\nof the Company shall not withdraw its recommendation of the Offer or the Merger\nand other transactions contemplated hereby or approve or recommend, or cause the\nCompany or any of its Subsidiaries to enter into any agreement with respect to,\nany Third Party Acquisition.  Notwithstanding the preceding sentence, if the\nBoard of Directors of the Company determines in its good faith judgment, after\nconsultation with outside counsel, that it is necessary to do so in\n\n                                      -36-\n\n\n \norder to comply with its fiduciary duties to the Company's stockholders under\napplicable law, the Board of Directors may withdraw or alter its recommendation\nof the Offer or the Merger and the other transactions contemplated hereby, or\napprove or recommend or cause the Company to enter into an agreement with\nrespect to a Superior Proposal (as defined below), but in each case only (i)\nafter providing written notice to Parent (a \"Notice of Superior Proposal\")\n                                             --------------------------- \nadvising Parent that the Board of Directors has received a Superior Proposal,\nspecifying the material terms and conditions of such Superior Proposal and\nidentifying the person or entity making such Superior Proposal and (ii) if\nParent does not, within five (5) business days (or within two (2) business days\nwith respect to any amendment to any Superior Proposal which was noticed at\nleast five (5) business days prior to such amendment) after Parent's receipt of\nthe Notice of Superior Proposal, make an offer which the Board of Directors of\nthe Company determines in its good faith judgment (based on the advice of its\nFinancial Advisor or another financial adviser of nationally recognized\nreputation) to be as favorable to the Company's stockholders as such Superior\nProposal; provided, however, that the Company shall not be entitled to enter \n          --------  -------          \ninto any agreement with respect to a Superior Proposal unless this Agreement is\nconcurrently terminated by its terms pursuant to Section 8.1(e)(i).\n\n          (c) For purposes of this Agreement, \"Third Party Acquisition\" means\n                                               -----------------------       \nthe occurrence of any of the following events:  (i) the acquisition of the\nCompany by merger or otherwise by any person or entity (which includes a\n\"person\" as such term is defined in Section 13(d)(3) of the Exchange Act) other\nthan Parent, the Purchaser or any affiliate thereof (a \"Third Party\"); (ii) the\n                                                        -----------            \nacquisition by a Third Party of 20% or more of the total assets of the Company\n(other than the purchase of the Company's products in the ordinary course of\nbusiness); (iii) the acquisition by a Third Party of 20% or more of the\noutstanding Shares; (iv) the adoption by the Company of a plan of partial or\ncomplete liquidation or the declaration or payment of an extraordinary dividend;\n(v) the repurchase by the Company of 20% or more of the outstanding Shares; or\n(vi) the acquisition by the Company by merger, purchase of stock or assets,\njoint venture or otherwise of a direct or indirect ownership interest or\ninvestment in any business whose annual revenues, net income or assets is equal\nto or greater than 20% of the annual revenues, net income or assets of the\nCompany.  For purposes of this Agreement, a \"Superior Proposal\" means any bona\n                                             -----------------                \nfide proposal to acquire directly or indirectly, for consideration consisting of\ncash and\/or securities, 100% of the Shares then outstanding or all or\nsubstantially all the assets of the Company and otherwise on terms which the\nBoard of Directors of the Company by a majority vote determines in its good\nfaith judgment (based on consultation with its Financial Advisor or another\nfinancial adviser of nationally recognized reputation) to be reasonably capable\nof being completed (taking into account all legal, financial, regulatory and\nother aspects of the proposal and the person or entity making the proposal,\nincluding the availability of financing therefor) and more favorable to the\nCompany's stockholders than the Offer and the Merger.\n\n          (d) The Company shall not be prohibited from disclosing to its\nstockholders a position contemplated by Rules 14d-9 and 14e-2 promulgated under\nthe Exchange Act to the extent such position is arrived at in compliance with\nthis Section 5.3.\n\n                                      -37-\n\n\n \n     5.4  Section 203 of the DGCL.  From and after the date of this Agreement \n          -----------------------                                     \nuntil the earlier of the termination of this Agreement pursuant to its terms or\nthe Effective Time, the Company will not approve any acquisition of shares of\nCompany Common Stock by any person (other than Parent, the Purchaser or their\nrespective affiliates) which would result in such person becoming an\n\"interested stockholder\" (as such term is defined in Section 203 of the DGCL)\nor otherwise become subject to Section 203 of the DGCL, unless such acquisition\nis related to a Superior Proposal and the Company has complied with Section 5.3\nand, if applicable, Section 8.3.\n\n     5.5  Company Stock Option.\n          -------------------- \n\n     (a) Grant of Company Stock Option.  Subject to Section 8.4, the Company \n         -----------------------------   \nhereby grants to Parent an irrevocable option (the \"Company Stock Option\") \n                                                    --------------------\nto purchase, for $7.00 per share in cash, newly issued shares of Company Common\nStock representing 19.9% of the Company's total outstanding Company Common\nStock (and associated Rights), which percentage shall be calculated after\ntaking into account the exercise in full of the Company Stock Option.\n\n     (b) Term of Company Stock Option.  Parent may exercise the Company Stock\n         ----------------------------                                        \nOption, in whole or in part, at any time or from time to time from the day (the\n\"Exercise Commencement Date\") on which either an event described in Section\n --------------------------                                                \n8.3(a) or (b) has occurred or a tender offer to purchase fifteen percent (15%)\nor more of the Shares is consummated by a Third Party, whichever is earlier,\nuntil the day (the \"Option Termination Date\") which is the earlier of (i) the\n                    -----------------------                                  \nEffective Time, or (ii) one (1) year after the termination of this Agreement.\n\n     (c) Exercise of Company Stock Option.  If Parent wishes to exercise the\n         --------------------------------                                   \nCompany Stock Option, it shall do so by giving the Company notice to such\neffect, specifying the number of shares of Company Common Stock to be purchased\nand a place and date not earlier than one (1) business day nor later than ten\n(10) business days from the date such notice is given for the closing of the\npurchase.  If any such closing cannot be consummated on the date specified by\nParent in its notice of election to exercise the Company Stock Option as a\nresult of any restriction arising under any applicable law or regulation, the\ndate for such closing shall be on such date within five (5) days following the\ncessation of all such restrictions as Parent may specify.\n\n     (d) Payment and Delivery of Company Common Stock.  At any closing in\n         --------------------------------------------                    \nconnection with the Company Stock Option, (i) Parent shall make payment to the\nCompany of the aggregate purchase price for the shares of Company Common Stock\nto be purchased by delivery to the Company of a certified, cashier's or bank\ncheck payable to the order of the Company or, if mutually agreed, by wire\ntransfer of funds to an account designated by the Company, and (ii) the Company\nshall deliver to Parent a certificate or certificates representing the shares of\nCompany Common Stock so purchased, registered in the name of Parent or its\ndesignee.