WORLDTALK COMMUNICATIONS CORP
8-K, 1999-11-30
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                             Current Report pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


       Date of report (Date of earliest event reported) November 18, 1999


                      WORLDTALK COMMUNICATIONS CORPORATION
             (Exact name of registrant as specified in its charter)


                                    Delaware
                 (State or other jurisdiction of incorporation)


              000-27886                                       77-0303581
       (Commission file number)                           (I.R.S. Employer
                                                          Identification No.)


       5155 Old Ironsides Drive, Santa Clara, California        95054
            (Address of principal executive offices)           (Zip code)


                                 (408) 567-1500
              (Registrant's telephone number, including area code)


                                      -1-

<PAGE>


Item 2: Acquisition or Disposition of Assets.

         (a) On November  18,  1999,  Worldtalk  Communications  Corporation,  a
Delaware corporation ("Worldtalk"),  Tumbleweed Communications Corp., a Delaware
corporation ("Tumbleweed") and Keyhole Acquisition Corp., a Delaware corporation
and a  wholly-owned  subsidiary of Tumbleweed  ("Merger  Sub"),  entered into an
Agreement and Plan of Merger (the "Merger Agreement").  Subject to the terms and
conditions  of the Merger  Agreement,  Merger  Sub will be merged  with and into
Worldtalk (the  "Merger"),  with  Worldtalk  surviving the Merger and becoming a
wholly-owned subsidiary of Tumbleweed.

         At the  effective  time  of  the  Merger,  each  outstanding  share  of
Worldtalk's  Common Stock will be exchanged for 0.26 shares of Tumbleweed Common
Stock.  In  addition,  Tumbleweed  will assume  outstanding  options to purchase
Worldtalk  Common  Stock on the terms  provided  in the  Merger  Agreement.  The
transaction is intended to qualify as a tax-free  reorganization and is intended
to be accounted for as a pooling of interests.  The Merger is subject to various
conditions,  including  the approval of the Merger by  Worldtalk's  stockholders
and, if  required,  approval of the issuance of  Tumbleweed  common stock in the
Merger by Tumbleweed's stockholders.

         In connection with the execution of the Merger Agreement, Worldtalk and
Tumbleweed  entered  into a Stock  Option  Agreement  dated  November  18, 1999,
between  Worldtalk and Tumbleweed  (the "Option  Agreement"),  pursuant to which
Worldtalk  granted to  Tumbleweed  an option to purchase the number of shares of
Common  Stock equal to nineteen  and  nine-tenths  percent  (19.9%) of the total
number of shares of Worldtalk Common Stock issued and outstanding as of the date
of the Merger Agreement,  which option is exercisable upon the occurrence of the
events  specified  in the Option  Agreement.  Pursuant to the Option  Agreement,
Tumbleweed has the right,  upon the occurrence of such events,  to purchase such
shares of  Worldtalk  Common  Stock for  $10.527  per share,  subject to certain
customary anti-dilution adjustments. Notwithstanding any other provisions of the
Option  Agreement,  the Total Profit (as defined in the Option  Agreement)  that
Tumbleweed  may realize  from the option,  and pursuant to the  termination  fee
under the Merger Agreement,  may not exceed an amount equal to $6,000,000.  Upon
the occurrence of certain events specified in the Option  Agreement,  Tumbleweed
may  require  Worldtalk  to  repurchase  the  option.  In  addition,  the Option
Agreement grants certain  registration  rights to Tumbleweed with respect to any
shares of Worldtalk Common Stock acquired pursuant to the option.

         In connection with the execution of the Merger Agreement Tumbleweed and
certain  stockholders of Worldtalk  holding 6,630,165 shares of Worldtalk Common
Stock,  representing  approximately  46% of the outstanding  shares of Worldtalk
Common Stock, have entered into voting

                                      -2-

<PAGE>


agreements,  substantially  in the form  attached  to this  Form 8-K as  Exhibit
2.1(A)  (the  "Worldtalk   Stockholders   Agreement").   Worldtalk  and  certain
stockholders of Tumbleweed holding 11,754,426 shares of Tumbleweed Common Stock,
representing  approximately 54% of the currently  outstanding  Tumbleweed Common
Stock, have entered into voting  agreements,  substantially in the form attached
to this Form 8-K as Exhibit 2.1(D) (the  "Tumbleweed  Stockholders  Agreement").
Under each of these voting agreements,  these stockholders  agreed to vote their
shares in favor of approval of the Merger and related  matters.  The  Tumbleweed
Stockholders  Agreement  and  the  Worldtalk  Stockholders  Agreement  are  both
incorporated herein by reference.

         The foregoing  descriptions  are qualified in its entirety by reference
to the full text of the Merger Agreement the Worldtalk Stockholder Agreement and
the Tumbleweed Stockholder Agreement,  including the exhibits thereto, which are
filed herewith as exhibits and incorporated by reference herein.


Item 7: Financial Statements and Exhibits.

         (c)  Exhibits

         2.1      Agreement and Plan of Merger and  Reorganization,  dated as of
                  November  18,  1999  by  and  among  Worldtalk  Communications
                  Corporation,   Tumbleweed  Communications  Corp.  and  Keyhole
                  Acquisition  Corp., a  wholly-owned  subsidiary of Tumbleweed,
                  together with the following exhibits thereto

                  (A)      Form of Voting  Agreement,  by and among  Tumbleweed,
                           Merger Sub and certain stockholders of Worldtalk.

                  (B)      Form of Noncompetition and Employment Agreement.

                  (C)      Form of Stock Option Agreement,  dated as of November
                           18,   1999,    between    Worldtalk    Communications
                           Corporation and Tumbleweed Communications Corp.

                  (D)      Form of Voting Agreement,  by and among Worldtalk and
                           certain stockholders of Tumbleweed.

                  (F)      Form  of   Employee   Proprietary   Information   and
                           Inventions Agreement.

                  (G)      Form of Affiliate Agreement


         99.1     Press Release of Registrant, dated November 18, 1999

                                      -3-

<PAGE>


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated:  November 30, 1999


                                      WORLDTALK COMMUNICATIONS CORPORATION


                                      By:  /s/ James Heisch
                                           -------------------------------------
                                           James Heisch
                                           President and Chief Financial Officer


                                      -4-




                                                                     EXHIBIT 2.1

                                    AGREEMENT

                                       and

                                 PLAN OF MERGER

                                  by and among

                        TUMBLEWEED COMMUNICATIONS CORP.,

                            KEYHOLE ACQUISITION CORP.

                                       and

                      WORLDTALK COMMUNICATIONS CORPORATION


                          AGREEMENT AND PLAN OF MERGER


         AGREEMENT AND PLAN OF MERGER (this  "Agreement"),  dated as of November
18, 1999, by and among Tumbleweed  Communications  Corp., a Delaware corporation
("Parent"),  Keyhole  Acquisition  Corp.,  a Delaware  corporation  and a direct
wholly  owned  subsidiary  of  Parent  ("Sub"),  and  Worldtalk   Communications
Corporation, a Delaware corporation (the "Company").


                                   WITNESSETH:

         WHEREAS,  the Boards of Directors of Parent and Sub have approved,  and
deem it advisable and in the best interests of their respective  stockholders to
consummate, a strategic business combination between the Company and Parent upon
the terms and subject to the conditions set forth herein;

         WHEREAS, the Board of Directors of the Company,  having determined that
such  combination is desirable,  has approved the  transactions  contemplated by
this Agreement and the Ancillary Agreements (as defined below);

                                       1

<PAGE>


         WHEREAS,   as  a  condition  and   inducement  to  Parent's  and  Sub's
willingness  to enter into this  Agreement and incur the  obligations  set forth
herein,  concurrently  with the  execution and delivery of this  Agreement,  (i)
Parent and certain  stockholders of the Company  identified in Schedule A hereto
have  entered  into a Voting  Agreement  in the form of  Exhibit  A hereto  (the
"Company Stockholders Agreements"),  pursuant to which, among other things, such
stockholders  agree to vote in favor of approval and adoption of this Agreement;
(ii) the Company and certain key employees of the Company identified in Schedule
B hereto have  entered into  non-competition  agreements  (the  "Non-Competition
Agreements") in the form of Exhibit B-1 hereto,  and employment  agreements (the
"Employment Agreements") in the form of Exhibit B-2 hereto, the effectiveness of
which are conditioned  upon the  consummation of the  transactions  contemplated
hereby;  and (iii) Parent and the Company have entered into an Option  Agreement
in the form of Exhibit C hereto  (the  "Option  Agreement"),  pursuant to which,
among other  things,  the Company  grants to Parent an option to purchase  newly
issued  shares  of  Company  Common  Stock   representing  19.9%  of  the  total
outstanding shares of Company Common Stock;

         WHEREAS, as a condition and inducement to the Company's  willingness to
enter  into  this  Agreement  and  incur  the   obligations  set  forth  herein,
concurrently with the execution and delivery of this Agreement,  (i) the Company
and certain  stockholders of Parent identified in Schedule D hereto have entered
into  a  Voting  Agreement  in  the  form  of  Exhibit  D  hereto  (the  "Parent
Stockholders   Agreements"),   pursuant  to  which,  among  other  things,  such
stockholders  agree to vote in favor of approval and adoption of this  Agreement
(the Company Stockholders Agreements,  the Parent Stockholders  Agreements,  the
Non-Competition  Agreements,  the Employment Agreements and the Option Agreement
are collectively referred to herein as the "Ancillary Agreements");

         WHEREAS, for United States federal income tax purposes,  it is intended
that  the  Merger  (as  defined  in  Section  1.1  hereof)  shall  qualify  as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended, and the rules and regulations  promulgated  thereunder (the
"Code"),  and this  Agreement  is  intended  to be and is  adopted  as a plan of
reorganization within the meaning of Section 368 of the Code; and

         WHEREAS, for accounting purposes,  it is intended that the Merger shall
be  accounted  for as a "pooling of  interests"  in  conformity  with  generally
accepted  accounting  principles,  as described in Accounting  Principles  Board
Opinion No. 16 and the applicable rules and regulations of the SEC.

         NOW,  THEREFORE,  in  consideration of the foregoing and the respective
representations,  warranties,  covenants  and  agreements,  and  other  good and
valuable  consideration,  set forth herein and in the Ancillary Agreements,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:


                                    ARTICLE I

                                     MERGER

         Section 1.1 The  Merger.  Subject to the terms and  conditions  of this
Agreement, at the Effective Time (as defined in Section 1.2 hereof), the Company
and Sub shall consummate a merger (the "Merger") pursuant to which (a) Sub shall
be merged with and into the Company and the separate corporate  existence of Sub
shall  thereupon  cease,  (b) the Company  shall be the  successor  or surviving
corporation (the "Surviving Corporation") in the Merger and shall continue to be
governed by the laws of the State of  Delaware  and (c) the  separate  corporate
existence of the Company, with all its rights,  privileges,  immunities,  powers
and franchises, shall continue unaffected by the Merger.

                                       2

<PAGE>


         Pursuant to the Merger, (a) the Certificate of Incorporation of Sub, as
in effect  immediately  prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving  Corporation until thereafter amended as provided
by law and such Certificate of Incorporation,  and (b) the By-laws of Sub, as in
effect  immediately  prior to the  Effective  Time,  shall be the By-laws of the
Surviving  Corporation  until  thereafter  amended  as  provided  by  law,  such
Certificate of Incorporation and such By-laws. The Merger shall have the effects
set forth in the Delaware General Corporation Law (the "DGCL").

         Section 1.2 Effective  Time.  Parent,  Sub and the Company will cause a
certificate  of merger  (the  "Certificate  of Merger") in the form of Exhibit E
hereto,  to be filed on the Closing  Date (as defined in Section 1.3 hereof) (or
on such other date as Parent and the Company may agree)  with the  Secretary  of
State of the State of  Delaware  (the  "Secretary  of State") as provided in the
DGCL. The Merger shall become  effective on the date on which the Certificate of
Merger pursuant to Section 251 of the DGCL and any other documents  necessary to
effect the Merger in accordance  with the DGCL are duly filed with the Secretary
of State (the "Merger Filing") or such time as is agreed upon by the parties and
specified in the Certificate of Merger, and such time is hereinafter referred to
as the "Effective Time."

         Section 1.3  Closing.  The closing of the Merger (the  "Closing")  will
take place at 8:00 a.m., Pacific Standard Time, on a date to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of all of the  conditions set forth in Article VI hereof (the "Closing
Date"),  at the  offices  of  Skadden,  Arps,  Slate,  Meagher & Flom  LLP,  525
University Avenue,  Palo Alto,  California 94301, or such other date or place as
agreed to in writing by the parties hereto.

         Section 1.4 Directors and Officers of the  Surviving  Corporation.  The
directors  and officers of the Sub at the Effective  Time shall,  from and after
the  Effective  Time,  be  the  directors  and  officers,  respectively,  of the
Surviving  Corporation  until their  successors  shall have been duly elected or
appointed or qualified or until their earlier  death,  resignation or removal in
accordance with the Surviving  Corporation's  Certificate of  Incorporation  and
By-laws.


                                   ARTICLE II

                              CONVERSION OF SHARES

         Section 2.1 Conversion of Shares.

                  (a) Each  share of  common  stock,  par  value  $.01 per share
("Company  Common  Stock"),  of the Company issued and  outstanding  immediately
prior to the  Effective  Time (other than any Shares to be canceled  pursuant to
Section 2.1(c) hereof) shall,  by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive 0.26 (the
"Exchange  Ratio")  of  a  fully  paid  and  nonassessable  share  (the  "Merger
Consideration")  of common  stock,  par value  $.001 per share,  of Parent  (the
"Parent Common Stock").

                  (b) Each share of common stock,  par value $.001 per share, of
Sub issued and  outstanding  immediately  prior to the Effective Time shall,  by
virtue of the Merger and without any action on the part of Parent,  be converted
into one fully paid and nonassessable share of common stock, par value $.001 per
share, of the Surviving Corporation.

                  (c) Any  shares  of  Company  Common  Stock  that are owned by
Parent,  Sub or any other wholly owned Subsidiary (as defined in Section 3.1) of
Parent

                                       3

<PAGE>


shall be canceled  and  retired  and shall  cease to exist and no Parent  Common
Stock or other consideration shall be delivered in exchange therefor.

                  (d) On and after the Effective  Time,  holders of certificates
(the "Certificates"),  which immediately prior to the Effective Time represented
outstanding  shares of Company  Common Stock,  shall cease to have any rights as
stockholders of the Company, except the right to receive, subject to Section 2.5
hereof,  the Merger  Consideration  (and cash in lieu of any fractional share as
contemplated  by Section  2.3) for each share of  Company  Common  Stock held by
them.

         Section  2.2  Surrender  of  Certificates.  At or  promptly  after  the
Effective  Time,  Parent  shall make  available  to  Equiserve  L.P.,  or a bank
reasonably  acceptable to the Company (the "Exchange  Agent"),  in trust for the
benefit  of the  holders  of shares of  Company  Common  Stock for  exchange  in
accordance with this Article II, (i) cash in an amount sufficient to pay cash in
lieu of  fractional  shares  pursuant  to  Section  2.3,  and (ii)  certificates
representing  the  aggregate  number of shares of Parent  Common Stock  issuable
pursuant to Section 2.1 hereof.  Promptly after the Effective Time, the Exchange
Agent shall mail to each holder of record of a  Certificate  or  Certificates  a
letter of transmittal (which shall specify that delivery shall be effected,  and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and instructions for use in effecting
the  surrender of the  Certificates  in exchange for  certificates  representing
Parent Common Stock and cash in lieu of fractional  shares, if applicable.  Upon
surrender of a Certificate or Certificates to the Exchange Agent,  together with
such letter of transmittal,  duly executed, the holder of such Certificate shall
be entitled to receive in exchange  therefor the Merger  Consideration  for each
share of Company  Common  Stock  formerly  represented  by such  Certificate  or
Certificates, and the Certificate(s) so surrendered shall forthwith be canceled.
Until  surrendered  as  contemplated  by this  Article  II,  from and  after the
Effective Time each  Certificate  shall be deemed to represent only the right to
receive the Merger  Consideration  (and cash in lieu of any fractional  share as
contemplated  by Section 2.3) for each share of Company  Common  Stock  formerly
represented by such Certificate,  and shall not evidence any interest in, or any
right to exercise  the rights of a  stockholder  of,  Parent.  If a  certificate
representing  Parent  Common  Stock is to be issued or a cash payment in lieu of
fractional share interests is to be made to a person other than the one in whose
name the Certificate surrendered in exchange therefor is registered, it shall be
a  condition  to such  issuance  or payment  that such  Certificate  be properly
endorsed  (or  accompanied  by  an  appropriate   instrument  of  transfer)  and
accompanied by evidence that any applicable  stock transfer taxes have been paid
or provided for.