\n\n                                      -38-\n\n\n \n     (e) Certain Adjustments.  In the event of any change in the Company's\n         -------------------                                              \ncapital stock by reason of stock dividends, stock splits, mergers,\nconsolidations, recapitalizations, combinations, conversions, exchanges of\nShares, extraordinary or liquidating dividends, or other changes in the\ncorporate or capital structure of the Company which would have the effect of\ndiluting or changing Parent's rights hereunder, the number and kind of capital\nstock subject to the Company Stock Option and the purchase price per share (but\nnot the total purchase price) shall be appropriately and equitably adjusted so\nthat Parent shall receive upon exercise of the Company Stock Option the number\nand class of capital stock or other securities or property that Parent would\nhave received in respect of the shares of Company Common Stock purchasable upon\nexercise of the Company Stock Option if the Company Stock Option had been\nexercised immediately prior to such event.\n\n     (f) Exercise Commencement Date.  At any time or from time to time after the\n         --------------------------                                             \nExercise Commencement Date, Parent may, at its election, upon two (2) days'\nnotice to the Company, surrender all or a part of the Company Stock Option to\nthe Company, in which event the Company shall pay to Parent, on the day of each\nsuch surrender and in consideration thereof, against tender by Parent of an\ninstrument evidencing such surrender, an amount in cash per share of Company\nCommon Stock (the rights to which are surrendered) equal to the excess of (i)\nthe greater of (x) the closing price of the Company's Common Stock on The Nasdaq\nStock Market on the date of surrender (or the closing price as reported by any\nother applicable securities exchange if not listed on The Nasdaq Stock Market,\nor if not actively traded, the fair market value as determined by investment\nbankers chosen by the Parent) and (y) the price per Share to be paid in the\nThird Party Acquisition or tender offer which created the Exercise Commencement\nDate, if any, over (ii) the Merger Price.  If all or a portion of the price per\nShare to be paid in such Third Party Acquisition or tender offer consists of\nnon-cash consideration, then the price per Share referred to in clause (i) above\nshall be the cash consideration per Share, if any, plus the fair market value of\nthe non-cash consideration per Share as set forth in such Third Party\nAcquisition or tender offer or, if not so set forth, as determined by investment\nbankers chosen by the Parent.  Upon exercise of its right to surrender the\nCompany Stock Option or any portion thereof and the receipt by Parent of cash\npursuant to this Section 5.5(f), any and all rights of Parent to purchase shares\nof Company Common Stock with respect to the portion of the Company Stock Option\nsurrendered pursuant to this Section 5.5(f) shall be terminated.\n\n     (g) Listing and Reservation of Company Common Stock; Notification of Record\n         -----------------------------------------------------------------------\nDates.\n----- \n\n     (i) Promptly after the date hereof, and from time to time thereafter if\nnecessary, the Company will apply to list all of the Company Common Stock\nsubject to the Company Stock Option on the Nasdaq National Market and will use\nits best efforts to obtain approval of such listing as soon as practicable.\n\n     (ii) The Company has taken all necessary corporate and other action to\nauthorize, reserve, and permit it to issue, and at all times from the date\nhereof until such time as the obligation to deliver Company Common Stock upon\nthe exercise of the Company Stock Option terminates, will have reserved for\nissuance, upon any exercise of the Company\n\n                                      -39-\n\n\n \nStock Option, the number of Company Common Stock subject to the Company Stock\nOption (less the number of shares of Company Common Stock previously issued\nupon any partial exercise of the Company Stock Option or as to which the\nCompany Stock Option may no longer be exercised).\n\n     (iii)  The Company shall give Parent at least ten (10) days' prior written\nnotice before setting the record date for determining the holders of record of\nCompany Common Stock entitled to notice of, or to vote on, any matter, to\nreceive any dividend or distribution or to participate in any rights offering or\nother matter, or to receive any other benefit or right, with respect to Company\nCommon Stock.\n\n     (h) Registration of the Company Common Stock.\n         ---------------------------------------- \n\n     (i) If Parent requests the Company in writing to register under the\nSecurities Act any of the shares of Company Common Stock owned by Parent, the\nCompany will use its best efforts to cause the offering of the shares of Company\nCommon Stock so specified in such request to be registered a soon as practicable\nso as to permit the sale or other distribution by Parent of the shares of\nCompany Common Stock specified in its request (and to keep such registration in\neffect for a period of at least ninety (90) days), and in connection therewith\nprepare and file as promptly as reasonably possible (but in no event later than\nsixty (60) days from receipt of Parent's request) a registration statement under\nthe Securities Act to effect such registration on an appropriate form, which\nwould permit the sale of the shares of Company Common Stock by Parent in the\nmanner specified by Parent in its request.  The Company shall not be obligated\nto make effective more than three (3) registration statements pursuant to the\nforegoing sentence.  Upon written notice to Parent, the Company may postpone\neffecting a registration pursuant to this Section 5.5 on one occasion during any\nperiod of twelve (12) consecutive months for a reasonable time specified in the\nnotice but not exceeding ninety (90) days (which period may not be extended or\nrenewed), if (A) an investment banking firm of recognized national standing\nshall advise the Company and Parent in writing that effecting the registration\nwould materially and adversely affect an offering of securities of the Company\nthe preparation of which had then been commenced, or (B) the Company is in\npossession of material non-public information the disclosure of which during the\nperiod specified in such notice the Company believes, in its reasonable\njudgment, would not be in the best interests of the Company.\n\n     (ii) The Company shall notify Parent in writing not less than ten (10) days\nprior to filing a registration statement under the Securities Act (other than a\nfiling on Form S-4 or S-8) with respect to any shares of Company Common Stock of\nthe Company's intention so to file.  If Parent wishes to have any portion of its\nshares of Company Common Stock included in such registration statement, it shall\nadvise the Company in writing to that effect within two (2) business days\nfollowing receipt of such notice, and the Company will thereupon include the\nnumber of shares of Company Common Stock indicated by Parent under such\nregistration statement.  If such registration involves an underwritten public\noffering and the managing underwriter shall advise the Company and Parent that\nin its view the number of shares of Company Common Stock requested to be\nincluded in such registration (including any\n\n                                      -40-\n\n\n \nsecurities which the Company proposes to be included) exceeds the largest\nnumber of shares which can be sold without having an adverse effect on such\noffering, including the price at which such shares can be sold (the \"Maximum\n                                                                     -------\nOffering Size\"), the Company will include in such registration, up to the \n-------------                            \nMaximum Offering Size: first, all securities proposed to be registered by the\nCompany, and second, shares of Company Common Stock requested to be registered\nby Parent.