         Section 2.3 No  Fractional  Shares.  (a) No  certificates  representing
fractional  shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates,  and such fractional share interests shall not entitle
the owner thereof to vote or to any other rights of a stockholder of Parent.  In
lieu of such  fractional  shares,  any holder of Company  Common Stock who would
otherwise be entitled to receive a fraction of a share of Parent  Common Stock (
after  aggregating  all shares of Parent  Common Stock  issuable to such holder)
shall, upon surrender of such holder's  Certificate or Certificates,  be paid in
cash the dollar amount  (rounded to the nearest whole cent),  without  interest,
determined  by  multiplying  such  fraction by the  closing  price of a share of
Parent  Common  Stock on  Nasdaq  Stock  Market  on the date the  Merger  became
effective.

                  (b) As promptly as practicable  following the Effective  Time,
the Exchange Agent shall deliver the Merger  Consideration,  whether in the form
of Parent  Common Stock or cash in lieu of  fractional  shares,  or both to each
holder of a Certificate or Certificates which have been surrendered.

                                       4

<PAGE>


         Section 2.4 No Dividends.  No dividends or other distributions declared
or made after the  Effective  Time with respect to shares of Parent Common Stock
with a record date after the  Effective  Time shall be paid to the holder of any
unsurrendered  Certificate  with respect to the Parent Common Stock  represented
thereby until the holder of such Certificate  shall surrender such  Certificate.
Dividends or other  distributions  with a record date after the  Effective  Time
payable in respect of shares of Parent  Common Stock held by the Exchange  Agent
shall  be held in  trust  for the  benefit  of  such  holders  of  unsurrendered
Certificates.  Following surrender of any previously unsurrendered  Certificate,
there shall be paid to the holder of the certificates  representing whole shares
of Parent Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender,  the amount of any dividends or other distributions with
a record date after the  Effective  Time  theretofore  paid with respect to such
whole  shares of Parent  Common  Stock  and (ii) at the date of  payment  of any
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date  subsequent  to  surrender,  the amount of
such dividends or other distributions  payable with respect to such whole shares
of Parent Common Stock.

         Section 2.5 Return to Parent.  Any shares of Parent  Common  Stock made
available  to the  Exchange  Agent  and any  portion  of the  Shares  Trust  not
exchanged for  Certificates  within six months after the Effective  Time and any
dividends and  distributions  held by the Exchange Agent for payment or delivery
to the holders of unsurrendered  Certificates  formerly  representing  shares of
Company  Common Stock and unclaimed at the end of such six month period shall be
redelivered  or repaid by the  Exchange  Agent to Parent,  after  which time any
holder of  Certificates  who has not theretofore  delivered or surrendered  such
Certificates to the Exchange  Agent,  subject to applicable law, shall look as a
general creditor only to Parent for payment of the Merger Consideration, cash in
lieu of fractional share interests, and any such dividends or distributions with
respect to its shares of Parent Common  Stock.  Notwithstanding  the  foregoing,
none of Parent, the Exchange Agent, the Surviving Corporation or any other party
shall be liable to any holder of a Certificate  formerly  representing shares of
Company  Common Stock for any Merger  Consideration,  cash in lieu of fractional
share  interests or dividends or  distributions  properly  delivered to a public
official  pursuant  to  applicable   property,   escheat  or  similar  laws.  If
Certificates  are not  surrendered  prior to two years after the Effective Time,
unclaimed  Merger  Consideration  (or funds with respect to  fractional  shares)
payable with respect to such shares of Company Common Stock shall, to the extent
permitted by applicable law,  become the property of the Surviving  Corporation,
free and clear of all  claims or  interest  of any  person  previously  entitled
thereto.

         Section 2.6 Company  Option Plans.  At the Effective  Time, all options
(the "Company Options") then outstanding, whether or not vested and exercisable,
under the Company's 1992 Stock Option Plan,  1996 Equity  Incentive  Plan,  1996
Directors  Stock Option Plan and 1996 Employee Stock Purchase Plan, in each case
as amended  (collectively,  the  "Company  Option  Plans"),  shall be assumed by
Parent.  Each Company Option assumed by Parent other than Company Options issued
pursuant to the Company 1996 Employee  Stock  Purchase Plan shall be subject to,
and  exercisable  upon,  the same terms and  conditions as under the  applicable
Company  Option Plan and the  applicable  option  agreement  issued  thereunder,
except that (a) each  assumed  Company  Option  shall be  exercisable  for,  and
represent  the right to acquire,  that number of shares of Parent  Common  Stock
(rounded  down to the nearest  whole share) equal to (i) the number of shares of
Company  Common Stock subject to such Company  Option  immediately  prior to the
Effective Time multiplied by (ii) the Exchange  Ratio;  and (b) the option price
per share of Parent Common Stock subject to each assumed Company Option shall be
an  amount  equal to (i) the  option  price per share of  Company  Common  Stock
subject to such Company Option in effect immediately prior to the Effective Time
divided by (ii) the Exchange Ratio (rounded up to the

                                       5

<PAGE>


nearest  whole  cent).  The Company  represents  and  warrants  that each of the
foregoing  actions may be taken and effected by the Company  without the consent
of any holder of Company Options.  Each assumed purchase right under the Company
1996 Employee Stock Purchase Plan shall continue to have, and be subject to, the
terms and  conditions set forth in the Company 1996 Employee Stock Purchase Plan
and the documents governing the assumed purchase right, except that the purchase
price of such shares of Parent  Common Stock for each  respective  purchase date
under  each  assumed  purchase  right  shall be the  lower  of (i) the  quotient
determined  by dividing  eighty-five  percent  (85%) of the fair market value of
Company Common Stock on the offering date of each assumed offering period by the
Exchange Ratio or (ii) eighty-five percent (85%) of the fair market value of the
Parent  Common  Stock on each  purchase  date of each  assumed  offering  period
occurring  after the  Effective  Time (with the number of shares  rounded to the
nearest  whole share and the purchase  price rounded to the nearest whole cent).
The assumed  purchase  rights  shall be exercised  at such times  following  the
Effective Time as set forth in the Company 1996 Employee Stock Purchase Plan and
each participant shall, accordingly,  be issued shares of Parent Common Stock at
such times  pursuant to the Company  1996  Employee  Stock  Purchase  Plan.  The
Company 1996 Employee Stock  Purchase Plan shall  terminate with the exercise of
the last assumed  purchase  right,  and no additional  purchase  rights shall be
granted under the Company  Employee  Stock Purchase Plan following the Effective
Time.  Parent  agrees that from and after the Effective  Time,  employees of the
Surviving  Corporation may participate in Parent's employee stock purchase plan,
subject to the terms and conditions of such plan.

         The adjustment  provided  herein with respect to stock options shall be
and is  intended to be effected in a manner  which is  consistent  with  Section
424(a) of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code").  The
duration,  vesting  schedule,  exercisability  and  other  terms of each  option
immediately  after the  Effective  Time  shall be the same as the  corresponding
terms  in  effect  immediately  before  the  Effective  Time,  except  that  all
references  to  Company  in the  Company  Option  Plans  (and the  corresponding
references in the option  agreement  documenting such option) shall be deemed to
be references to Parent. Except as set forth in Section 3.2(d) of the Disclosure
Schedule (as defined in Article III hereof),  vesting of Company  Options  shall
not be accelerated  as a result of the Merger.  Continuous  employment  with the
Company or its  Subsidiaries  shall be credited to the  optionee for purposes of
determining the vesting of all assumed Company Options after the Effective Time.
As soon as reasonably practicable,  but in no event later than 30 days after the
Effective  Time,  Parent will issue to each holder of an assumed  Company Option
notice of the foregoing assumption by Parent.

Parent  shall  file with the SEC,  no later  than ten  business  days  after the
Effective  Time, a Registration  Statement on Form S-8 relating to the shares of
Parent  Common Stock  issuable  with respect to the Company  Options  assumed by
Parent in accordance with this Section 2.6.

         Section 2.7 Company  Warrants.  At the Effective  Time, all warrants to
purchase Company Common Stock (the "Company Warrants") then outstanding, whether
or not exercisable,  shall be assumed by Parent. Each Company Warrant assumed by
Parent shall be subject to, and exercisable  upon, the same terms and conditions
as under the applicable  warrant  agreement issued  thereunder,  except that (a)
each assumed Company  Warrant shall be exercisable  for, and represent the right
to acquire,  that number of shares of Parent  Common Stock  (rounded down to the
nearest  whole share) equal to (i) the number of shares of Company  Common Stock
subject  to  such  Company  Warrant  immediately  prior  to the  Effective  Time
multiplied by (ii) the Exchange  Ratio;  and (b) the exercise price per share of
Parent Common Stock subject to each assumed  Company  Warrant shall be an amount
equal to (i) the price per share of Company Common Stock subject to such Company
Warrant in effect  immediately  prior to the Effective  Time divided by (ii) the
Exchange

                                       6

<PAGE>


Ratio  (rounded up to the  nearest  whole  cent).  The  Company  represents  and
warrants  that each of the  foregoing  actions may be taken and  effected by the
Company  without the consent of any holder of Company  Warrants,  except for the
warrant held by Comdisco,  Inc. to purchase  2,250 shares of the Company  Common
Stock at an exercise price of $18.10 per share  pursuant to a Warrant  Agreement
dated as of July 30, 1993.

         Section 2.8 Stock  Transfer  Books.  At the Effective  Time,  the stock
transfer  books of the  Company  shall be closed  and no  transfer  of shares of
Company  Common Stock shall  thereafter be made.  If, after the Effective  Time,
certificates  formerly representing shares of Company Common Stock are presented
to the  Surviving  Corporation,  they shall be canceled and  exchanged  for cash
and/or  certificates  representing  Parent Common Stock pursuant to this Article
II.


                                   ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF COMPANY

         Except as set forth in the disclosure  schedule  prepared and signed by
the Company and delivered to Parent  simultaneously  with the  execution  hereof
(the "Disclosure  Schedule"),  the Company represents and warrants to Parent and
Sub all of the  statements  contained in this Article III.  Each  exception  set
forth in the  Disclosure  Schedule and each other response to this Agreement set
forth in the  Disclosure  Schedule is  identified  by reference  to, or has been
grouped  under a heading  referring  to, a specific  individual  section of this
Agreement  and  relates  only to such  section,  except to the  extent  that one
portion  of the  Disclosure  Schedule  specifically  refers to  another  portion
thereof, identifying such other portion by section reference or similar specific
cross reference.

         Section 3.1 Organization. Each of the Company and its Subsidiaries is a
corporation or other entity duly organized,  validly existing, duly qualified or
licensed to do business and in good standing under the laws of the  jurisdiction
of its  incorporation  or  organization  and in each  jurisdiction  in which the
nature of the  business  conducted by it makes such  qualification  or licensing
necessary,  and has all requisite corporate or other power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted,  except where the failure to be so
organized,  existing and in good standing or to have such power, authority,  and
governmental  approvals would not have a material  adverse effect on the Company
and its Subsidiaries.  As used in this Agreement,  the word "Subsidiary"  means,
with  respect to any  party,  any  corporation  or other  organization,  whether
incorporated or unincorporated,  of which (i) such party or any other Subsidiary
of such party is a general partner (excluding such partnerships where such party
or any Subsidiary of such party do not have a majority of the voting interest in
such  partnership)  or (ii) at  least a  majority  of the  securities  or  other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others  performing  similar functions with respect to such
corporation or other  organization is directly or indirectly owned or controlled
by such  party or by any one or more of its  Subsidiaries,  or by such party and
one or more of its Subsidiaries. As used in this Agreement, any reference to any
event, change or effect having a "material adverse effect" on or with respect to
any entity (or group of entities  taken as a whole) means such event,  change or
effect,  individually  or in the aggregate with such other events,  changes,  or
effects,  which is materially  adverse to the financial  condition,  businesses,
results of  operations,  assets,  liabilities,  properties  or prospects of such
entity (or, if used with respect  thereto,  of such group of entities taken as a
whole), it being understood that none of the following shall be deemed by itself
or by  themselves,  either  alone or in  combination,  to  constitute a material
adverse  effect:  (i) a change in the market price or trading  volume of Company
Common Stock or Parent Common

                                       7

<PAGE>


Stock, as the case may be, (ii) changes  attributable  to financial  results for
the quarter ended December 31, 1999, (iii)  conditions  affecting the economy of
the United States of America as a whole, (iv) conditions affecting generally the
industry in which Parent or the Company, as applicable, operates, or (v) changes
after  the date  hereof  in laws or  regulations  applicable  to  Parent  or the
Company, as the case may be. Section 3.1 of the Disclosure Schedule,  sets forth
a complete list of the names,  jurisdiction of  incorporation or other formation
and  capitalization of each of the Company's  Subsidiaries and the jurisdictions
in which the Company and each of its Subsidiaries are qualified to do business.

         Section 3.2 Capitalization.

                  (a) The  authorized  capital stock of the Company  consists of
25,000,000  shares of Company  Common  Stock and  6,500,000  shares of preferred
stock, par value $.01 per share (the "Company Preferred Stock").  As of the date
hereof,   (i)  14,519,246  shares  of  Company  Common  Stock  were  issued  and
outstanding,  (ii)  no  shares  of  Company  Preferred  Stock  were  issued  and
outstanding,  (iii)  2,627,068  shares of Company Common Stock were reserved for
issuance  upon the  exercise  of  outstanding  Company  Options  pursuant to the
Company  Option  Plans and (iv)  1,693,916  shares of Company  Common Stock were
reserved for issuance upon the exercise of outstanding Company Warrants.  All of
the issued and  outstanding  shares of Company Common Stock are validly  issued,
fully paid and nonassessable, were issued in compliance with applicable law, and
are not subject to any preemptive or similar rights.

                  (b)  Except as set forth in Section  3.2(b) of the  Disclosure
Schedule and other than pursuant to the Option Agreement, there are not now, and
at  the  Effective  Time  there  will  not  be,  any  (i)   outstanding   right,
subscription,  warrant,  call,  option or other  agreement or arrangement of any
kind  (collectively,  "Rights")  to purchase or  otherwise  to receive  from the
Company  or any of its  Subsidiaries  any  of  the  outstanding  authorized  but
unissued or treasury  shares of the capital  stock or any other  security of the
Company  or any of its  Subsidiaries,  (ii)  outstanding  security  of any  kind
convertible into or exchangeable for such capital stock or (iii) voting trust or
other agreement or understanding to which the Company or any of its Subsidiaries
is a party or is bound with  respect to the voting of the  capital  stock of the
Company or any of its Subsidiaries.