\n\n     (iii)  The Company shall pay all fees and expenses in connection with any\nregistration pursuant to this Section 5.5 other than underwriting discounts and\ncommissions to brokers or dealers and shall indemnify Parent, its officers,\ndirectors, agents, other controlling persons and any underwriters retained by\nParent in connection with such sale of such shares of Company Common Stock in\nthe customary way, and agree to customary contribution provisions with such\npersons, with respect to claims, damages, losses and liabilities (and any\nexpenses relating thereto) arising (or to which Parent, its officers, directors,\nagents, other controlling persons or underwriters may be subject) in connection\nwith any such offer or sale under the federal securities laws or otherwise,\nexcept for information furnished in writing by Parent or its underwriters to the\nCompany.  Parent and its underwriters, respectively, shall indemnify the Company\nto the same extent with respect to information furnished in writing to the\nCompany by Parent and such underwriters.\n\n     5.6  SEC Reports.  From and after the date of this Agreement until the \n          -----------                                                     \nearlier of the termination of this Agreement pursuant to its terms or the\nEffective Time, the Company will timely file all reports required to be filed by\nit under the Exchange Act.\n\n     5.7  Indemnification.  Parent agrees that all rights to indemnification \n          ---------------                                     \nexisting in favor of directors, officers or employees of the Company (the\n\"Indemnified Persons\") as provided in the Company's Certificate of \n -------------------                                              \nIncorporation, Bylaws or any indemnification agreements listed in Section 5.7 of\nthe Company Disclosure Schedule, with respect to matters occurring through the\nEffective Time, shall survive the Merger and shall continue in full force and\neffect for a period of not less than six (6) years from the Effective Time.\nEffective upon the Effective Time, to the fullest extent permitted by law,\nParent shall be directly bound by, and shall guarantee the Company's and the\nSurviving Corporation's performance of, the Company's and the Surviving\nCorporation's obligations described in the prior sentence for a period of six\n(6) years after the Effective Time.  If Parent, the Surviving Corporation or any\nof either of its successors or assigns (i) consolidates with or merges into any\nother person and shall not be the continuing or surviving corporation or entity\nof such consolidation or merger or (ii) transfers all or substantially all of\nits properties and assets to any person, none of which actions are restricted by\nthis Section 5.7, then and in each such case, proper provision shall be made so\nthat the successors and assigns of Parent and the Surviving Corporation assume\nthe obligations set forth in this Section 5.7.\n\n     5.8  Rights Agreement.  The Company shall take all necessary action to\n          -----------------                                                \nrender the Rights Agreement inapplicable to the Offer, the Merger, the Company\nStock Option, this Agreement, the Support Agreements, the Director Option\nTermination Agreements and any other transaction contemplated hereby and\nthereby.\n\n                                      -41-\n\n\n \n                                   ARTICLE VI\n\n                             ADDITIONAL AGREEMENTS\n\n     6.1  Access to Information.  Between the date of this Agreement and\n          ---------------------                                           \nthe Cut-Off Date, the Company will afford to Parent and its authorized\nrepresentatives for the transactions contemplated hereby reasonable access at\nall reasonable times to the officers, employees, agents, properties, offices and\nall other facilities, books and records of the Company as Parent may reasonably\nrequest.  Additionally, the Company will permit Parent and its authorized\nrepresentatives for the transactions contemplated hereby to make such\ninspections of the Company, each of its Subsidiaries and each of their\noperations at all reasonable times as it may reasonably require and will cause\nits officers, employees and agents to furnish Parent with such financial and\noperating data and other information with respect to the business and properties\nof the Company and each of its Subsidiaries as Parent may from time to time\nreasonably request.  No investigation pursuant to this Section 6.1 shall affect\nany representation or warranty in this Agreement of any party hereto or any\ncondition to the obligations of the parties hereto.\n\n     6.2  Legal Conditions to Offer and Merger.\n          ------------------------------------   \n\n          (a) Prior to the Effective Time, the parties shall take, or cause to\nbe taken, all such actions as may be necessary or appropriate in order to\neffectuate, as expeditiously as practicable, the Offer and the Merger and the\nother transactions contemplated by this Agreement, including any necessary\nconsents and waivers.\n\n          (b) Without limiting the foregoing, the Company will take, and will\ncause each of its Subsidiaries to take, all reasonable actions necessary to\ncomply promptly with all legal requirements which may be imposed on the Company\nor any of its Subsidiaries with respect to the Offer and the Merger (including\nfurnishing all information required under the HSR Act and under applicable\nantitrust laws of any foreign country) and will take, and will cause each of its\nSubsidiaries to take, all reasonable actions necessary to cooperate promptly\nwith and furnish information to the Purchaser or Parent in connection with any\nsuch requirements imposed upon the Purchaser or Parent in connection with the\nOffer and the Merger.  The Company will take, and will cause each of its\nSubsidiaries to take, all reasonable actions necessary to obtain (and will take\nand cause to be taken all reasonable actions necessary to cooperate promptly\nwith the Purchaser and Parent in obtaining) any consent, authorization, order or\napproval of, or any exemption by, any Governmental Entity, or other third party,\nrequired to be obtained or made by the Company or any Subsidiary (or by the\nPurchaser or Parent) in connection with the Offer or the Merger or the taking of\nany action contemplated thereby or by this Agreement.\n\n          (c) Without limiting the foregoing, the Purchaser and Parent will take\nall reasonable actions necessary to comply promptly with all legal requirements\nwhich may be imposed on them with respect to the Offer and the Merger (including\nfurnishing all information required under the HSR Act and under applicable\nantitrust laws of any foreign country) and will take all reasonable actions\nnecessary to cooperate promptly with and furnish information to the Company in\nconnection with any such requirements imposed upon the Company or any of its\n\n                                      -42-\n\n\n \nSubsidiaries in connection with the Offer and the Merger.  The Purchaser and\nParent will take all reasonable actions necessary to obtain (and will take all\nreasonable actions necessary to cooperate promptly with the Company in\nobtaining) any consent, authorization, order or approval of, or exemption by,\nany Governmental Entity, or other third party, required to be obtained or made\nby the Purchaser or Parent (or by the Company or any of its Subsidiaries) in\nconnection with the Offer or the Merger or the taking of any action contemplated\nthereby or by this Agreement.\n\n          (d) Notwithstanding anything to the contrary in this Agreement,\nincluding without limitation Section 6.2(c),  as a result of filings made with\nGovernmental Entities pursuant to this Agreement, neither Parent nor any of its\nsubsidiaries, nor the Company nor any of its Subsidiaries, shall be required to\ndivest any of their respective businesses, product lines or assets, or agree to\nany other limitation with respect to its business.\n\n     6.3  Confidentiality Agreement.  The Company and Parent acknowledge that \n          -------------------------  \nthe existing confidentiality agreement between such parties (the\n\"Confidentiality Agreement\") shall remain in full force and effect at all times\nprior to the Effective Time and after any termination of this Agreement, and\nsuch parties agree to comply with the terms of such Agreement.\n \n     6.4  Public Announcements.  The Purchaser, Parent and the Company will \n          --------------------  \nconsult with each other before issuing any press release or otherwise making\nany public statements with respect to the Offer, the Merger or any transaction\ncontemplated hereby and shall not issue any such press release or make any such\npublic statement except as they may mutually agree unless required so to do by\nlaw or by obligations pursuant to any listing agreement with any national\nsecurities exchange or the National Association of Securities Dealers, Inc. The\nCompany and Parent have agreed as to the form of joint press release announcing\nexecution of this Agreement.\n \n     6.5  Company Stock Plans.\n          -------------------\n \n          (a) At the Effective Time, each outstanding Stock Option to purchase\nshares of Company Common Stock under the Company Stock Option Plans shall\nterminate and each holder thereof shall receive in exchange for such termination\na cash payment equal to, subject to Section 6.5(f) below, the excess, if any, of\n(i) the Merger Price times the number of shares of Company Common Stock subject\nto such option which are vested and exercisable (including such number of shares\nthat become vested and exercisable by its terms as a result of the transactions\ncontemplated by this Agreement), over (ii) the aggregate exercise price of such\noption. The fair market value of the Company Common Stock on the Effective Date\nshall be deemed to equal the Merger Price.\n\n          (b) Prior to the Effective Time, the Company shall take all actions\n(including if appropriate amending the terms of the Company Stock Option Plans\nor obtaining the consent of holders of Stock Options) that are necessary to give\neffect to the transactions contemplated by Section 6.5(a).\n\n                                      -43-\n\n\n \n          (c) The Company shall take all steps required to terminate the Company\nStock Option Plans immediately after the Effective Time.\n\n          (d) The Company shall take all actions reasonably necessary to cause\nthe last day of the then-current \"offering,\" as such term is defined in the\nCompany's 1995 Employee Stock Purchase Plan (the \"Purchase Plan\"), to be\n                                                  -------------         \nDecember 15, 1998 (the \"Final Purchase Date\"), and shall apply on the Final\n                        -------------------                                \nPurchase Date the funds within each participant's accumulated payroll account as\nof such date to the purchase of whole shares of  Company Common Stock in\naccordance with the terms of the Purchase Plan.  No new offering shall commence\nunder the Purchase Plan following the Final Purchase Date.\n\n          (e) The Company shall take all steps required to terminate the\nPurchase Plan immediately after the Effective Time.\n\n          (f) Payments pursuant to Section 6.5(a) above shall be subject to any\napplicable tax withholding required under the Code, the rules and regulations\nthereunder or any provision of state, local or foreign tax law.  To the extent\nthat amounts are so withheld, such withheld amounts shall be treated for all\npurposes of this Agreement as having been paid to the holder of the Stock\nOptions.\n\n     6.6  Certain Employee Benefits Matters.  Employees of the Company at the \n          ---------------------------------                                \nEffective Time will be provided with employee benefit plans by the Surviving\nCorporation or Parent, except with respect to such Company Benefit Plans Parent\ndetermines that it will continue in effect, which employee benefits will in the\naggregate be reasonably equivalent to the employee benefits generally offered to\nParent's employees of like position and responsibility.\n\n     6.7  Notice of Certain Events.  The Company shall notify Parent, and\n          ------------------------                                         \nParent shall promptly notify the Company, of:\n\n          (i) receipt of any notice or other communication from any person\nalleging that the consent of such person is or may be required in connection\nwith the transactions contemplated by this Agreement;\n\n          (ii) receipt of any notice or other communication from any\nGovernmental Entity in connection with the transactions contemplated by this\nAgreement;\n\n          (iii)  receipt of notice that any actions, suits, claims,\ninvestigations or proceedings have been commenced or, to the knowledge of the\nCompany, threatened, against or involving the Company, any of its Subsidiaries\nor Parent, as applicable, which, if pending on the date of this Agreement, would\nhave been required to have been disclosed pursuant to Section 4.9 or which\nrelate to the consummation of the transactions contemplated by this Agreement;\n\n          (iv) the occurrence or non-occurrence of any event the occurrence or\nnon-occurrence of which would be likely to cause any representation or warranty\nof it (and, in the case of Parent, of the Purchaser) contained in this Agreement\nto be untrue or inaccurate; and\n\n                                      -44-\n\n\n \n          (v) any failure of the Company, Parent or the Purchaser, as the case\nmay be, to comply with or satisfy any covenant, condition or agreement to be\ncomplied with or satisfied by it hereunder; provided, however, that the delivery\n                                            --------  -------                   \nof any notice pursuant to this Section 6.7 shall not limit or otherwise affect\nthe remedies available hereunder to the party receiving such notice.\n\n     6.8  Obligations of Purchaser.  Parent will take all action necessary to \n          ------------------------                                \ncause the Purchaser to perform its obligations under this Agreement and to\nconsummate the Merger on the terms and conditions set forth in this Agreement.\n\n     6.9  Voting of Shares.  Parent agrees (i) to cause the Purchaser and\n          ----------------                                                 \nany other Person controlled by Parent to vote all Shares beneficially owned by\nit in favor of adoption of this Agreement and the Merger at the Stockholders'\nMeeting, if any such meeting shall be required by the DGCL, and (ii) if no\nStockholders' Meeting shall be required by the DGCL, to cause the Purchaser to\nfile a certificate of merger providing for the Merger of the Purchaser with and\ninto the Company as soon as reasonably practicable under applicable regulatory\nrequirements and law.\n\n     6.10  Expenses.  Except as otherwise provided in Section 8.3, whether or \n           --------                                                 \nnot the Merger shall be consummated, all costs and expenses incurred in\nconnection with this Agreement and the Merger and the other transactions\ncontemplated hereby shall be paid by the party incurring such cost or expense.\n\n     6.11  Takeover Statutes.  If any Takeover Statute is or may become\n           -----------------                                             \napplicable to the Offer, the Merger or the other transactions contemplated by\nthis Agreement, each of Parent and the Company and their respective Boards of\nDirectors shall grant such approvals and take such lawful actions as are\nnecessary to ensure that such transactions may be consummated as promptly as\npracticable on the terms contemplated by this Agreement and otherwise act to\neliminate or minimize the effects of such statute and any regulations\npromulgated thereunder on such transactions.