                  (c) Each outstanding share of capital stock of each Subsidiary
of the Company is duly authorized,  validly issued, fully paid and nonassessable
and each such share  owned by the  Company or any  Subsidiary  of the Company is
owned free and clear of any mortgage,  pledge,  assessment,  security  interest,
lease,  sublease,  lien, adverse claim, levy, charge, option, right of others or
restriction  (whether on voting,  sale,  transfer,  disposition or otherwise) or
other encumbrance of any kind, whether imposed by agreement,  understanding, law
or equity, or any conditional sale contract,  title retention  contract or other
contract to give or to refrain from giving any of the  foregoing  (collectively,
"Liens").

                  (d) Section  3.2(d) of the  Disclosure  Schedule  sets forth a
listing of (i) all  outstanding  Company  Options as of the date  hereof,  which
schedule  shows the portion of each Company  Option  which is then  vested,  the
vesting and acceleration  provisions  thereof,  if any, the date upon which each
Company  Option  expires and whether or not such  Company  Option is intended to
qualify as an "incentive  stock option" within the meaning of Section 422 of the
Code;  (ii)  all  outstanding  Company  Warrants  as of the date  hereof,  which
schedule shows the portion of each Company  Warrant which is exercisable and the
date upon which each Company Warrant expires; and (iii) each outstanding Company
Option and Company Warrant that will accelerate,  in whole or in part,  pursuant
to its terms as a result of the transactions contemplated hereby, which schedule
summarizes the terms of acceleration

                                       8

<PAGE>


pursuant to such Company Option, Company Warrant or Company Option Plan.

         Section 3.3 Corporate  Authorization;  Validity of  Agreement;  Company
Action.  (a) The Company has full  corporate  power and authority to execute and
deliver this Agreement and the Ancillary  Agreements to which it is a party and,
subject to obtaining  approval and adoption of this Agreement by the affirmative
vote of the holders of a majority of the  outstanding  shares of Company  Common
Stock (the  "Company  Stockholder  Approval"),  to consummate  the  transactions
contemplated hereby and thereby. The execution,  delivery and performance by the
Company of this Agreement and the Ancillary Agreements to which the Company is a
party, and the consummation by it of the  transactions  contemplated  hereby and
thereby, have been duly and validly authorized by all necessary corporate action
on the part of the Company and,  except for  obtaining  the Company  Stockholder
Approval,  no other corporate  action on the part of the Company is necessary to
authorize the  execution  and delivery by the Company of this  Agreement and the
Ancillary  Agreements  to  which  it is a  party  and  the  consummation  of the
transactions  contemplated  hereby and thereby.  Each of this  Agreement and the
Ancillary  Agreements  to  which  it is a party  have  been  duly  executed  and
delivered by the Company and, if  applicable,  the  Company's  stockholders  and
affiliates  and,  assuming each of this Agreement and such Ancillary  Agreements
constitutes  a valid and  binding  obligation  of the other  parties  hereto and
thereto,  constitutes  a valid and  binding  obligation  of the Company and such
stockholders   and   affiliates   enforceable   against  the  Company  and  such
stockholders  and affiliates in accordance with their respective  terms,  except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency or
other  similar laws,  now or hereafter in effect,  affecting  creditors'  rights
generally,  and (ii) the remedy of specific performance and injunctive and other
forms of  equitable  relief  may be  subject to  equitable  defenses  and to the
discretion of the court before which any proceeding therefor may be brought.

                  (b) The  Board  of  Directors  of the  Company  (the  "Company
Board") has duly and validly approved and taken all corporate action required to
be  taken  by such  Company  Board  for  the  consummation  of the  transactions
contemplated  by this  Agreement and the Ancillary  Agreements,  and resolved to
recommend that the stockholders of the Company approve and adopt this Agreement.
The Company Stockholder Approval is the only vote of the holders of any class or
series of Company  capital  stock  necessary  to approve this  Agreement  and to
consummate the Merger.  The Company has taken all actions necessary with respect
to the entering into of this Agreement and the Ancillary  Agreements to which it
is  a  party,  the  consummation  of  the  Merger  and  the  other  transactions
contemplated  by this  Agreement  and the  Ancillary  Agreements so as to render
inapplicable to such  transactions  the  restrictions  on business  combinations
contained in Section 203 of the DGCL.

         Section 3.4 Consents and Approvals; No Violations.  Except as disclosed
in Section 3.4 of the Disclosure Schedule and except for the Company Stockholder
Approval, the Merger Filing, and filings, permits, authorizations,  consents and
approvals as may be required under,  and other  applicable  requirements of, the
Hart-Scott-Rodino  Antitrust  Improvements  Act of 1976,  as  amended  (the "HSR
Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Securities Act and state blue sky laws,  neither the execution,  delivery or
performance of this Agreement or any Ancillary Agreements by the Company nor the
consummation by the Company of the transactions  contemplated  hereby or thereby
nor compliance by the Company with any of the provisions  hereof or thereof will
(i) conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws or similar  organizational  documents of the Company or
of  any  of  its  Subsidiaries,   (ii)  require  any  filing  with,  or  permit,
authorization,   consent  or  approval   of,  any  court,   arbitral   tribunal,
administrative  agency or commission or other  governmental or other  regulatory
authority or agency (a  "Governmental  Entity"),  (iii) result in a violation or
breach of, or constitute (with or without due

                                       9

<PAGE>


notice  or lapse  of time or  both) a  default  (or  give  rise to any  right of
termination,  amendment,  cancellation or acceleration or result in the creation
of any lien) under,  any of the terms,  conditions or provisions of any material
note,  bond,  mortgage,  indenture,  guarantee,  other evidence of indebtedness,
lease, license,  contract,  agreement or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of them or any
of their  properties  or assets  may be bound (a  "Company  Agreement")  or (iv)
violate  any  order,  writ,  injunction,  decree,  statute,  rule or  regulation
applicable to the Company, any of its Subsidiaries or any of their properties or
assets,  except in the case of clause  (ii),  (iii) or (iv) where the failure to
obtain  such  permits,  authorizations,  consents or  approvals  or to make such
filings, or where such violations,  breaches or defaults would not, individually
or in the  aggregate,  have a material  adverse  effect on the  Company  and its
Subsidiaries,  taken as a whole,  and will not materially  impair the ability of
the  Company  to  consummate  the  transactions  contemplated  hereby  or by the
Ancillary Agreements.

         Section 3.5 SEC Reports and Financial Statements. The Company has filed
with the Securities and Exchange Commission (the "SEC"), and has heretofore made
available to Parent true and complete copies of, all forms, reports,  schedules,
statements and other documents  required to be filed by it and its  Subsidiaries
since April 11, 1996 under the Exchange Act and the  Securities  Act of 1933, as
amended (the  "Securities  Act") (as such  documents have been amended since the
time of their filing,  collectively,  the "Company SEC Documents").  As of their
respective dates or, if amended, as of the date of the last such amendment,  the
Company SEC Documents,  including,  without limitation, any financial statements
or schedules included therein (the "Company  Financial  Statements") (a) did not
contain any untrue statement of a material fact or omit to state a material fact
required  to be stated  therein  or  necessary  in order to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading  and (b)  complied  in all  material  respects  with  the  applicable
requirements  of the Exchange Act or the Securities Act, as the case may be, and
the  applicable  rules and  regulations of the SEC  thereunder.  The Company SEC
Documents  include all the documents  that the Company was required to file with
the SEC  since  April 11,  1996.  The  Company  Financial  Statements  have been
prepared from, and are in accordance  with, the books and records of the Company
and  its  consolidated  Subsidiaries,  comply  in  all  material  respects  with
applicable accounting  requirements and with the published rules and regulations
of the SEC with respect  thereto,  have been prepared in accordance  with United
States generally accepted accounting principles ("GAAP") applied on a consistent
basis  during the  periods  involved  (except as may be  indicated  in the notes
thereto or, in the case of the unaudited  statements,  as permitted by Form 10-Q
of the SEC) and  present  fairly the  consolidated  financial  position  and the
consolidated  results  of  operations  and  cash  flows of the  Company  and its
consolidated  Subsidiaries as at the dates thereof or for the periods  presented
therein.  The Company has not received notice (written or oral) from and, to its
knowledge, is not under any review by any Governmental Entity in connection with
its revenue recognition policies and procedures. Without limiting the foregoing,
for any period after December 31, 1998, the Company has complied in all material
respects with  Statement of Position 97-2  (Software  Revenue  Recognition),  as
amended by Statement of Position 9804.

         Section  3.6  Absence of Certain  Changes.  Except as and to the extent
disclosed  in the  Company  SEC  Documents  filed  prior  to the  date  of  this
Agreement,  since  September  30, 1999,  the Company and its  Subsidiaries  have
conducted  their  respective  businesses  and  operations  consistent  with past
practice only in the ordinary and usual course.  From September 30, 1999 through
the date of this  Agreement,  there has not occurred (i) any events,  changes or
effects  (including the incurrence of any liabilities of any nature,  whether or
not accrued,  contingent  or  otherwise)  having or,  which would be  reasonably
likely to have, individually or in the aggregate, a

                                       10

<PAGE>


material  adverse  effect  on  the  Company  and  its  Subsidiaries;   (ii)  any
declaration,  setting  aside or payment of any  dividend  or other  distribution
(whether in cash, stock or property) with respect to the equity interests of the
Company or of any of its Subsidiaries; or (iii) any change by the Company or any
of its Subsidiaries in accounting  principles or methods,  except insofar as may
be required by a change in GAAP.  Since  September  30, 1999 neither the Company
nor any of its Subsidiaries  has taken any of the actions  prohibited by Section
5.1 hereof.

         Section 3.7 No Undisclosed Liabilities.  Except as set forth in Section
3.7 of the Disclosure  Schedule,  since September 30, 1999,  neither the Company
nor any of its  Subsidiaries  has incurred any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that (a) have, or would
be reasonably  likely to have, a material  adverse effect on the Company and its
Subsidiaries or (b) (i) would be required to be reflected or reserved against on
a consolidated balance sheet of the Company and its Subsidiaries  (including the
notes  thereto)  prepared in  accordance  with GAAP as applied in preparing  the
consolidated  balance sheet of the Company and its  Subsidiaries as of September
30,  1999  and (ii)  were  outside  the  ordinary  course  of  business  and not
immaterial  in amount.  Section 3.7 of the  Disclosure  Schedule  sets forth the
amount of  principal  and unpaid  interest  outstanding  under  each  instrument
evidencing   indebtedness  of  the  Company  and  its  Subsidiaries  which  will
accelerate or become due or result in a right of redemption or repurchase on the
part of the holder of such indebtedness  (with or without due notice or lapse of
time) as a result of this Agreement, any of the Ancillary Agreements, the Merger
or the other transactions contemplated hereby or thereby.

         Section  3.8  Information  in  Proxy  Statement/Prospectus.  The  Proxy
Statement/Prospectus  (as  defined in Section  5.10  hereof)  (or any  amendment
thereof  or  supplement  thereto)  will  not,  at the  date  mailed  to  Company
stockholders  or at the times of the  Special  Meetings  (as  defined in Section
5.9(b) hereof), contain any untrue statement of a material fact or omit to state
any material  fact  required to be stated  therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not  misleading,  except  that no  representation  is made by the  Company  with
respect to statements  made therein based on  information  supplied by Parent or
Sub  specifically for inclusion in the Proxy  Statement/Prospectus.  None of the
information  supplied by the Company  specifically  for  inclusion in the Parent
Registration  Statement (as defined in Section 5.10 hereof) will, at the date it
becomes  effective and at the time of the Special  Meetings,  contain any untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under  which  they  are  made,  not  misleading.  The  Proxy
Statement/Prospectus specifically, as to information supplied by the Company for
inclusion  therein,  will comply in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder.

         Section 3.9 Employee Benefit Matters.

                  (a)  All   employee   benefit   plans  and  other   incentive,
compensation  or benefit  agreements  or  arrangements  covering  any current or
former  employee or director of, or consultant to, the Company or any Subsidiary
are listed in Section  3.9 of the  Disclosure  Schedule  (the  "Company  Benefit
Plans").  True and  complete  copies of the Company  Benefit  Plans,  trusts and
reports and summaries required under the Code or the Employee  Retirement Income
Security Act of 1974, as amended ("ERISA"), have been provided to the Purchaser.
Except as set forth in Section 4.11(a) of the Disclosure Schedule,  each Company
Benefit Plan has been  administered  and maintained in all material  respects in
compliance  with its  terms and with all  applicable  laws,  including,  but not
limited  to,  ERISA and the Code.  Each  Company  Benefit  Plan  intended  to be
qualified  under Section 401(a) of the

                                       11

<PAGE>


Code has been  determined by the Internal  Revenue  Service (the "IRS") to be so
qualified  and to the  knowledge of the Company no event has occurred that could
reasonably be expected to adversely  affect the qualified status of such Company
Benefit Plan.  Neither the Company nor any of its Subsidiaries has incurred (and
to the  knowledge  of the  Company  no  transaction  has  occurred  which  could
reasonably  be expected to give rise to) any  liability or penalty under Section
4975 of the Code or Section 502(i) of ERISA with respect to any Company  Benefit
Plan. To the knowledge of the Company, there are no pending, nor has the Company
or any of its Subsidiaries received notice of any threatened,  claims against or
otherwise involving any of the Company Benefit Plans. No Company Benefit Plan is
under audit or  investigation by the IRS, the Department of Labor or the Pension
Benefit Guaranty Corporation, and to the knowledge of the Company, no such audit
or investigation is pending or threatened.  All material contributions and other
payments  required to be made as of the date of this  Agreement  to, or pursuant
to, the  Company  Benefit  Plans have been made or  accrued  for in the  Company
Financial Statements.  Neither the Company nor any entity under "common control"
with the  Company  within the  meaning of Section  4001 of ERISA has at any time
contributed  to, or been  required  to  contribute  to, any  "pension  plan" (as
defined  in  Section  3(2) of  ERISA)  that is  subject  to Title IV of ERISA or
Section 412 of the Code,  including,  without  limitation,  any  "multi-employer
plan" (as defined in Sections  3(37) and  4001(a)(3) of ERISA),  and neither the
Company nor any such entity has at any time incurred or could reasonably  expect
to incur any liability under Title IV of ERISA.

                  (b) The  consummation  of the  Transactions  will not  (either
alone or upon  the  occurrence  of any  additional  or  subsequent  events)  (i)
constitute  an event under any Company  Benefit  Plan,  employment  or severance
agreement,   trust,  loan  or  other   compensation  or  benefits  agreement  or
arrangement  that will or may result in any payment (whether of severance pay or
otherwise),  acceleration,  forgiveness of indebtedness,  vesting, distribution,
increase in benefits or  obligation to fund benefits with respect to any current
or former employee, officer, director, agent or consultant of the Company or any
Subsidiary,  or (ii) result in the triggering or imposition of any  restrictions
or  limitations  on the  right  of the  Company  or the  Purchaser  to  amend or
terminate  any  Company  Benefit  Plan and receive the full amount of any excess
assets  remaining or resulting  from such amendment or  termination,  subject to
applicable  taxes.  No  payment  or  benefit  which  will  or may be made by the
Company,  any of its  Subsidiaries,  the  Purchaser  or any of their  respective
affiliates  with respect to any employee,  officer or director of the Company or
its Subsidiaries will be characterized as an "excess parachute  payment," within
the meaning of Section  280G(b)(1) of the Code and no amount of any such payment
or benefit will fail to be deductible by the Company by reason of Section 162(m)
of the Code.

                  (c)  Neither  the  Company  nor  any of its  Subsidiaries  (i)
maintains or contributes to any Company Benefit Plan which provides,  or has any
liability to provide,  life  insurance,  medical,  severance  or other  employee
welfare  benefits to any employee upon or with respect to periods  following his
retirement or termination  of  employment,  except as may be required by Section
4980B of the Code; or (ii) has ever represented, promised or contracted (whether
in oral or written form) to any employee (either individually or to employees as
a group) that such employee(s)  would be provided with life insurance,  medical,
severance  or  other  employee   welfare   benefits  upon  their  retirement  or
termination of employment, except to the extent required by Section 4980B of the
Code. All amounts of deferred  compensation  benefits under any Company  Benefit
Plan have been properly accrued for in the Financial Statements.