\n\n                                  ARTICLE VII\n\n                                   CONDITIONS\n\n     7.1  Conditions of Each Party's Obligation to Effect the Merger. The \n          ----------------------------------------------------------     \nrespective obligation of each party to effect the Merger is subject to the\nsatisfaction prior to the Closing Date of the following conditions:\n\n          (a) Stockholder Approval.  This Agreement and the Merger shall have\n              --------------------                                           \nbeen approved and adopted by the affirmative vote or consent of the stockholders\nof the Company to the extent required by the DGCL and the Certificate of\nIncorporation of the Company.\n\n          (b) No Injunctions or Restraints.  No temporary restraining order,\n              ----------------------------                                  \npreliminary or permanent injunction or other order issued by any Governmental\nEntity of\n\n                                      -45-\n\n\n \ncompetent jurisdiction nor any statute, rule, regulation or executive\norder promulgated or enacted by any Governmental Entity, nor other legal\nrestriction, restraint or prohibition arising under the authority of any\nGovernmental Entity, preventing the consummation of the Merger shall be in\neffect; provided, however, that each of the parties shall have used reasonable\n        --------  -------                                                     \nefforts to prevent the entry of any such injunction or other order and to appeal\nas promptly as practicable any injunction or other order that may be entered.\n\n          (c) Regulatory Consents.  The waiting period applicable to the\n              --------------------                                      \nconsummation of the Merger under the HSR Act and under any applicable foreign\nantitrust laws shall have expired or been terminated.\n\n          (d) The Offer.  The Purchaser shall have accepted for payment and paid\n              ---------                                                         \nfor Shares (and associated Rights) pursuant to the Offer in accordance with the\nterms hereof.\n\n     7.2  Conditions to Obligations of  Parent and the Purchaser.  The\n          ------------------------------------------------------        \nobligations of Parent and the Purchaser to effect the Merger are also subject to\nthe satisfaction or waiver by Parent prior to the Effective Time of the\nfollowing conditions:\n\n          (a) Representations and Warranties.  The representations and\n              ------------------------------                          \nwarranties of the Company set forth in this Agreement shall be true and correct\nin all material respects as of the date of this Agreement and as of the Closing\nDate as though made on and as of the Closing Date.\n\n          (b) Performance of Obligations of the Company.  The Company shall have\n              -----------------------------------------                         \nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Closing Date.\n\n     7.3  Conditions to Obligations of the Company.  The obligations of the \n          ----------------------------------------                       \nCompany to effect the Merger are also subject to the satisfaction or waiver by\nthe Company prior to the Effective Time of the following conditions:\n\n          (a) Representations and Warranties.  The representations and\n              ------------------------------                          \nwarranties of Parent and the Purchaser set forth in this Agreement shall be true\nand correct in all material respects as of the date of this Agreement and as of\nthe Closing Date as though made on and as of the Closing Date.\n\n          (b) Performance of Obligations of Parent and the Purchaser.  Each of\n              ------------------------------------------------------          \nParent and the Purchaser shall have performed in all material respects all\nobligations required to be performed by it under this Agreement at or prior to\nthe Closing Date.\n\n                                      -46-\n\n\n \n                                  ARTICLE VIII\n\n                                  TERMINATION\n\n     8.1  Termination.  This Agreement may be terminated and the Merger may \n          -----------                                                    \nbe abandoned at any time prior to the Effective Time, notwithstanding any\nrequisite approval of this Agreement and the transactions contemplated hereby by\nthe stockholders of the Company, only:\n\n          (a) by mutual written consent duly authorized by the Boards of\nDirectors of the Company, Parent and the Purchaser;\n\n          (b) by either Parent or the Company if any Governmental Entity shall\nhave issued an order, decree, ruling or taken any other action permanently\nrestraining, enjoining or otherwise prohibiting the acceptance for payment of,\nor payment for, Shares (and associated Rights) pursuant to the Offer or the\nMerger and such order, decree, ruling or other action shall have become final\nand nonappealable;\n\n          (c) by either Parent or the Company if (i)  the Offer shall have\nterminated or expired in accordance with its terms without the Purchaser having\naccepted for payment any Shares (and associated Rights) pursuant to the Offer;\nor (ii) the Purchaser shall not have accepted for payment any Shares (and\nassociated Rights) pursuant to the Offer within one hundred twenty (120) days\nfollowing the commencement of the Offer; provided, however, that the right to\n                                         -------- --------                   \nterminate this Agreement pursuant to this Section 8.1(c) shall not be available\nto any party (or to any of its affiliates) that has failed to perform or\nbreached in any material respect any of its obligations under this Agreement,\nwhich results in the failure of any condition set forth in Annex I or a material\n                                                           ------               \nbreach of a representation or warranty under this Agreement by such party;\n\n          (d) by Parent if (i) prior to the purchase of Shares (and associated\nRights) pursuant to the Offer, (A) the Board of Directors of the Company or any\ncommittee thereof shall have withdrawn or modified its approval or\nrecommendation of the Offer, this Agreement, the Merger or any other transaction\ncontemplated by this Agreement; (B) the Board of Directors of the Company or any\ncommittee thereof shall have recommended to the stockholders of the Company,\ntaken no position with respect to, or failed to recommend against acceptance of,\na Third Party Acquisition; (C) the Company shall have entered into any\ndefinitive agreement with respect to a Third Party Acquisition; (D) the Board of\nDirectors of the Company fails to reconfirm its recommendation of the Offer,\nthis Agreement, the Merger and transactions contemplated by this Agreement\nwithin five days of any written request by Parent that the Company's Board of\nDirectors reconfirm its recommendation; or (E) the Board of Directors of the\nCompany or any committee thereof shall have resolved to do any of the foregoing;\nor (ii) the Company shall have breached in any material respect any of its\nrepresentations, warranties, covenants or other agreements contained in this\nAgreement which breach cannot be or has not been cured within 20 days after the\ngiving of written notice to the Company or shall have breached Section 5.3; or\n\n          (e) by the Company if (i) the Board of Directors of the Company shall\nhave withdrawn or modified in a manner adverse to the Purchaser or Parent its\napproval or\n\n                                      -47-\n\n\n \nrecommendation of the Offer, this Agreement or the Merger in order to approve\nthe execution by the Company of a definitive agreement providing for the\ntransactions contemplated by a Superior Proposal, provided that the Company\n                                                  --------                 \nshall have complied with the provisions of Section 5.3, including the notice\nprovisions therein; or (ii) Parent or the Purchaser shall have breached in any\nmaterial respect any of their respective representations, warranties, covenants\nor other agreements contained in this Agreement which breach cannot be or has\nnot been cured within 20 days after the giving of written notice to Parent or\nthe Purchaser, as applicable, except, in any case, for such breaches which are\nnot reasonably likely to affect adversely Parent's or the Purchaser's ability to\ncomplete the Offer or the Merger.\n\n     8.2  Effect of Termination.  If this Agreement is terminated pursuant to \n          ---------------------                                    \nSection 8.1, this Agreement shall become void and of no effect with no\nliability on the part of any party hereto, except for breach of any provision\nof this Agreement, and except that the agreements contained in Sections 5.5,\n6.3, 6.10, 8.3 and in Article IX shall survive the termination hereof.\n\n     8.3  Certain Payments.\n          ----------------   \n\n          (a) In the event that this Agreement is terminated pursuant to Section\n8.1(d)(i) or Section 8.1(e)(i), then, in any such event, the Company shall pay\nParent fifty percent (50%) of the Termination Fee (as defined below) within five\n(5) days after the first of such events shall have occurred.  The Company shall\npay Parent the remaining fifty percent (50%) of the Termination Fee within the\nearlier of (i) nine (9) months following such event, or (ii) five (5) days after\nthe consummation of a Third Party Acquisition or similar alternative transaction\nwith any person other than Parent or any of its affiliates.  For purposes of\nthis Section 8.3, the \"Termination Fee\" shall be a dollar amount equal to (A)\n                       ---------------                                       \nthree percent (3%) of the amount obtained by multiplying the total number of\nFully Diluted Shares outstanding plus the total number of Excluded Shares by\n$7.00, plus (B) an amount equal to Parent's actual and reasonably documented\n       ----                                                                 \nout-of-pocket fees and expenses (not to exceed $200,000) incurred by Parent and\nthe Purchaser in connection with the Offer, the Merger, this Agreement and the\ntransactions contemplated hereby, which amounts shall be payable in immediately\navailable funds.\n\n          (b) In the event that this Agreement is terminated pursuant to Section\n8.1(c) or 8.1(d)(ii), and the Company shall have announced (and subsequently\nconsummates) or shall have consummated a Third Party Acquisition with any person\nother than Parent or any of its affiliates before or within nine (9) months\nafter the date of such termination, the Company shall pay Parent the entire\nTermination Fee within five (5) days after the consummation of the Third Party\nAcquisition.\n\n          (c) In the event that the Company shall fail to pay any amounts owing\npursuant to Section 8.3(a) or 8.3(b) when due, interest shall be paid on such\nunpaid amounts, commencing on the date such amounts became due, at a rate of six\npercent (6%) per annum.  The Company acknowledges that the agreement contained\nin this Section 8.3 is an integral part of the transactions contemplated by this\nAgreement, and that, without these agreements, Parent would not enter into this\nAgreement; accordingly, if the Company fails promptly to pay any amount due\n\n                                      -48-\n\n\n \npursuant to this Section 8.3, and, in order to obtain such payment, Parent\ncommences a suit which results in a judgment against the Company for the amounts\nset forth in this Section 8.3, the Company shall pay to Parent its reasonable\ncosts and expenses (including attorneys' fees and expenses) in connection with\nsuch suit, together with interest on the amounts set forth in this Section 8.3.\n\n          (d)  The Termination Fee shall not be deemed to be liquidated damages,\nand the right to the payment of the Termination Fee shall be in addition to (and\nnot a maximum payment in respect of) any other damages or remedies at law or in\nequity to which Parent or the Purchaser may be entitled as a result of the\nbreach of any term or provision of this Agreement or any Support Agreement.\n\n     8.4  Limitation on Total Profits.  Notwithstanding any provision of this\n          ---------------------------                                        \nAgreement to the contrary, the Total Profit (as hereinafter defined) that Parent\nshall be permitted to realize in respect of the Termination Fee and the Company\nStock Option shall not exceed four percent (4%) of the aggregate purchase price\nthat would have been payable for one hundred percent (100%) of the Company's\nFully Diluted Shares and one hundred percent (100%) of the Excluded Shares at\n$7.00 per share.  In the event Parent's Total Profit would exceed such amount,\nParent shall, at its sole election, (a) reduce the number of Shares subject to\nthe Company Stock Option, (b) deliver Shares received upon an exercise of the\nCompany Stock Option to the Company for cancellation, (c) pay an amount of cash\nto the Company, or (d) do any combination of the foregoing so that Parent's\nactual realized Total Profit shall not exceed four percent (4%) of the aggregate\npurchase price that would have been payable for one hundred percent (100%) of\nthe Company's Fully Diluted Shares and one hundred percent (100%) of the\nExcluded Shares at $7.00 per share.  \"Total Profit\" shall mean the aggregate\n                                      ------------                          \n(before taxes) of (i) any amount received pursuant to the Company's repurchase\nof the Company Stock Option (or any portion thereof), (ii) any amount received\npursuant to the Company's repurchase of the Shares (less the purchase price for\nsuch Shares) subject to the Company Stock Option, (iii) any net cash received\npursuant to the sale of Shares received by Parent in any exercise of the Company\nStock Option to any third party (less the purchase price of such Shares), (iv)\nany amounts received on transfer of the Company Stock Option or any portion\nthereof to a third party, (v) any equivalent amounts received with respect to\nthe Option adjusted pursuant to Section 5.5(e), and (vi) the Termination Fee.\n \n\n                                      -49-\n\n\n \n                                   ARTICLE IX\n\n                               GENERAL PROVISIONS\n\n     9.1  Nonsurvival of Representations, Warranties and Agreements.  All\n          ---------------------------------------------------------        \nrepresentations, warranties and agreements in this Agreement or in any\ninstrument delivered pursuant to this Agreement shall not survive the Merger,\nexcept for the agreements contained in Sections 5.7, 6.6, 6.10 and this Article\nIX of this Agreement, each of which shall survive the Merger.\n\n     9.2  Amendments and Waivers.  Any term of this Agreement may be amended \n          ----------------------                                      \nor waived only with the written consent of the parties.  Any amendment or\nwaiver effected in accordance with this Section 9.2 shall be binding upon the\nparties and their respective successors and assigns.\n\n     9.3  Severability. The provisions of this Agreement shall be deemed\n          ------------                                                    \nseverable and the invalidity or unenforceability of any provision hereof shall\nnot affect the validity or enforceability of any of the other provisions hereof.\nIf any provision of this Agreement, or the application thereof to any person or\nany circumstance, is illegal, invalid or unenforceable, (a) a suitable and\nequitable provision shall be substituted therefor in order to carry out, so far\nas may be valid and enforceable, the intent and purpose of such invalid or\nunenforceable provision and (b) the remainder of this Agreement and the\napplication of such provisions to other persons or circumstances shall not be\naffected by such invalidity or unenforceability, nor shall such invalidity or\nunenforceability affect the validity or enforceability of such provision, and\nthe application thereof, in any other jurisdiction.