                  (d) With  respect  to each  Company  Benefit  Plan which is an
"employee welfare benefit plan" within the meaning of Section 3(1) of ERISA, all
material  claims  incurred  (including  claims  incurred  but not  reported)  by
employees  thereunder  for which the Company is, or will become,  liable are

                                       12

<PAGE>


(i) insured  pursuant to a contract of insurance  whereby the insurance  company
bears  any risk of loss  with  respect  to such  claims;  (ii)  covered  under a
contract with a health maintenance organization (an "HMO") pursuant to which the
HMO bears the  liability for such claims,  or (iii)  reflected as a liability in
Section 3.9(d) of the Disclosure Schedule.

         Section 3.10 Litigation; Compliance with Law.

                  (a)  Except  for  the  suits  disclosed  in  the  Company  SEC
Documents  filed prior to the date of this Agreement,  there is no suit,  claim,
action, proceeding, arbitration or investigation pending or, to the knowledge of
the  Company,  threatened  against  or  affecting,  the  Company  or  any of its
Subsidiaries  which,  individually  or in the aggregate,  is reasonably  likely,
individually  or in the  aggregate,  to have a  material  adverse  effect on the
Company and its Subsidiaries, or materially impair the ability of the Company to
consummate the Merger or the other  transactions  contemplated  hereby or by the
Ancillary  Agreements.  The  foregoing  includes,  without  limitation,  actions
pending or, to the knowledge of the Company,  threatened  (or any basis therefor
known to the Company)  involving the prior employment of any of the Company's or
any of its Subsidiaries'  employees,  their use in connection with the Company's
or any of its Subsidiaries'  business of any information,  techniques,  patents,
patent  applications,   copyrights,  trade  secrets,   inventions,   technology,
know-how,  Software  (as  defined  in  Section  3.17(j))  or other  intellectual
property rights allegedly proprietary to any of their former employers, or their
obligations under any agreements with prior employers.

                  (b) The Company and its Subsidiaries have complied in a timely
manner  and in all  material  respects,  with all laws,  statutes,  regulations,
rules, ordinances, and judgments, decrees, orders, writs and injunctions, of any
court or Governmental  Entity  relating to any of the property owned,  leased or
used by them, or applicable to their  business,  including,  but not limited to,
(1) the Foreign  Corrupt  Practices Act of 1977 and any other laws regarding use
of funds for political  activity or commercial  bribery and (2) laws relating to
equal employment  opportunity,  discrimination,  occupational safety and health,
environmental, interstate commerce and antitrust.

         Section  3.11 No Default.  The  business of the Company and each of its
Subsidiaries  has not been and is not being conducted in default or violation of
any  term,  condition  or  provision  of  (i)  its  respective   certificate  of
incorporation or bylaws or similar  organizational  documents,  (ii) any Company
Agreement  or  (iii)  any  federal,   state,  local  or  foreign  law,  statute,
regulation,   rule,  ordinance,   judgment,  decree,  order,  writ,  injunction,
concession,   grant,   franchise,   permit  or  license  or  other  governmental
authorization  or approval  applicable to the Company or any of its Subsidiaries
or relating to any of the property owned,  leased or used by them, or applicable
to their business, excluding from the foregoing clauses (ii) and (iii), defaults
or violations that would not, individually or in the aggregate,  have a material
adverse  effect on the Company and its  Subsidiaries  or  materially  impair the
ability  of the  Company  to  consummate  the  Merger or the other  transactions
contemplated  hereby  or by the  Ancillary  Agreements.  As of the  date of this
Agreement, no investigation or review by any Governmental Entity or other entity
with  respect to the  Company or any of its  Subsidiaries  is pending or, to the
knowledge of the Company,  threatened,  nor has any Governmental Entity or other
entity  indicated an intention  to conduct the same,  other than,  in each case,
those the outcome of which, as far as reasonably can be foreseen,  in the future
will not,  individually or in the aggregate,  have a material  adverse effect on
the Company and its Subsidiaries.

         Section 3.12 Taxes.

                  (a)  Except as set  forth in  Section  3.12 of the  Disclosure
Schedule,

                                       13

<PAGE>


the Company  and each of its  Subsidiaries  has timely  filed (or has had timely
filed on its  behalf)  with the  appropriate  Tax  Authorities  all Tax  Returns
required to be filed by the Company and each of its  Subsidiaries,  and such Tax
Returns are true, correct, and complete in all material respects.

                  (b) The  Company  and each of its  Subsidiaries  has paid,  or
where payment is not yet due, has established an adequate  accrual in accordance
with GAAP for the payment of, all Taxes for all periods  ending through the date
hereof.

                  (c) There are no liens for Taxes upon any  property  or assets
of the  Company or any of its  Subsidiaries,  except for liens for Taxes not yet
due and for which adequate  reserves have been  established  in accordance  with
GAAP.

                  (d) No federal,  state,  local or foreign Audits are presently
pending  with  regard  to any  Taxes  or Tax  Returns  of the  Company  and  its
Subsidiaries and to the knowledge of the Company, no such Audit is threatened.

                  (e) Except as set forth in Section  3.12(e) of the  Disclosure
Schedule,  the Tax Returns of the Company and each of its Subsidiaries  have not
been examined by the  applicable  Tax Authority (or the  applicable  statutes of
limitation for the  assessment of Taxes for such periods have expired),  and for
any year that a Tax Return was examined,  no material  adjustments were asserted
as a result of such examination which have not been resolved and fully paid, and
no issue has been raised by any Tax Authority in any Audit of the Company or any
of its  Subsidiaries  that,  if raised with  respect to any other  period not so
audited,  could be  expected  to result in a  proposed  deficiency  for any such
period not so audited.

                  (f) There are no outstanding requests, agreements, consents or
waivers  to  extend  the  statutory  period  of  limitations  applicable  to the
assessment  of any  Taxes or  deficiencies  against  the  Company  or any of its
Subsidiaries,  and no power of  attorney  granted  by the  Company or any of its
Subsidiaries with respect to any Taxes is currently in force.

                  (g) Neither the Company nor any of its Subsidiaries is a party
to any agreement  providing for the allocation,  indemnification,  or sharing of
Taxes.

                  (h) Neither the Company nor any of its Subsidiaries has been a
member of any "affiliated group" (as defined in section 1504(a) of the Code) and
is not subject to Treas. Reg. 1.1502-6 for any period.

                  (i) Neither the Company nor any of its  Subsidiaries is or has
been a U.S. real property  holding  company (as defined in Section  897(c)(2) of
the Code) during the applicable period specified in Section  897(c)(1)(A)(ii) of
the Code.

                  (j) "Audit" means any audit, assessment,  or other examination
relating  to  Taxes  by any Tax  Authority  or any  judicial  or  administrative
proceedings relating to Taxes. "Tax" or "Taxes" means all federal, state, local,
and foreign taxes,  and other  assessments of a similar nature (whether  imposed
directly or through withholding),  including any interest,  additions to tax, or
penalties  applicable  thereto,  imposed by any Tax Authority.  "Tax  Authority"
means  the  IRS  and  any  other  domestic  or  foreign  governmental  authority
responsible for the administration of any Taxes. "Tax Returns" mean all federal,
state,  local,  and  foreign tax  returns,  declarations,  statements,  reports,
schedules, forms, and information returns and any amendments thereto.

                                       14

<PAGE>


         Section 3.13 Contracts.  Each Company  Agreement is valid,  binding and
enforceable  and in full force and  effect,  except  where  failure to be valid,
binding and  enforceable  and in full force and effect would not have a material
adverse  effect on the Company and its  Subsidiaries,  and there are no defaults
thereunder,  except those defaults that would not have a material adverse effect
on the Company and its  Subsidiaries.  Section 3.13 of the  Disclosure  Schedule
sets forth a true and complete list of (i) all Company  Agreements  entered into
by the Company,  or any of its  Subsidiaries  and all  amendments to any Company
Agreement,  included as exhibits to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 and (ii) all non-competition  agreements
imposing  restrictions on the ability of the Company or any of its  Subsidiaries
to conduct business in any jurisdiction or territory.

         Section 3.14 Assets;  Real Property.  The Company and its  Subsidiaries
have all  assets,  properties,  rights  and  contracts  necessary  to permit the
Company and its  Subsidiaries to conduct their business as it is currently being
conducted, except where the failure to have such assets, properties,  rights and
contracts  would  not have a  material  adverse  effect on the  Company  and its
Subsidiaries.  The Company SEC Documents  accurately  identify all material real
property or material  interests in material real  property  owned by the Company
and its Subsidiaries (the "Real Property").  The Company or its Subsidiaries has
good and marketable  title to the real property owned by them, free and clear of
all liens, charges,  security interests,  options, claims,  mortgages,  pledges,
easements,  rights-of-way  or other  encumbrances and restrictions of any nature
whatsoever,  except as described in Section 3.14 of the Disclosure  Schedule and
those that do not adversely affect the value of such real property.

         Section 3.15 Environmental Matters.  Except as disclosed in the Company
SEC Documents filed prior to the date of this Agreement, (a) the Company and its
Subsidiaries  are in  compliance in all material  respects with federal,  state,
local and foreign laws and  regulations  relating to  pollution,  protection  or
preservation of human health or the environment,  including, without limitation,
laws and regulations relating to emissions,  discharges,  releases or threatened
releases of toxic or hazardous  substances,  materials or wastes,  petroleum and
petroleum products, asbestos or asbestos-containing  materials,  polychlorinated
biphenyls,  radon,  or lead or  lead-based  paints or materials  ("Materials  of
Environmental  Concern"),  or  otherwise  relating to the  generation,  storage,
containment  (whether  above  ground or  underground),  disposal,  transport  or
handling of Materials  of  Environmental  Concern,  or the  preservation  of the
environment   or   mitigation   of  adverse   effects   thereon   (collectively,
"Environmental  Laws"),  and including,  but not limited to, compliance with any
permits  or  other  governmental  authorizations  or the  terms  and  conditions
thereof;  (b) neither the Company nor any of its  Subsidiaries  has received any
communication  or notice,  whether from a  governmental  authority or otherwise,
alleging any violation of or noncompliance with any Environmental Laws by any of
the Company or its Subsidiaries or for which the any of them is responsible, and
there is no pending or threatened claim, action,  investigation or notice by any
person or entity  alleging  potential  liability for  investigatory,  cleanup or
governmental  response  costs,  or natural  resources  or property  damages,  or
personal injuries, attorney's fees or penalties relating to (i) the presence, or
release into the environment,  of any Materials of Environmental  Concern at any
location  owned or operated by the  Company or its  Subsidiaries,  now or in the
past, or (ii) any violation,  or alleged  violation,  of any  Environmental  Law
(collectively,  "Environmental Claims"),  except where such Environmental Claims
would not have a material adverse effect or otherwise require  disclosure in the
Company SEC  Documents;  and (c) to the  knowledge of the Company,  there are no
past or  present  facts  or  circumstances  that  could  form  the  basis of any
Environmental  Claim  against  the  Company or its  Subsidiaries  or against any
person or entity whose liability for any

                                       15

<PAGE>


Environmental  Claim the Company or its  Subsidiaries  have  retained or assumed
either  contractually  or by operation of law,  except where such  Environmental
Claim, if made,  would not have a material  adverse effect or otherwise  require
disclosure  in the Company  SEC  Documents.  All permits and other  governmental
authorizations  currently  held or  required  to be held by the  Company and its
Subsidiaries  pursuant to any Environmental  Laws are identified in Section 3.15
of the Disclosure Schedule.  The Company has provided to Parent all assessments,
reports,  data,  results of investigations or audits, and other information that
is in  the  possession  of or  reasonably  available  to the  Company  regarding
environmental matters pertaining to the environmental  condition of the business
of the Company and its Subsidiaries, or the compliance (or noncompliance) by the
Company or its Subsidiaries with any Environmental Laws.

         Section 3.16 Product Liability.  Except as described in Section 3.16 of
the Disclosure Schedule, there are not presently pending or, to the knowledge of
the Company,  threatened any civil, criminal or administrative  actions,  suits,
demands, claims, hearings, notices of violation, investigations,  proceedings or
demand  letters  relating  to any  alleged  hazard or alleged  defect in design,
manufacture,  materials or workmanship, including any failure to warn or alleged
breach of express or implied warranty or representation, relating to any product
manufactured,  distributed  or  sold  by or on  behalf  of the  Company  and its
Subsidiaries,  which if adversely  determined,  would  reasonably be expected to
have a material adverse effect on the Company and its Subsidiaries.  Neither the
Company nor any of its  Subsidiaries  has extended to its  customers any written
nonuniform product warranties, indemnifications or guarantees.

         Section 3.17 Intellectual Property.

                  (a) The Company or its  Subsidiaries own or have a valid right
to use all  trademarks,  service  marks,  trade names,  Internet  domain  names,
designs,  slogans,  and general  intangibles  of like nature,  together with all
goodwill  related  to  the  foregoing  (collectively,   "Trademarks");  patents;
copyrights  (including any  registrations,  renewals and applications for any of
the  foregoing);  Software;  technology,  trade  secrets and other  confidential
information,  know-how, proprietary processes, formulae, algorithms, models, and
methodologies  (collectively,  "Trade Secrets," and together with the foregoing,
the "Intellectual Property") used in or necessary for the conduct of the Company
and each  Subsidiaries'  business as currently  conducted or  contemplated to be
conducted and described in the Company SEC Documents.

                  (b) Section 3.17(b)(1) of the Disclosure  Schedule sets forth,
for the  Intellectual  Property  owned by the  Company  or its  Subsidiaries,  a
complete  and  accurate  list of all U.S.  and  foreign  (1)  patents and patent
applications;   (2)   Trademark   registrations   (including   Internet   domain
registrations)  and  applications  and  material  unregistered  Trademarks;  (3)
copyright   registrations  and   applications,   including  those  in  Software,
indicating  for each,  the  applicable  jurisdiction,  registration  number  (or
application  number),  and date issued (or date filed).  Section 3.17(b)(2) sets
forth a complete and accurate list of all license agreements  granting any right
to use or  practice  any rights  under any  Intellectual  Property,  whether the
Company or any of its Subsidiaries is the licensee or licensor  thereunder,  and
any  written  settlements  relating  to any  Intellectual  Property to which the
Company or any of its Subsidiaries is a party or otherwise bound  (collectively,
the "License  Agreements"),  indicating for each the title,  the parties and the
date executed.

                  (c) The  Intellectual  Property owned by the Company or any of
its Subsidiaries is free and clear of all Liens, and the Company or a Subsidiary
of the Company, as noted in Section 3.17(c) of the Disclosure Schedule is listed
in the records of the appropriate United States,  state or foreign agency as the
sole owner of record for each application and

                                       16

<PAGE>


registration listed in Section 3.17(c) of the Disclosure Schedule.

                  (d) Except as set forth in Section  3.17(d) of the  Disclosure
Schedule,  the Intellectual Property owned by the Company or any Subsidiary and,
to the best of the Company's  knowledge,  any Intellectual  Property used by the
Company,  is valid and  subsisting,  in full force and effect,  and has not been
canceled, expired, or abandoned. There is no pending or, to the knowledge of the
Company,  threatened opposition,  interference or cancellation proceeding before
any  court  or   registration   authority  in  any   jurisdiction   against  the
registrations listed in Section 3.19(d) of the Disclosure  Schedule,  or, to the
best of the Company 's knowledge,  against any Intellectual Property licensed to
the Company or its Subsidiaries.