\n\n     9.4  Interpretation.\n          --------------\n\n          (a) The Article, Section and subsection headings herein are for\nconvenience of reference only, do not constitute a part of this Agreement and\nshall not be deemed to limit or otherwise affect any of the provisions hereof.\nWhere a reference in this Agreement is made to a Section, Schedule, Annex or\nExhibit, such reference shall be to a Section of, or Schedule, Annex or Exhibit\nto, this Agreement, unless otherwise indicated.  Whenever the words \"include,\"\n\"includes\" or \"including\" are used in this Agreement, they shall be deemed to be\nfollowed by the words \"without limitation.\"  All terms defined in this Agreement\nshall have the defined meanings when used in any certificate or other document\nmade or delivered pursuant hereto unless otherwise defined therein.  The\ndefinitions contained in this Agreement are applicable to the singular as well\nas the plural forms of such terms and to the masculine as well as to the\nfeminine and neuter genders of such term.  Any agreement, instrument or statute\ndefined or referred to herein means such agreement, instrument or statute as\nfrom time to time amended, modified or supplemented, including (in the case of\nagreements or instruments) by waiver or consent and (in the case of statutes) by\nsuccession of comparable successor statues and references to all attachments\nthereto and instruments incorporated therein.  References to a person are also\nto its permitted successors and assigns and, in the case of an individual, to\nhis or her heirs and estate, as applicable.\n\n                                      -50-\n\n\n \n          (b) This Agreement has been negotiated at arm's length by and between\npersons sophisticated and knowledgeable in the matters addressed in this\nAgreement.  Each of the parties has been represented by experienced and\nknowledgeable legal counsel.  Accordingly, any rule of law (including California\nCivil Code Section 1564) or legal decision that would require interpretation of\nany ambiguities in this Agreement against the party that has drafted it is not\napplicable and is waived.  The provisions of this Agreement shall be interpreted\nin a reasonable manner to effect the purpose of the parties and this Agreement.\n\n     9.5  Assignment.  Except as set forth in Section 1.1(a), this Agreement \n          ----------                                                \nshall not be assignable by operation of law or otherwise and any attempted\nassignment of this Agreement in violation of this sentence shall be void;\nprovided, however, that this Agreement shall be assignable by any party after \n--------  -------                                                      \nthe Effective Time.\n\n     9.6  Counterparts.  This Agreement may be executed in two or more\n          ------------                                                  \ncounterparts, each of which shall be deemed an original and all of which\ntogether shall constitute one instrument.\n\n     9.7  Notices.  Any notice required or permitted by this Agreement shall be \n          -------                                                       \nin writing and shall be deemed sufficient upon receipt, when delivered\npersonally or by courier, overnight delivery service or confirmed facsimile, or\nforty-eight (48) hours after being deposited in the regular mail as certified\nor registered mail with postage prepaid, if such notice is addressed to the\nparty to be notified at such party's address or facsimile number as set forth\nbelow, or as subsequently modified by written notice in accordance with this\nSection 9.7:\n\n               (a)  If to Parent or the Purchaser:\n\n                    Oracle Corporation\n                    500 Oracle Parkway\n                    Redwood City, CA 94065\n                    Attn:  Daniel S. Cooperman, Senior\n                    Vice President, General Counsel\n                    and Secretary\n\n                    with a copy to:\n\n                    Venture Law Group\n                    A Professional Corporation\n                    2800 Sand Hill Road\n                    Menlo Park, CA 94025\n                    Attn:  Donald M. Keller, Jr.\n\n                                      -51-\n\n\n \n               (b)  If to the Company:\n\n                    Concentra Corporation\n                    21 North Avenue\n                    Burlington, MA 01803\n                    Attn:  Lawrence W. Rosenfeld,\n                    Chairman and Chief Executive Officer\n\n                    with a copy to:\n                    Peabody &amp; Arnold LLP\n                    50 Rowes Wharf\n                    Boston, MA 02110\n                    Attn:  William E. Kelly\n\n     9.8  Entire Agreement.  This Agreement (including the Schedules and\n          ----------------                                                \nExhibits), together with the Confidentiality Agreement, are the product of all\nof the parties hereto, and constitute the entire agreement between such parties\npertaining to the subject matter hereof, and merge all prior negotiations and\ndrafts of the parties with regard to the transactions contemplated herein.  Any\nand all other written or oral agreements existing between the parties hereto\nregarding such transactions are expressly canceled.\n\n     9.9  No Third Party Beneficiaries.  This Agreement is not intended to \n          ----------------------------                                   \nconfer upon any Person other than the parties hereto any rights or remedies\nhereunder, except that the provisions of Section 5.7 are intended for the\nbenefit of the Indemnified Persons, who shall be entitled to enforce the\nprovisions thereof.\n\n     9.10  Governing Law.\n           ------------- \n\n          (a) EXCEPT TO THE EXTENT THAT THE LAW OF THE STATE OF DELAWARE SHALL\nBE MANDATORILY APPLICABLE TO THE MERGER AND THE RIGHTS OF THE STOCKHOLDERS OF\nTHE COMPANY, THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS\nSHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH LAW OF\nTHE STATE OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES\nTHEREOF.\n\n          (b) The parties agree that irreparable damage would occur and that the\nparties would not have any adequate remedy at law in the event that any of the\nprovisions of this Agreement were not performed in accordance with their\nspecific terms or were otherwise breached.  It is accordingly agreed that the\nparties shall be entitled to an injunction or injunctions to prevent breaches of\nthis Agreement and to enforce specifically the terms and provisions of this\nAgreement, this being in addition to any other remedy to which they are entitled\nat law or in equity.\n\n                                      -52-\n\n\n \n     The parties have caused this Agreement and Plan of Merger to be signed by\ntheir respective duly authorized officers, all as of the date first written\nabove.\n\n                    ORACLE CORPORATION\n\n                    By: \/s\/ David J. Roux\n\n                    Name: David J. Roux\n\n                    Title: Executive Vice President, Corporate Development\n\n\n                    KL ACQUISITION CORPORATION\n\n                    By: \/s\/ David J. Roux\n\n                    Name: David J. Roux\n\n                    Title: President, Chief Executive Officer\n\n\n                    CONCENTRA CORPORATION\n\n                    By: \/s\/ Lawrence W. Rosenfeld\n                    \n                    Name: Lawrence W. Rosenfeld\n                    \n                    Title: President, Chief Executive Officer\n\n\n\n\n                              SIGNATURE PAGE TO\n                         AGREEMENT AND PLAN OF MERGER\n\n                                      -53-\n\n\n \n                                   ANNEX I\n                                   -------\n\n                           CONDITIONS OF THE OFFER\n\n     Defined Terms.  