                  (e)  The  conduct  of  the  Company's  and  its  Subsidiaries'
business as currently  conducted or planned to be conducted and described in the
Company SEC Documents does not infringe upon any  Intellectual  Property  rights
owned or controlled by any third party  (either  directly or indirectly  such as
through  contributory  infringement  or inducement  to infringe).  Except as set
forth in Section  3.17(e)  of the  Disclosure  Schedule,  there are no claims or
suits pending or, to the knowledge of the Company,  threatened,  and neither the
Company nor any of its  Subsidiaries  has  received  any notice of a third party
claim or suit (1) alleging that its  activities or the conduct of its businesses
infringes  upon,   violates,   or  constitutes  the   unauthorized  use  of  the
Intellectual  Property  rights  of  any  third  party  or  (2)  challenging  the
ownership, use, validity or enforceability of any Intellectual Property.

                  (f) Except as set forth in Section  3.17(f) of the  Disclosure
Schedule, there are no settlements,  forebearances to sue, consents,  judgments,
or  orders or  similar  obligations  which (1)  restrict  the  Company's  or its
Subsidiaries'  rights  to  use  any  Intellectual  Property,  (2)  restrict  the
Company's or its Subsidiaries'  business in order to accommodate a third party's
Intellectual  Property  or (3)  permit  third  parties  to use any  Intellectual
Property  owned or  controlled  by the Company or any of its  Subsidiaries.  The
Company or its  Subsidiaries  has not licensed or sublicensed  its rights in any
material  Intellectual  Property other than pursuant to the License  Agreements,
and no  royalties,  honoraria  or other fees are  payable by the  Company or its
Subsidiaries  for the use of or right to use any Intellectual  Property,  except
pursuant to the License Agreements. The License Agreements are valid and binding
obligations of all parties thereto,  enforceable in accordance with their terms,
and there  exists no event or  condition  which will  result in a  violation  or
breach of, or constitute (with or without due notice or lapse of time or both) a
default by the  Company or, to the  knowledge  of the  Company,  any other party
under any such License Agreement.

                  (g) The Company and each of its  Subsidiaries  take reasonable
measures to protect the  confidentiality of Trade Secrets,  including  requiring
its  employees and  independent  contractors  having  access  thereto to execute
written  non-disclosure  agreements.  To the knowledge of the Company,  no Trade
Secret has been disclosed or authorized to be disclosed to any third party other
than pursuant to a non-disclosure agreement that adequately protects the Company
and the  applicable  Subsidiary's  proprietary  interests  in and to such  Trade
Secrets.  Neither the Company nor, to the  knowledge  of the Company,  any other
party to any non-disclosure agreement relating to the Company's Trade Secrets is
in breach or default thereof.

                  (h) To the  knowledge  of  the  Company,  no  third  party  is
misappropriating,  infringing,  diluting, or violating any Intellectual Property
owned by the  Company  or any of its  Subsidiaries  and,  except as set forth in
Section  3.17(h) of the  Disclosure  Schedule,  no such claims have been brought
against any third party by the Company or any of its Subsidiaries.

                                       17

<PAGE>


                  (i) Except as set forth in Section  3.17(i) of the  Disclosure
Schedule,  the  consummation of the  transactions  contemplated  hereby will not
result in the loss or  impairment  of the  Company  or any of its  Subsidiaries'
right  to own or use any of the  Intellectual  Property,  nor will  require  the
consent  of any  governmental  authority  or third  party in respect of any such
Intellectual Property.

                  (j)  Section  3.17(j)  of the  Disclosure  Schedule  lists all
Software  (other than  off-the-shelf  software  applications  programs having an
acquisition  price of less than $25,000) which are owned,  licensed,  leased, or
otherwise used by the Company or any of its  Subsidiaries,  and identifies which
of such Software is owned, licensed,  leased, or otherwise used, as the case may
be.  Section  3.17(j)  of the  Disclosure  Schedule  lists  all  Software  sold,
licensed,  leased  or  otherwise  distributed  by  the  Company  or  any  of its
Subsidiaries  to any  third  party,  and  identifies  which  Software  is  sold,
licensed,  leased, or otherwise  distributed as the case may be. With respect to
the Software set forth in Section  3.17(j) of the Disclosure  Schedule which the
Company or any of its  Subsidiaries  purports to own,  such  Software was either
developed (1) by employees of the Company or any of its Subsidiaries  within the
scope of their employment;  or (2) by independent  contractors who have assigned
their  rights to the  Company  or any of its  Subsidiaries  pursuant  to written
agreements.  For purposes of this Section 3.17, "Software" means any and all (v)
computer programs, including any and all software implementations of algorithms,
models and  methodologies,  whether in source code or object code, (w) databases
and  compilations,  including any and all data and collections of data,  whether
machine  readable or otherwise,  (x)  descriptions,  flow-charts  and other work
product used to design, plan, organize and develop any of the foregoing, (y) the
technology  supporting  any  Internet  site(s)  operated  by or on behalf of the
Company or any of its Subsidiaries,  and (z) all  documentation,  including user
manuals and training materials, relating to any of the foregoing.

                  (k) Any Software  that the Company or any of its  Subsidiaries
licenses and  maintains  pursuant to  contracts  with third  parties  ("Licensed
Software")  in order to enable such  Software to process  accurately  (including
calculating,  comparing and sequencing) in all material respects date data from,
into and between the twentieth and twenty-first  centuries,  including leap year
calculations  ("Millennial  Date Data").  All such Licensed  Software  processes
Millennial Date Data without material errors or omissions and without materially
affecting  functionality when used in accordance with the product  documentation
provided by the Company  therefor and provided  that all other  software and all
hardware and firmware used in combination with such Licensed  Software  properly
exchanges  date data with it.  To the  knowledge  of the  Company,  neither  the
Company nor any of its Subsidiaries has made any  representation  or warranty to
any third party that imposes any liability  (whether or not accrued,  contingent
or  otherwise)  on the  Company  or any of its  Subsidiaries  greater  than  the
preceding representation.

                  (l) The  Company and its  Subsidiaries  are in the process of,
and  have  substantially   completed  obtaining,   written   representations  or
assurances  from each third party that (A) provides or will  provide  Millennial
Date Data to the Company or its  Subsidiaries,  (B)  processes  or will  process
Millennial  Date  Data for the  Company  or its  Subsidiaries  or (C)  otherwise
provides or will provide any  material  product or service to the Company or its
Subsidiaries  that is dependent upon any Software,  microcode,  chip or hardware
system or component,  including  any  electronic  or  electronically  controlled
system or  component (a  "System")  that  processes  any  Millennial  Date Data,
stating that all of such Systems that are used for, or on behalf of, the Company
or its  Subsidiaries  will  process  Millennial  Date  Data  without  materially
affecting  the  supply  of  such  product  or  service  to  the  Company  or its
Subsidiaries after December 31, 1999.

                                       18

<PAGE>


         Section 3.18 Proprietary Rights and  Confidentiality  Agreements.  Each
current and former employee and officer of the Company and its  Subsidiaries has
executed a  Proprietary  Rights and  Confidentiality  Agreement  or similar such
agreement,  in substantially the form previously provided to Parent. The Company
is not aware that any of the current or former  employees  of the Company or any
of its Subsidiaries is in violation thereof.

         Section 3.19 Insurance.  The Company and each of its  Subsidiaries  has
policies of insurance and bonds of the type and in amounts  customarily  carried
by  persons  conducting  businesses  or owning  assets  similar  to those of the
Company and its  Subsidiaries.  There is no material  claim pending under any of
such  policies  or bonds as to which  coverage  has been  questioned,  denied or
disputed by the  underwriters  of such  policies or bonds.  All premiums due and
payable under all such policies and bonds have been paid and the Company and its
Subsidiaries are otherwise in compliance in all material respects with the terms
of such policies and bonds.  The Company has not been notified of any threatened
termination  of, or  material  premium  increase  with  respect  to, any of such
policies.

         Section 3.20  Suppliers  and  Customers.  Since  September 30, 1999, no
material licensor, vendor, supplier,  licensee or customer of the Company or any
of its Subsidiaries has canceled or otherwise modified its relationship with the
Company or its Subsidiaries and, to the Company's knowledge,  (a) no such person
has  any  intention  to do so,  and  (b) the  consummation  of the  transactions
contemplated hereby will not adversely affect any of such relationships.

         Section 3.21 Labor Matters.

                  (a) Except as set forth in Section  3.21(a) of the  Disclosure
Schedule,  (i) the  Company  and its  Subsidiaries  are in  compliance  with all
applicable  laws  respecting  employment  and  employment  practices,  terms and
conditions of employment,  health and safety,  and wages and hours; (ii) neither
the Company  nor any of its  Subsidiaries  has  received  written  notice of any
charge or  complaint  against  the  Company or any of its  Subsidiaries  pending
before the Equal Employment Opportunity Commission, the National Labor Relations
Board, or any other  government  agency or court or other tribunal  regarding an
unlawful  employment  practice;  (iii)  neither  the  Company  nor  any  of  its
Subsidiaries is a party to any collective  bargaining  agreement and there is no
labor strike,  slowdown or stoppage actually pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries;
(iv) neither the Company nor any of its  Subsidiaries  has received  notice that
any  representation  petition  respecting the employees of the Company or any of
its Subsidiaries has been filed with the National Labor Relations Board, and, to
the  knowledge of the  Company,  there has been no labor union prior to the date
hereof  organizing any employees of the Company or any of its Subsidiaries  into
one or more collective bargaining units; (v) there are no complaints,  lawsuits,
arbitrations or other proceedings  pending,  or to the knowledge of the Company,
threatened  by or on behalf of any present or former  employee of the Company or
any of its  Subsidiaries  alleging breach of any express or implied  contract of
employment;  (vi) to the knowledge of the Company,  no federal,  state, or local
agency  responsible  for the  enforcement of labor or employment laws intends to
conduct an  investigation  with  respect to or relating to the Company or any of
its  Subsidiaries and no such  investigation is in progress;  (vii) there are no
personnel arrangements,  understandings,  policies, rules or procedures (whether
written  or  oral)  applicable  to  employees  of  the  Company  or  any  of its
Subsidiaries  other than those set forth in  Section  3.21(a) of the  Disclosure
Schedule,  true,  correct  and  complete  copies of which have  heretofore  been
delivered to Parent;  and (viii) there are no  employment  contracts,  severance
agreements,   confidentiality   agreements   (other   than   standard   employee
non-disclosure  agreements as  contemplated  by Section  3.21(vii)) or any other
agreements

                                       19

<PAGE>


(whether  written or oral) with any  employees of the Company or any  Subsidiary
thereto.

                  (b) The  Company  and its  Subsidiaries  are and have  been in
substantial  compliance with all notice and other  requirements under the Worker
Adjustment  and Retaining  Notification  Act ("WARN") or similar state  statute.
Except as set forth in Section 3.21(b) of the Disclosure  Schedule,  none of the
employees of the Company or any of its Subsidiaries have suffered an "employment
loss" (as defined in WARN) during the  ninety-day  period prior to the execution
of this Agreement.

                  (c) Neither the Company nor any of its  Subsidiaries  is bound
by any contract, arrangement,  understanding, policy, rule or procedure (whether
written or oral) that  restricts its ability to terminate the  employment of any
of its employees at any time without payment or other liability.

         Section 3.22 Accounts Receivable.  Subject to any reserves set forth in
the balance sheet of the Company  included in the Company's  Quarterly Report on
Form 10-Q for the quarter ended  September 30, 1999, as filed with the SEC prior
to the date of this  Agreement  (the  "Company  Balance  Sheet"),  the  accounts
receivable  shown in the Company  Balance Sheet arose in the ordinary  course of
business;  were not, as of the date of the Company Balance Sheet, subject to any
material discount,  contingency,  claim of offset or recoupment or counterclaim;
and represented,  as of the date of the Company Balance Sheet,  bona fide claims
against  debtors for sales,  leases,  licenses and other  charges.  All accounts
receivable  of the Company and its  Subsidiaries  arising  after the date of the
Company  Balance Sheet through the date of this Agreement  arose in the ordinary
course of business and, as of the date of this Agreement, are not subject to any
material discount,  contingency,  claim of offset or recoupment or counterclaim,
except for normal reserves consistent with past practice. The amount carried for
doubtful  accounts  and  allowances  disclosed in the Company  Balance  Sheet is
believed by the Company as of the date of this  Agreement  to be  sufficient  to
provide for any losses  which may be sustained  or  realization  of the accounts
receivable shown in the Company Balance Sheet.

         Section  3.23  Transactions  with  Affiliates.  Except  to  the  extent
disclosed in the Company SEC Documents filed prior to the date of this Agreement
or as disclosed in Section 3.23 of the Disclosure Schedule,  since September 30,
1999,   there   have  been  no   transactions,   agreements,   arrangements   or
understandings  between the Company and its affiliates that would be required to
be disclosed under Item 404 of Regulation S-K under the Securities Act.

         Section 3.24 Opinion of Financial Advisor. The Company has received the
written opinion of Volpe Brown Whelan & Company,  LLC, dated the date hereof, to
the effect  that,  as of such date,  the  consideration  to be  received  by the
stockholders  of the Company in the Merger is fair to such  stockholders  from a
financial  point of view, a signed copy of which  opinion has been  delivered to
Parent.

         Section 3.25 Brokers or Finders. The Company represents,  as to itself,
its Subsidiaries and its affiliates,  that no agent, broker,  investment banker,
financial  advisor  or other firm or person,  other  than Volpe  Brown  Whelan &
Company, LLC is or will be entitled to any brokers' or finder's fee or any other
commission  or  similar  fee  in  connection   with  any  of  the   transactions
contemplated  by this  Agreement,  and the Company  agrees to indemnify and hold
Parent and Sub  harmless  from and against any and all  claims,  liabilities  or
obligations with respect to any other  commissions or similar fees in connection
with any of the  transactions  contemplated by this Agreement which are asserted
by any person on the basis of any act or statement  alleged to have been made by
or on behalf of the Company.  The Company has  heretofore  furnished to Parent a
complete and correct copy of all agreements  between the Company and Volpe Brown
Whelan & Company,  LLC

                                       20

<PAGE>


pursuant to which such firm would be  entitled  to any  payment  relating to the
transactions contemplated hereby.

         Section 3.26 Accounting Matters;  Reorganization.  None of the Company,
any of its  Subsidiaries  or,  to the  knowledge  of the  Company,  any of their
respective directors, officers or stockholders, has taken any action which would
prevent the Merger  from  constituting  a  reorganization  qualifying  under the
provisions of Section 368(a) of the Code.  Each of the  representations  made by
the Company to its accountants relating to treatment of the Merger as a "pooling
of interests" for accounting purposes are true and correct in all respects. Each
of the  representations  made  and to be made  by the  Company  to  KPMG  LLP in
connection with KPMG LLP's issuance of the letter referred to in Section 5.17(c)
hereof are or will be, as the case may be, true and correct in all respects.

         Section 3.27 State Takeover Statutes.  To the knowledge of the Company,
no  state  takeover  statute  (other  than  Section  203 of the  DGCL,  which is
inapplicable)  is applicable to the Merger or the  transactions  contemplated by
this agreement and the Ancillary Agreements.

         Section 3.28 Full  Disclosure.  The Company has not knowingly failed to
disclose to Parent any facts  material  to the  Company's  business,  results of
operations,   assets,   liabilities,   financial  condition  or  prospects.   No
representation  or warranty by the Company in this Agreement and no statement by
the  Company  contained  in  any  document   (including  the  Company  Financial
Statements), schedule or certificate furnished or to be furnished by the Company
to Parent  pursuant to the terms hereof,  the Option  Agreement or in connection
with the transactions  contemplated  hereby or thereby,  contains as of the date
hereof or will contain as of the  Effective  Time,  any untrue  statements  of a
material  fact or omit or will omit to state any  material  fact  necessary,  in
order  to  make  the  statements  made  herein  or  therein,  in  light  of  the
circumstances under which they were made, not misleading.

         Section 3.29  Registration  and  Preemptive  Rights.  Prior to the date
hereof,  each of (i) that certain Securities Purchase Agreement (the "Securities
Purchase  Agreement"),  dated as of July 7, 1999,  by and among the  Company and
certain  persons listed on a schedule  thereto,  (ii) that certain  Registration
Rights  Agreement,  dated as of July 7, 1999,  by and among the  Company and the
other  signatories  thereto,  and (iii) that certain  Third Amended and Restated
Registration  Rights  Agreement,  as amended,  dated as of March 3, 1995, by and
among the Company and the other  signatories  thereto,  has been  terminated  in
accordance with its terms,  such termination to be effective as of the Effective
Time and to be subject to  consummation of the Merger.  In addition,  each party
(other than the Company) to the Securities  Purchase Agreement has retroactively
waived all rights  such  party has,  may have had or may in the future  have had
pursuant to the Securities Purchase Agreement, such waiver to be effective as of
the Effective Time and to be subject to consummation of the Merger.


                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

         Parent and Sub represent and warrant to the Company as follows:

         Section 4.1 Organization.  Each of Parent and Sub is a corporation duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  incorporation,  and has all  requisite  corporate or other
power and authority and all necessary  governmental  approvals to own, lease and
operate its  properties  and to carry on its  business  as now being  conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority, and governmental approvals would not have a material
adverse effect on Parent and its Subsidiaries.

                                       21

<PAGE>


Parent and each of its Subsidiaries is duly qualified or licensed to do business
and in good standing in each jurisdiction in which the property owned, leased or
operated  by it or the  nature  of  the  business  conducted  by it  makes  such
qualification  or  licensing  necessary,  except where the failure to be so duly
qualified or licensed and in good standing would not, in the  aggregate,  have a
material adverse effect on Parent and its Subsidiaries.

         Section 4.2 Capitalization.

                  (a)  The  authorized  capital  stock  of  Parent  consists  of
100,000,000  shares of Parent  Common Stock and  10,000,000  shares of preferred
stock, par value $.001 per share (the "Parent Preferred Stock").  As of the date
hereof,   (i)  21,589,233   shares  of  Parent  Common  Stock  were  issued  and
outstanding,   (ii)  no  shares  of  Parent  Preferred  Stock  were  issued  and
outstanding, and (iii) 3,590,812 shares of Parent Common Stock were reserved for
issuance upon the exercise of outstanding  options to purchase  shares of Parent
Common  Stock  pursuant to employee  stock  option plans of Parent and all other
employee  benefit plans of Parent.  All of the issued and outstanding  shares of
Parent Common Stock are validly issued, fully paid and nonassessable and are not
subject to any preemptive or similar rights.

                  (b) Except as disclosed in this Section 4.2, as of the date of
this  Agreement,  there is no outstanding  (i) Right to purchase or otherwise to
receive from Parent or any of its Subsidiaries any of the outstanding authorized
but  unissued  or treasury  shares of the capital  stock of Parent or any of its
Subsidiaries,  (ii) security of any kind  convertible  into or exchangeable  for
such capital stock and (iii) voting trust or other agreement or understanding to
which Parent or any of its  Subsidiaries  is a party or is bound with respect to
the voting of the capital stock of Parent or any of its Subsidiaries.

         Section 4.3 Authorization; Validity of Agreement; Necessary Action.

                  (a)  Each of  Parent  and Sub has  full  corporate  power  and
authority to execute and deliver this Agreement and the Ancillary  Agreements to
which it is a party and,  subject to obtaining  approval by the affirmative vote
of the holders of a majority of the outstanding shares of Parent Common Stock of
the issuance of Parent Common Stock in  connection  with the Merger (the "Parent
Stockholder Approval"),  to consummate the transactions  contemplated hereby and
thereby.  The  execution,  delivery and  performance  of this  Agreement and the
Ancillary Agreements to which each of Parent and Sub,  respectively,  is a party
and  the  consummation  by  Parent  and  Sub of  the  Merger  and  of the  other
transactions  contemplated  hereby  and  thereby  have  been  duly  and  validly
authorized  by all  necessary  corporate  action on the part of Parent  and Sub,
respectively,  and,  subject to obtaining the Parent  Stockholder  Approval,  no
other corporate actions on the part of Parent and Sub are necessary to authorize
the execution and delivery of this  Agreement or such  Ancillary  Agreements and
the  consummation by each of them of the  transactions  contemplated  hereby and
thereby.  Each of this  Agreement and the Ancillary  Agreements to which each of
Parent and Sub, respectively, is a party has been duly executed and delivered by
Parent or Sub, as the case may be, and if applicable,  the Parent's stockholders
and  affiliates,  assuming each of this Agreement and such Ancillary  Agreements
constitutes  a valid and  binding  obligation  of the other  parties  hereto and
thereto,  constitutes  a valid and binding  obligation  of Parent or Sub, as the
case may be, and Parents stockholders and affiliates enforceable against Parent,
Sub or Parent's  stockholders and affiliates,  as the case may be, in accordance
with their  respective  terms, in accordance with its respective  terms,  except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency or
other  similar laws,  now or hereafter in effect,  affecting  creditors'  rights
generally,  and (ii) the remedy of specific performance and injunctive and other
forms of  equitable  relief  may be

                                       22

<PAGE>


subject to equitable  defenses and to the  discretion  of the court before which
any proceeding therefor may be brought.  The shares of Parent Common Stock to be
issued pursuant to the Merger, upon receipt of the Parent Stockholder  Approval,
when  issued in  accordance  with the  terms  hereof,  will be duly  authorized,
validly  issued,  fully paid and  nonassessable  and not  subject to  preemptive
rights.

                  (b) The Boards of  Directors  of Parent and Sub each have duly
and validly approved and taken all corporate action required to be taken by such
Board of Directors for the consummation of the transactions contemplated by this
Agreement and the  Ancillary  Agreements to which Parent or Sub, as the case may
be, is a party. The Parent Stockholder  Approval is the only vote of the holders
of any  class or series  of  Parent  capital  stock  necessary  to  approve  the
Agreement.  As of the date hereof,  the stockholders of Parent who have executed
the Parent Stockholder Agreements collectively own shares of Parent Common Stock
representing,  in the  aggregate,  voting power  sufficient to effect the Parent
Stockholder Approval.

         Section 4.4  Consents  and  Approvals;  No  Violations.  Except for the
Parent   Stockholder   Approval,   the  Merger  Filing  and  filings,   permits,
authorizations,  consents  and  approvals  as may be required  under,  and other
applicable  requirements  of, the HSR Act, the Exchange Act, the Securities Act,
and state blue sky laws, neither the execution,  delivery or performance of this
Agreement or any Ancillary  Agreements by Parent and Sub nor the consummation by
Parent and Sub of the transactions contemplated hereby or thereby nor compliance
by Parent and Sub with any of the provisions hereof or thereof will (i) conflict
with or result in any breach of any provision of the respective  certificates of
incorporation  or by-laws of Parent,  (ii) require any filing  with,  or permit,
authorization,  consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute  (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination,  cancellation
or  acceleration)  under,  any of the terms,  conditions  or  provisions  of any
material  note,  bond,  mortgage,   indenture,   guarantee,  other  evidence  of
indebtedness,  license,  lease,  contract,  agreement  or  other  instrument  or
obligation to which Parent or any of its Subsidiaries is a party or by which any
of them or any of their  properties  or assets may be bound or (iv)  violate any
order,  writ,  injunction,  decree,  statute,  rule or regulation  applicable to
Parent, any of its Subsidiaries or any of their properties or assets,  except in
the case of  clauses  (ii),  (iii) and (iv)  where the  failure  to obtain  such
permits, authorizations, consents or approvals or to make such filings, or where
such  violations,  breaches  or  defaults  would  not,  individually  or in  the
aggregate,  have a material  adverse  effect on Parent  and will not  materially
impair the ability of Parent or Sub to consummate the transactions  contemplated
hereby or by the Ancillary Agreements.

         Section 4.5 Information in Proxy Statement/Prospectus. The Registration
Statement (or any amendment thereof or supplement thereto) will not, at the date
it becomes  effective  and at the times of the  Special  Meetings,  contain  any
untrue  statement of a material fact or omit to state any material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the  circumstances  under which they are made, not  misleading,  except
that no  representation is made by Parent or Sub with respect to statements made
therein  based on  information  supplied  by the Company  for  inclusion  in the
Registration  Statement.  None of the information  supplied by Parent or Sub for
inclusion or  incorporation by reference in the Proxy  Statement/Prospectus,  at
the date mailed to stockholders  and at the time of the Special  Meetings,  will
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  are  made,  not
misleading.  The Registration Statement, as to information supplied by Parent or
Sub, will comply in all material  respects with the provisions of

                                       23

<PAGE>


the Securities Act and the rules and regulations thereunder.

         Section 4.6 SEC Reports and Financial Statements. Parent has filed with
the SEC,  and has  heretofore  made  available  to the Company true and complete
copies  of,  all  forms,  reports,  schedules,  statements  and other  documents
required to be filed by it and its  Subsidiaries  since August 5, 1999 under the
Exchange Act or the  Securities  Act (as such  documents have been amended since
the time of their filing, collectively, the "Parent SEC Documents"). As of their
respective dates or, if amended, as of the date of the last such amendment,  the
Parent SEC Documents, including, without limitation, any financial statements or
schedules  included  therein  (a) did not  contain  any  untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made,  not  misleading  and (b)  complied in all  material
respects with the applicable  requirements of the Exchange Act or the Securities
Act, as the case may be, and the  applicable  rules and  regulations  of the SEC
thereunder.  The Parent SEC Documents  include all the documents that Parent was
required  to file with the SEC since  August 5, 1999.  Each of the  consolidated
financial  statements  included in the Parent SEC  Documents  have been prepared
from,  and are in  accordance  with,  the books and  records  of Parent  and its
consolidated  Subsidiaries,  comply in all  material  respects  with  applicable
accounting  requirements and with the published rules and regulations of the SEC
with respect  thereto,  have been prepared in accordance  with GAAP applied on a
consistent  basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements,  as permitted by Form
10-Q of the SEC) and present fairly the consolidated  financial position and the
consolidated   results  of  operations   and  cash  flows  of   Certificate   of
Incorporation  and its consolidated  Subsidiaries as at the dates thereof or for
the periods presented therein.  Parent has not received notice (written or oral)
from and, to its knowledge,  is not under any review by any Governmental  Entity
in connection  with its revenue  recognition  policies and  procedures.  Without
limiting  the  foregoing,  for any period after  December  31, 1998,  Parent has
complied in all material  respects with State of Position 97-2 (Software Revenue
Recognition), as amended by Statement of Position 98-4.

         Section  4.7  Absence of Certain  Changes.  Except as and to the extent
disclosed in the Parent SEC Documents filed prior to the date of this Agreement,
since  September 30, 1999,  Parent and its  Subsidiaries  have  conducted  their
respective  businesses and operations in all material  respects  consistent with
past  practice only in the ordinary and usual  course.  From  September 30, 1999
through  the date of this  Agreement,  there has not  occurred  (i) any  events,
changes or effects  (including the incurrence of any  liabilities of any nature,
whether or not  accrued,  contingent  or  otherwise)  having or,  which would be
reasonably likely to have,  individually or in the aggregate, a material adverse
effect on Parent and its  Subsidiaries;  (ii) any declaration,  setting aside or
payment  of any  dividend  or other  distribution  (whether  in  cash,  stock or
property)  with  respect  to the  equity  interests  of  Parent or of any of its
Subsidiaries  other than regular  quarterly  cash dividends or dividends paid by
wholly  owned  Subsidiaries;  or  (iii)  any  change  by  Parent  or  any of its
Subsidiaries  in  accounting  principles  or methods,  except  insofar as may be
required by a change in GAAP. Since September 30, 1999 neither Parent nor any of
its Subsidiaries has taken any of the actions prohibited by Section 5.2 hereof.

         Section 4.8 Litigation; Compliance with Law.

                  (a) Except for the suits disclosed in the Parent SEC Documents
filed  prior to the date of this  Agreement,  there is no suit,  claim,  action,
proceeding, arbitration or investigation pending or, to the knowledge of Parent,
threatened  against  or  affecting,  Parent  or any of its  Subsidiaries  which,
individually

                                       24

<PAGE>


or in the aggregate, is reasonably likely,  individually or in the aggregate, to
have a material  adverse  effect on Parent and its  Subsidiaries,  or materially
impair the ability of Parent to consummate the Merger or the other  transactions
contemplated  hereby or by the Ancillary  Agreements.  The  foregoing  includes,
without limitation,  actions pending or, to the knowledge of Parent,  threatened
(or any basis therefor known to Parent) involving the prior employment of any of
Parent's or any of its  Subsidiaries'  employees,  their use in connection  with
Parent's or any of its  Subsidiaries'  business of any information,  techniques,
patents, patent applications, copyrights, trade secrets, inventions, technology,
know-how,  software or other intellectual  property rights allegedly proprietary
to any of their former employers, or their obligations under any agreements with
prior employers.

                  (b)  Parent and its  Subsidiaries  have  complied  in a timely
manner  and in all  material  respects,  with all laws,  statutes,  regulations,
rules, ordinances, and judgments, decrees, orders, writs and injunctions, of any
court or Governmental  Entity  relating to any of the property owned,  leased or
used by them, or applicable to their  business,  including,  but not limited to,
(1) the Foreign  Corrupt  Practices Act of 1977 and any other laws regarding use
of funds for political  activity or commercial  bribery and (2) laws relating to
equal employment  opportunity,  discrimination,  occupational safety and health,
environmental, interstate commerce and antitrust.

         Section 4.9  Opinion of  Financial  Advisor.  Parent has  received  the
written  opinion of Credit  Suisse First Boston,  dated the date hereof,  to the
effect that, as of such date, the Merger  Consideration  to be paid by Parent in
the Merger is fair from a  financial  point of view to Parent,  a signed copy of
which opinion has been delivered to the Company.

         Section 4.10 Brokers or Finders. No agent,  broker,  investment banker,
financial  advisor or other  firm or person,  other  than  Credit  Suisse  First
Boston,  is or will be  entitled to any  brokers'  or finder's  fee or any other
commission  or  similar  fee  in  connection   with  any  of  the   transactions
contemplated  by this  Agreement,  and Parent  agrees to indemnify  and hold the
Company harmless from and against any and all claims, liabilities or obligations
with respect to any other fees,  commissions or expenses  asserted by any person
on the basis of any act or  statement  alleged to have been made by or on behalf
of such party.

         Section 4.11 Accounting Matters; Reorganization. None of Parent, any of
its  Subsidiaries  or,  to the  knowledge  of  Parent,  any of their  respective
directors,  officers or  stockholders,  has taken any action which would prevent
the Merger from constituting a reorganization qualifying under the provisions of
Section 368(a) of the Code. Each of the  representations  made by Parent to KPMG
LLP  relating  to  treatment  of the  Merger as a  "pooling  of  interests"  for
accounting  purposes  are  true  and  correct  in  all  respects.  Each  of  the
representations  made and to be made by  Parent to KPMG LLP in  connection  with
KPMG LLP's issuance of the letter  referred to in Section  5.17(c) hereof are or
will be, as the case may be, true and correct in all respects.

         Section 4.12  Operations  of Sub. Sub was formed solely for the purpose
of engaging in the transactions  contemplated by this Agreement,  has engaged in
no  other  business   activities  and  has  conducted  its  operations  only  as
contemplated by this Agreement.