Capitalized terms used in this Annex I and not otherwise\ndefined shall have the meanings attributed thereto in the Agreement and Plan of\nMerger, dated as of November 10, 1998 (the \"Merger Agreement\"), by and among\n                                            ----------------                \nParent, the Purchaser and the Company.\n\n     Conditions of the Offer.  Subject to the terms of the Offer and the Merger\nAgreement, the Purchaser shall not be required to accept for payment or pay for\nany Shares (and associated Rights) tendered pursuant to the Offer, and may\nterminate or amend the Offer and may postpone the acceptance for payment of and\npayment for Shares (and associated Rights) tendered, if (i) the Minimum Share\nCondition shall not have been satisfied, or (ii) at least fifteen (15) of the\nemployees listed on Annex I to the Company Disclosure Schedule shall not have\nsigned offer letters to become employees of Parent, or (iii) any applicable\nwaiting period under the HSR Act and under any applicable antitrust laws of any\nforeign country shall not have expired or been terminated prior to the\nexpiration of the Offer, or (iv) the amendment to the agreement described in\nItem 20 of Schedule 4.15(a)(ii) of the Company Disclosure Schedule shall not\nhave been entered into or shall not be in effect, or (v) at any time on or after\nthe date of the Merger Agreement and before the acceptance of such Shares (and\nassociated Rights) for payment or the payment therefor, any of the following\nconditions exists:\n\n          (a) a preliminary or permanent injunction or other order by any\nfederal, state or foreign court which prevents the acceptance for payment of, or\npayment for, some of or all the Shares shall have been issued and shall remain\nin effect;\n\n          (b) there shall have been instituted or be pending any action or\nproceeding by any Governmental Entity (i) challenging the acquisition by the\nPurchaser of Shares or otherwise seeking to restrain, materially delay or\nprohibit the consummation of the Offer or the Merger or seeking damages that\nwould make the Offer, the Merger or any other transaction contemplated by the\nMerger Agreement materially more costly to Parent or the Purchaser, (ii) seeking\nto prohibit or limit materially the ownership or operation by the Purchaser or\nParent of all or a material portion of the business or assets of the Company, or\nto compel the Purchaser or Parent to dispose of or hold separate all or a\nmaterial portion of the business or assets of the Company or the Purchaser or\nParent, as a result of the Offer or the Merger, (iii) seeking to impose or\nconfirm limitations on the ability of Parent or the Purchaser effectively to\nexercise full rights of ownership of the Shares (and associated Rights),\nincluding, without limitation, the right to vote the Shares purchased by it on\nall matters properly presented to the Company's stockholders, including, without\nlimitation, the approval and adoption of the Merger Agreement and the\ntransactions contemplated by the Merger Agreement, (iv) seeking to require\ndivestiture, or separate ownership, by Parent, the Purchaser or any other\naffiliate of Parent of any Shares or any portion of the business or assets of\nParent, Purchaser or the Company or any of their subsidiaries, or (v) which\nreasonably could be expected to result in a Material Adverse Effect;\n\n\n \n          (c) there shall have been any action taken, or any statute, rule,\nregulation or order enacted, promulgated or issued or deemed applicable to the\nOffer, the Merger or any other transaction contemplated by the Merger Agreement,\nby any Governmental Entity or by any third party, except for the waiting period\nprovisions of the HSR Act, which is reasonably likely to result, directly or\nindirectly, in any of the consequences referred to in clauses (i) through (iv)\nof paragraph (b) above;\n\n          (d) any event, change or effect that, individually or in the\naggregate, is or is reasonably likely to constitute a Material Adverse Effect\nshall have occurred following the date of the Merger Agreement;\n\n          (e) the Company shall have breached or failed to perform in any\nmaterial respect any of its obligations, covenants or agreements under the\nMerger Agreement, which breach or failure cannot be or has not been cured prior\nto the earlier of (i) 20 days after the giving of written notice to the Company,\nand (ii) the expiration of the Offer;\n\n          (f) any representation or warranty of the Company in the Merger\nAgreement that is qualified as to materiality shall not be true and correct or\nany such representation or warranty that is not so qualified shall not be true\nand correct in any material respect, in each case when made and at and as of\nsuch time as if made at and as of such time (except that representations and\nwarranties made as of a specified date shall only be true and correct as of such\ndate);\n\n          (g) there shall have occurred (i) any general suspension of, or\nlimitation on prices for, trading in securities on the Nasdaq National Market or\nthe over the counter market; (ii) a declaration of a banking moratorium or any\nsuspension of payments in respect of banks in the United States; (iii) a\ncommencement of a war or armed hostilities or other national or international\ncalamity directly or indirectly involving the United States; (iv) any\nextraordinary material adverse change in the financial markets in the United\nStates; or (v) in the case of any of the foregoing existing on the date hereof,\na material acceleration or worsening thereof;\n\n          (h) (i) it shall have been publicly disclosed or the Purchaser shall\nhave otherwise learned that beneficial ownership (determined for the purposes of\nthis paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of\na majority of the then outstanding Shares have been acquired by any person other\nthan Parent or any of its affiliates, or (ii)(A) the Board of Directors of the\nCompany or any committee thereof shall have withdrawn or modified the approval\nor recommendation of the Offer, the Merger or the Merger Agreement, or approved\nor recommended any Third Party Acquisition or any other acquisition of Shares\nother than the Offer and the Merger, (B) the Company shall have entered into a\ndefinitive agreement with respect to a Third Party Acquisition, (C) the Board of\nDirectors of the Company fails to reconfirm its recommendation of the Offer or\nthe Merger within five (5) days of any written request by Parent or the\nPurchaser for such reconfirmation, or (D) the Board of Directors of the Company\nor any committee thereof shall have resolved to do any of the foregoing; or\n\n          (i) the Merger Agreement shall have been terminated in accordance with\nits terms.\n\n                                     -2-\n\n\n \n          The foregoing conditions (other than the Minimum Share Condition) are\nfor the sole benefit of the Purchaser and Parent.  The foregoing rights of the\nPurchaser shall be available regardless of the circumstances giving rise to any\nsuch conditions (including any action or omission to act of the Purchaser) and,\nsubject to Section 1.1(a) of the Merger Agreement, may be waived by the\nPurchaser or Parent in whole or in part at any time and from time to time in\ntheir sole discretion.\n\n     The failure by the Purchaser or Parent at any time to exercise any of the\nforegoing rights shall not be deemed a waiver of any such right; the waiver of\nany such right with respect to particular facts and other circumstances shall\nnot be deemed a waiver with respect to any other facts and circumstances; and\neach such right shall be deemed an ongoing right which may be asserted at any\ntime and from time to time.\n\n                                     -3-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7173,8419],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9626],"class_list":["post-43102","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-concentra-corp","corporate_contracts_companies-oracle-corp","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43102"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43102"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43102"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}