                                    ARTICLE V

                                    COVENANTS

         Section 5.1 Interim  Operations of the Company.  The Company  covenants
and agrees that, except (i) as expressly provided in this Agreement or (ii)

                                       25

<PAGE>


with the prior written consent of Parent, after the date hereof and prior to the
Effective Time:

                  (a) the business of the Company and its  Subsidiaries  will be
conducted in the ordinary and customary course consistent with past practice and
each of the Company and its Subsidiaries  shall use its best efforts to preserve
its  business  organization  intact and maintain  its  existing  relations  with
customers, suppliers, employees, creditors and business partners;

                  (b) the  Company  will not,  directly  or  indirectly,  split,
combine or reclassify the  outstanding  Company Common Stock, or any outstanding
capital stock of any of the Subsidiaries of the Company;

                  (c) neither the Company nor any of its Subsidiaries  shall (i)
amend its  certificate  of  incorporation  or by-laws or similar  organizational
documents;  (ii)  declare,  set aside or pay any dividend or other  distribution
payable in cash,  stock or property  with  respect to its capital  stock;  (iii)
issue, sell, transfer,  pledge, dispose of or encumber any additional shares of,
or securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its Subsidiaries,  other than issuances  pursuant to the
exercise of Company Options  outstanding on the date hereof,  in accordance with
their present terms and the grant of options to purchase Company Common Stock to
new non-executive level employees consistent with past practices; (iv) transfer,
lease,  license,  sell, mortgage,  pledge,  dispose of, or encumber any material
assets other than in the  ordinary  and usual course of business and  consistent
with past practice;  or (v) redeem,  purchase or otherwise  acquire  directly or
indirectly any of its capital stock;

                  (d) neither the Company nor any of its Subsidiaries  shall (i)
grant any  increase  in the  compensation  payable  or to become  payable by the
Company or any of its Subsidiaries to any of its officers, directors, employees,
agents or consultants (other than increases for non-executive level employees in
the  ordinary  course of not more than  10%);  (ii)  adopt or enter into any new
plan,  policy,  agreement or arrangement that would constitute a Company Benefit
Plan, or amend or otherwise  increase,  or accelerate  the payment or vesting of
the amounts  payable or to become  payable  under any existing  Company  Benefit
Plan;  (iii)  enter into any, or amend any  existing,  employment  or  severance
agreement with or, except in accordance  with the existing  written  policies of
the Company previously  delivered to Parent,  grant any severance or termination
pay  to  any  officer,  director  or  employee  of  the  Company  or  any of its
Subsidiaries;  or  (iv)  make  any  loans  to any of  its  officers,  directors,
employees,  agents or consultants or make any changes in its existing  borrowing
or  lending  arrangements  for or on  behalf  of any of  such  persons,  whether
contingent on the Merger or otherwise;

                  (e)  neither the  Company  nor any of its  Subsidiaries  shall
modify,  amend or terminate any of the Company  Agreements or waive,  release or
assign any material rights or claims,  except in the ordinary course of business
and consistent with past practice;

                  (f) the Company and its  Subsidiaries  shall use  commercially
reasonable  efforts to prevent  any  material  insurance  policy  naming it as a
beneficiary or a loss payable payee to be canceled or terminated  without notice
to Parent,  except in the ordinary  course of business and consistent  with past
practice;

                  (g)  neither the  Company  nor any of its  Subsidiaries  shall
license or otherwise transfer,  dispose of, permit to lapse or otherwise fail to
preserve any of the Company's or any of its Subsidiaries'  Intellectual Property
Rights,  or dispose of or  disclose  to any  person who has not  entered  into a
confidentiality  agreement  any trade secret,  formula,  process

                                       26

<PAGE>


or know-how not theretofore a matter of public knowledge, except in the ordinary
course of business and consistent with past practice;

                  (h)  neither the  Company  nor any of its  Subsidiaries  shall
cancel any debts or waive,  release or relinquish  any contract  rights or other
rights of substantial value,  except  settlements of accounts  receivable in the
ordinary course of business and consistent with past practice;

                  (i) neither the Company nor any of its Subsidiaries shall: (i)
incur or assume any long-term debt except for amounts set forth in the Company's
budget  previously  delivered to Parent and,  except in the  ordinary  course of
business  consistent  with  past  practice,   incur  or  assume  any  short-term
indebtedness  in  amounts  not  consistent  with  past  practice;  (ii)  assume,
guarantee,  endorse or otherwise become liable or responsible (whether directly,
contingently  or otherwise) for the  obligations of any other person,  except in
the ordinary  course of business and consistent  with past practice;  (iii) make
any loans,  advances or capital  contributions  to, or investments in, any other
person  (other than to wholly  owned  Subsidiaries  of the Company or  customary
advances to employees for travel and business expenses in the ordinary course of
business and  consistent  with past  practice);  or (iv) enter into any material
commitment or transaction (including, but not limited to, any borrowing, capital
expenditure   or  purchase,   sale  or  lease  of  assets)  other  than  capital
expenditures  pursuant to the Company's capital  expenditures  budget previously
delivered to Parent and other capital expenditures that do not exceed $50,000 in
the aggregate since September 30, 1999;

                  (j) neither the Company nor any of it s Subsidiaries shall (i)
change any of the accounting principles used by it unless required by GAAP; (ii)
take or allow to be taken any action  which would  jeopardize  the  treatment of
Parent's  business  combination  with the Company as a pooling of interests  for
accounting  purposes;  or (iii) take or allow to be taken any action which would
jeopardize qualification of the Merger as a reorganization within the meaning of
Section 368(a) of the Code;

                  (k) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any claims, liabilities or obligations (absolute,  accrued,
asserted  or  unasserted,  contingent  or  otherwise),  other than the  payment,
discharge or satisfaction of any such claims,  liabilities or obligations (i) in
the ordinary  course of business and consistent  with past practice,  or claims,
liabilities or obligations reflected or reserved against in, or contemplated by,
the consolidated  financial statements (or the notes thereto) of the Company and
its consolidated Subsidiaries,  (ii) incurred in the ordinary course of business
and  consistent  with past  practice or (iii)  which are legally  required to be
paid,  discharged or satisfied  (provided  that if such claims,  liabilities  or
obligations referred to in this clause (iii) are legally required to be paid and
are also not otherwise payable in accordance with clauses (i) or (ii) above, the
Company will notify Parent in writing if such claims, liabilities or obligations
exceed,  individually  or in the  aggregate,  $50,000  in value,  reasonably  in
advance of their payment);

                  (l) neither the Company nor any of its Subsidiaries will adopt
a plan of complete or partial liquidation,  dissolution,  merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its  Subsidiaries  or any agreement  relating to an Alternative  Transaction (as
defined in Section 5.7(a) hereof);

                  (m) neither the Company nor any of its Subsidiaries will take,
or agree to commit to take,  any action  that would make any  representation  or
warranty of the Company  contained herein inaccurate in any respect at, or as of
any time prior to, the Effective Time;

                  (n)  neither  the  Company  nor any of its  Subsidiaries  will
voluntarily

                                       27

<PAGE>


make or agree to make any changes in Tax accounting methods, waive or consent to
the extension of any statute of limitations with respect to Taxes, or consent to
any  assessment of Taxes,  or settle any judicial or  administrative  proceeding
affecting Taxes; and

                  (o) neither the Company nor any of its Subsidiaries will enter
into  an  agreement,  contract,  commitment  or  arrangement  to do  any  of the
foregoing,  or to authorize,  recommend,  propose or announce an intention to do
any of the foregoing.

         Section 5.2 Interim  Operations of Parent.  Parent covenants and agrees
that, except (i) as expressly provided in this Agreement, or (ii) with the prior
written consent of the Company, after the date hereof and prior to the Effective
Time:

                  (a) Parent will not, directly or indirectly, split, combine or
reclassify the outstanding Parent Common Stock;

                  (b)  Parent   shall  not:   (i)  amend  its   certificate   of
incorporation  or by-laws;  or (ii)  declare,  set aside or pay any  dividend or
other  distribution  payable  in cash,  stock or  property  with  respect to its
capital stock other than regular  quarterly cash dividends  consistent with past
practice;

                  (c)  neither  Parent  nor any of its  Subsidiaries  shall  (i)
change any of the accounting principles used by it unless required by GAAP; (ii)
take or allow to be taken any action  which would  jeopardize  the  treatment of
Parent's  business  combination  with the Company as a pooling of interests  for
accounting  purposes;  or (iii) take or allow to be taken any action which would
jeopardize qualification of the Merger as a reorganization within the meaning of
Section 368(a) of the Code;

                  (d) neither  Parent nor any of its  Subsidiaries  will adopt a
plan of complete or partial  liquidation,  dissolution,  merger,  consolidation,
restructuring,  recapitalization or other reorganization of Parent or any of its
Subsidiaries  or any agreement  relating to a Competing  Proposal (as defined in
Section 5.8 hereof);

                  (e) neither Parent nor any of its  Subsidiaries  will take, or
agree to commit to take,  any  action  that  would  make any  representation  or
warranty of Parent and Sub contained herein  inaccurate in any respect at, or as
of any time prior to, the Effective Time; and

                  (f) neither Parent nor any of its Subsidiaries will enter into
an agreement, contract, commitment or arrangement to do any of the foregoing, or
to  authorize,  recommend,  propose or  announce an  intention  to do any of the
foregoing.

         Section 5.3 Access to  Information.  The Company shall (and shall cause
each of its  Subsidiaries  to) afford to the officers,  employees,  accountants,
counsel,  financing sources and other representatives of Parent,  access, during
normal business hours,  during the period prior to the Effective Time, to all of
its and its Subsidiaries' properties, books, contracts,  commitments and records
and,  during  such  period,  the  Company  shall  (and  shall  cause each of its
Subsidiaries to) furnish promptly to Parent (a) a copy of each report, schedule,
registration  statement and other  document  filed or received by it during such
period pursuant to the requirements of federal securities laws and (b) all other
information  concerning  its  business,  properties  and personnel as Parent may
reasonably request.  Unless otherwise required by law, until the Effective Time,
Parent  will hold,  and cause its  officers,  employees,  accountants,  counsel,
financing sources and other  representatives to hold, any such information

                                       28

<PAGE>


which is nonpublic in confidence in accordance with the provisions of the Mutual
Non-Disclosure  Agreement between the Company and Parent, dated as of August 18,
1999 (the "Confidentiality Agreement").

         Section 5.4 HSR Act Filings.

                  (a)  Each of  Parent  and the  Company  shall,  to the  extent
applicable,  (i) make or cause to be made any filings  required of such party or
any of its  Subsidiaries  or  affiliates  under the HSR Act with  respect to the
transactions  contemplated  hereby as promptly as  practicable  and in any event
within ten business  days after the date of this  Agreement,  (ii) comply at the
earliest  practicable  date with any  request  under the HSR Act for  additional
information,  documents, or other materials received by such party or any of its
Subsidiaries  from the Federal  Trade  Commission  or the  Department of Justice
(either, an "HSR Authority") or any other Governmental Entity in respect of such
filings  or such  transactions,  and (iii)  cooperate  with the  other  party in
connection with any such filing  (including,  with respect to the party making a
filing,  providing  copies of all such documents to the nonfiling  party and its
advisors  prior to filing and, if requested,  to accept all  reasonable  changes
suggested  in  connection  therewith)  and  in  connection  with  resolving  any
investigation or other inquiry of any such agency or other  Governmental  Entity
under any Antitrust  Laws (as defined in Section  5.4(b) hereof) with respect to
any such filing or any such  transaction.  Each party  shall use its  reasonable
best  efforts  to  furnish  to  each  other  all  information  required  for any
application  or another  filing to be made  pursuant  to any  applicable  law in
connection  with the  Merger  and the other  transactions  contemplated  by this
Agreement. Each party shall promptly inform the other party of any communication
with,  and any  proposed  understanding,  undertaking,  or agreement  with,  any
Governmental Entity regarding any such filings or any such transaction.

                  (b) Each of Parent and the  Company  shall use its  reasonable
best  efforts to resolve  such  objections,  if any,  as may be  asserted by any
Governmental  Entity  with  respect  to the  transactions  contemplated  by this
Agreement  under HSR Act,  the  Sherman  Act, as  amended,  the Clayton  Act, as
amended,  the Federal Trade  Commission Act, as amended,  and any other federal,
state or foreign statutes, rules, regulations,  orders, decrees,  administrative
or judicial  doctrines or other laws that are designed to prohibit,  restrict or
regulate actions having the purpose or effect of  monopolization or restraint of
trade  (collectively,   "Antitrust  Laws").  In  connection  therewith,  if  any
administrative  or judicial action or proceeding is instituted (or threatened to
be instituted)  challenging  any  transaction  contemplated by this Agreement as
violative of any Antitrust  Law, each of Parent and the Company shall  cooperate
and use its  reasonable  best efforts  vigorously to contest and resist any such
action or  proceeding,  including any  legislative,  administrative  or judicial
action,  and to  have  vacated,  lifted,  reversed  or  overturned  any  decree,
judgment,   injunction  or  other  order,  whether  temporary,   preliminary  or
permanent,  that  is in  effect  and  that  prohibits,  prevents,  or  restricts
consummation  of the  Merger  or any  other  transactions  contemplated  by this
Agreement,  and vigorously to pursue all available avenues of administrative and
judicial appeal and all available legislative action, unless by mutual agreement
Parent and the Company decide that  litigation is not in their  respective  best
interest.  Parent shall be entitled to direct any  proceedings  or  negotiations
with any Governmental  Entity relating to any of the foregoing described in this
Section 5.4, provided that it shall afford the Company a reasonable  opportunity
to participate therein.  Notwithstanding the foregoing or any other provision of
this  Agreement,  nothing in this  Section  5.4 shall  limit a party's  right to
terminate this  Agreement  pursuant to Section 7.1, so long as such party has up
to then  complied  in all  material  respects  with its  obligations  under this
Section  5.4.  Each of Parent  and the  Company  shall use its  reasonable  best
efforts to take such action as may be required  to cause the  expiration  of any
notice  period  under the HSR Act or other  Antitrust  Laws with respect to such
transactions as promptly

                                       29

<PAGE>


as possible after the execution of this Agreement.

                  (c) Notwithstanding this Section 5.4 or any other provision of
this Agreement or any of the Ancillary Agreements,  neither Parent nor Sub shall
be  required,  whether  before or after the  Effective  Time,  to hold  separate
(including by trust or otherwise) or divest any of its business or assets or any
of the businesses or assets of the Company,  or enter into any consent decree or
other  agreement that would restrict Parent or the Company in the conduct of its
respective businesses as heretofore conducted.

         Section 5.5 Other Consents and Approvals.  Each of the Company,  Parent
and Sub will take all reasonable  actions  necessary to comply promptly with all
legal requirements which may be imposed on it with respect to this Agreement and
the  transactions  contemplated  hereby (which  actions shall  include,  without
limitation,  furnishing  all  information  in  connection  with  approvals of or
filings  with any  Governmental  Entity) and will  promptly  cooperate  with and
furnish  information  to each  other in  connection  with any such  requirements
imposed upon any of them or any of their  Subsidiaries  in connection  with this
Agreement, the Ancillary Agreements and the transactions contemplated hereby and
thereby. Each of the Company, Parent and Sub will, and will cause its respective
Subsidiaries  to, take all reasonable  actions  necessary to obtain any consent,
authorization,  order or  approval  of, or any  exemption  by, any  Governmental
Entity or other public or private third party required to be obtained or made by
Parent,  Sub, the Company or any of their  Subsidiaries  in connection  with the
Merger or the taking of any action contemplated  thereby or by this Agreement or
the Ancillary Agreements (collectively, the "Requisite Regulatory Approvals").

         Section 5.6 Employment  Agreements.  Prior to the Closing,  the Company
shall, upon Parent's request, extend offers of employment, to be effective as of
the Effective Time and to be subject to consummation  of the Merger,  to certain
key employees of the Company  identified by Parent,  in each case on terms to be
proposed by Parent,  subject to  execution  of Parent's  standard  form of offer
letter, in the form of Exhibit B-2 hereto, and non-disclosure  agreement, in the
form of  Exhibit  F  hereto,  the  effectiveness  of  which  offer  letters  and
non-disclosure  agreements  shall be conditioned  upon the  consummation  of the
transactions consummated hereby.

         Section 5.7 No Solicitation by the Company.

                  (a) The  Company  shall  not,  nor shall it permit  any of its
Subsidiaries to, nor shall it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor,  attorney,  accountant
or other  representative  retained by it or any of its Subsidiaries to, directly
or  indirectly  through  another  person,  (i)  solicit,  initiate or  encourage
(including by way of furnishing information),  or take any other action designed
to facilitate,  any inquiries or the making of any proposal the  consummation of
which would  constitute an Alternative  Transaction  or (ii)  participate in any
negotiations regarding any Alternative Transaction;  provided, however, that if,
at any time  prior to the  adoption  of this  Agreement  by the  holders  of the
Company Common Stock, the Company Board determines in good faith,  after receipt
of advice from  outside  counsel,  that such action is required  for the Company
Board to comply with its fiduciary  obligations  to the  Company's  stockholders
under applicable law, the Company may, in response to any such proposal that was
not  solicited  by it or which did not  otherwise  result  from a breach of this
Section  5.7(a),  and subject to  compliance  with Section  5.7(c)  hereof,  (A)
furnish  information  with  respect to the Company and its  Subsidiaries  to any
person pursuant to a customary  confidentiality agreement containing terms as to
confidentiality no less restrictive than the  Confidentiality  Agreement and (B)
participate  in  negotiations  regarding  such  proposal.  For  purposes of this
Agreement "Alternative  Transaction" means any of (i) a transaction or series of
transactions  pursuant to which any person (or group of persons)

                                       30

<PAGE>


other  than the  Company  and its  Subsidiaries  and other  than  Parent and its
Subsidiaries  (a  "Third  Party")   acquires  or  would  acquire,   directly  or
indirectly,  beneficial  ownership  (as defined in Rule 13d-3 under the Exchange
Act) of more than 20% of the outstanding shares of the Company, whether from the
Company or pursuant to a tender offer or exchange  offer or otherwise,  (ii) any
acquisition  or proposed  acquisition  of the Company or any of its  significant
Subsidiaries  by a  merger  or other  business  combination  whether  or not the
Company or any of its significant  Subsidiaries is the entity surviving any such
merger or business combination) or (iii) any other transaction pursuant to which
any Third Party  acquires or would acquire,  directly or indirectly,  control of
assets  (including  for  this  purpose  the  outstanding  equity  securities  of
Subsidiaries  of the Company and any entity  surviving any merger or combination
including  any  of  them)  of  the  Company  or  any  of  its  Subsidiaries  for
consideration  equal  to 20% or  more of the  fair  market  value  of all of the
outstanding  shares of the  Company  Common  Stock on the date prior to the date
hereof.

                  (b) Neither the Company Board nor any committee  thereof shall
(i) except as expressly  permitted by this  Section  5.7,  withdraw,  qualify or
modify, or propose publicly to withdraw,  qualify or modify, in a manner adverse
to Parent,  the  approval or  recommendation  by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend,  any Alternative  Transaction,  or (iii) cause
the  Company  to enter  into any  letter  of  intent,  agreement  in  principle,
acquisition   agreement  or  other  similar   agreement  (each,  a  "Acquisition
Agreement")  related  to  any  Alternative   Transaction.   Notwithstanding  the
foregoing,  in the event that prior to the  adoption  of this  Agreement  by the
holders of the Company Common Stock the Company Board  determines in good faith,
after it has received a Superior  Proposal (as defined  below) and after receipt
of advice from  outside  counsel,  that such actions is required for the Company
Board to comply with its fiduciary  obligations  to the  Company's  stockholders
under  applicable  law, the Company Board may (subject to this and the following
sentences)  inform the Company  stockholders that it no longer believes that the
Merger or this Agreement is advisable and no longer  recommends  approval of the
Merger or this Agreement  and/or  approves or recommends a Superior  Proposal (a
"Subsequent Determination"), but only at a time that is after the fifth business
day  following  Parent's  receipt of written  notice  advising  Parent  that the
Company Board has received a Superior  Proposal,  specifying  the material terms
and  conditions of such Superior  Proposal,  identifying  the person making such
Superior   Proposal   and  stating   that  it  intends  to  make  a   Subsequent
Determination.  After  providing  such  notice,  the  Company  shall  provide  a
reasonable  opportunity  to  Parent to make  such  adjustments  in the terms and
conditions  of this  Agreement  as would  enable the Company to proceed with its
original   recommendation   to   stockholders   without   making  a   Subsequent
Determination;  provided,  however,  that any such  adjustments  shall be at the
discretion  of the  parties at such time.  For  purposes  of this  Agreement,  a
"Superior Proposal" means any proposal (on its most recently amended or modified
terms,  if  amended  or  modified)  made  by a  Third  Party  to  enter  into an
Alternative  Transaction on terms which the Company Board determines in its good
faith judgment (after receiving the advice of a financial  advisor of nationally
recognized  reputation) to be more favorable to the Company's  stockholders than
the Merger taking into account all relevant factors (including  whether,  in the
good  faith  judgment  of the  Company  Board,  after  obtaining  advice  from a
financial  advisor  of  nationally  recognized  reputation,  the Third  Party is
reasonably  able to finance the  transaction,  and any proposed  changes to this
Agreement that may have been proposed by Parent in response to such  Alternative
Transaction). Notwithstanding any other provision of this Agreement, the Company
shall submit this Agreement to its stockholders whether or not the Company Board
makes a Subsequent Determination.

                  (c) In addition to the obligations of the Company set forth in

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<PAGE>


paragraphs  (a) and (b) of this Section 5.7, the Company shall  promptly  advise
Parent orally and in writing of any request for  information  or of any proposal
in connection with an Alternative Transaction, the material terms and conditions
of such request or proposal  and the identity of the person  making such request
or proposal.  The Company will keep Parent reasonably informed of the status and
details  (including  amendments or proposed  amendments)  of any such request or
proposal on a current basis.

                  (d) Nothing  contained in this Section 5.7 shall  prohibit the
Company  from  (i)  taking  and  disclosing  to  its   stockholders  a  position
contemplated by Rule 14d-9 or Rule 14e-2(a)  promulgated  under the Exchange Act
or (ii) from making any  disclosure  to its  stockholders  if, in the good faith
judgment of the Company  Board,  after  receipt of advice from outside  counsel,
failure so to disclose  would  violate  its  fiduciary  duties to the  Company's
stockholders under applicable law.

         Section 5.8 No Solicitation  by Parent.  Parent shall not, nor shall it
permit any of its  Subsidiaries  to, nor shall it authorize or permit any of its
officers,  directors or employees or any investment  banker,  financial advisor,
attorney,  accountant  or  other  representative  retained  by it or  any of its
Subsidiaries  to,  directly or  indirectly,  (i) solicit,  initiate or encourage
(including by way of furnishing information),  or take any other action designed
to  facilitate,  any  inquiries or the making of any  competing  or  alternative
proposal for Parent to acquire a third party,  the  consummation  of which would
delay,  interfere  with or adversely  affect the  consummation  of the Merger (a
"Competing  Proposal"),  or (ii) participate in any  negotiations  regarding any
Competing  Proposal;  provided,  however,  that  if,  at any  time  prior to the
adoption of this Agreement by the holders of the Parent Common Stock, the Parent
Board  determines in good faith,  after receipt of advice from outside  counsel,
that such action is required for the Parent  Board to comply with its  fiduciary
obligations  to  Parent's  stockholders  under  applicable  law,  Parent may, in
response  to any such  proposal  that was not  solicited  by it or which did not
otherwise result from a breach of this Section 5.8, (A) furnish information with
respect to Parent and its  Subsidiaries  to any person  pursuant  to a customary
confidentiality  agreement  containing  terms  as  to  confidentiality  no  less
restrictive   than  the   Confidentiality   Agreement  and  (B)  participate  in
negotiations regarding such proposal.

         In addition,  Parent shall  promptly  advise the Company  orally and in
writing of any request for  information or of any proposal in connection  with a
Competing  Proposal,  the  material  terms and  conditions  of such  request  or
proposal and the identity of the person making such request or proposal.  Parent
will keep the Company  reasonably  informed of the status and details (including
amendments or proposed  amendments) of any such request or proposal on a current
basis.

         Section 5.9  Stockholders'  Meetings.  (a) In order to  consummate  the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with  applicable  law,  duly call,  give  notice of,  convene and hold a special
meeting  of its  stockholders  (the  "Company  Special  Meeting"),  as  soon  as
practicable  after the  Registration  Statement is declared  effective,  for the
purpose of considering and voting upon this Agreement. The Company shall include
in the Proxy  Statement/Prospectus  the unanimous  recommendation of the Company
Board that  stockholders  of the Company  vote in favor of the  adoption of this
Agreement.  Nothing  contained  in the  preceding  sentence  shall  prohibit the
Company  from  (i)  taking  and  disclosing  to  its   stockholders  a  position
contemplated by Rule 14d-9 or 14e-2  promulgated  under the Exchange Act or (ii)
from making any disclosure to its stockholders if, in the good faith judgment of
the Company Board,  after receipt of advice from outside counsel,  failure so to
disclose would violate its fiduciary duties to the Company's  stockholders under
applicable law.

                                       32

<PAGE>


                  (b) If required  in order to  consummate  the Merger,  Parent,
acting through its Board of Directors (the "Parent Board"), shall, in accordance
with  applicable  law,  duly call,  give  notice of,  convene and hold a special
meeting of its stockholders (the "Parent Special Meeting" and, together with the
Company Special Meeting, the "Special  Meetings"),  as soon as practicable after
the Registration Statement is declared effective, for the purpose of considering
and voting upon the  issuance of shares of Parent  Common Stock in the Merger in
accordance  with the rules of the Nasdaq Stock  Market.  Parent shall include in
the Proxy  Statement/Prospectus  the  recommendation  of the  Parent  Board that
stockholders of Parent vote in favor of such issuance of shares of Parent Common
Stock in the Merger.  Nothing contained in the preceding sentence shall prohibit
Parent  from  (i)  taking  and   disclosing  to  its   stockholders  a  position
contemplated by Rule 14d-9 or 14e-2  promulgated  under the Exchange Act or (ii)
from making any disclosure to its stockholders if, in the good faith judgment of
the Parent Board,  after receipt of advice from outside  counsel,  failure so to
disclose  would  violate its  fiduciary  duties to Parent's  stockholders  under
applicable law.

                  (c) Parent and the Company shall use all reasonable efforts to
hold the Parent Special Meeting and the Company Special Meeting on the same date
and as soon as reasonably practicable after the date hereof.

         Section 5.10 Proxy Statement/Prospectus; Registration Statement.

                  (a) Parent and the Company shall use  commercially  reasonable
efforts to prepare and file with the SEC, as promptly as  practicable  after the
execution of this  Agreement,  a joint proxy  statement  relating to the Company
Special Meeting and the Parent Special Meeting to be held in connection with the
Transactions  (together with any amendments thereof or supplements  thereto, the
"Proxy Statement/Prospectus").  Parent shall use commercially reasonable efforts
to prepare and file with the SEC, as promptly as practicable after the execution
of this  Agreement,  a  registration  statement on Form S-4  (together  with all
amendments thereto,  the "Parent  Registration  Statement"),  in which the Proxy
Statement/Prospectus  shall be included as a prospectus,  in connection with the
registration  under the  Securities Act of the shares of Parent Common Stock and
warrants to purchase  shares of Parent Common Stock to be issued pursuant to the
Merger.   Each  of  Parent   and  the   Company   (i)  shall   cause  the  Proxy
Statement/Prospectus  and the Parent Registration Statement to comply as to form
in all material  respects with the applicable  provision of the Securities  Act,
the Exchange Act and the rules and  regulations  thereunder,  (ii) shall use all
reasonable efforts to have or cause the Parent Registration  Statement to become
effective  as promptly as  practicable,  and (iii) shall take any and all action
required under any  applicable  Federal or state  securities  laws in connection
with the  issuance  of shares of Parent  Common  Stock  pursuant  to the Merger.
Parent and the Company  shall  furnish to the other all  information  concerning
Parent and the Company as the other may  reasonably  request in connection  with
the preparation of the documents  referred to herein. As promptly as practicable
after the Parent  Registration  Statement shall have become  effective,  each of
Parent and the  Company  shall  deliver  the Proxy  Statement/Prospectus  to its
respective stockholders.

                  (b) The information supplied by each of Parent and the Company
for   inclusion   in  the   Parent   Registration   Statement   and  the   Proxy
Statement/Prospectus shall not (i) at the time the Parent Registration Statement
is declared effective,  (ii) at the time the Proxy  Statement/Prospectus (or any
amendment thereof or supplement  thereto) is first mailed to the stockholders of
Parent or the Company, (iii) at the time of the Company Special Meeting, (iv) at
the time of the Parent Special  Meeting,  or (v) at the Effective Time,  contain
any untrue  statement  of a  material  fact or omit to state any  material  fact
required  to be stated  therein  or  necessary  in order to make the  statements
therein not

                                       33

<PAGE>


misleading.  If,  at any  time  prior  to  the  Effective  Time,  any  event  or
circumstance relating to the Company, any Subsidiary of the Company, Parent, any
Subsidiary  of Parent,  or their  respective  officers or  directors,  should be
discovered  by such  party  which  should  be set  forth  in an  amendment  or a
supplement    to   the   Parent    Registration    Statement    or   the   Proxy
Statement/Prospectus,  such party shall  promptly  inform the other  thereof and
take appropriate action in respect thereof.

         Section 5.11 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take,  or cause to be taken,  all action and to do, or cause to be done,  all
things  necessary,  proper  or  advisable,  whether  under  applicable  laws and
regulations or otherwise,  or to remove any injunctions or other  impediments or
delays, legal or otherwise,  to consummate and make effective the Merger and the
other transactions  contemplated by this Agreement and the Ancillary Agreements.
In case at any time after the Effective  Time any further action is necessary or
desirable  to  carry  out  the  purposes  of  this  Agreement  or the  Ancillary
Agreements,  the proper  officers and  directors of the Company and Parent shall
use all  reasonable  efforts to take, or cause to be taken,  all such  necessary
actions.

         Section 5.12 Publicity. So long as this Agreement is in effect, neither
the Company,  Parent nor any of their respective affiliates shall issue or cause
the publication of any press release or other  announcement  with respect to the
Merger,  this Agreement,  the Ancillary  Agreements,  or the other  transactions
contemplated  hereby or  thereby  without  the prior  consultation  of the other
party,  except as may be  required  by law or by any  listing  agreement  with a
national securities  exchange.  Without limiting the foregoing,  so long as this
Agreement is in effect,  the Company shall not issue or cause the publication of
any press  release or other  announcement  without the prior  consent of Parent,
which consent shall not be unreasonably withheld.

         Section 5.13  Notification of Certain  Matters.  The Company shall give
prompt notice to Parent and Parent shall give prompt  notice to the Company,  of
(i)  the   occurrence  or   non-occurrence   of  any  event  the  occurrence  or
non-occurrence of which would cause any  representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective  Time and (ii) any material  failure of the Company or Parent,  as
the case may be, to comply with or satisfy any covenant,  condition or agreement
to be  complied  with or  satisfied  by it  hereunder  or  under  any  Ancillary
Agreement;  provided,  however, that the delivery of any notice pursuant to this
Section  5.13  shall  not  limit or  otherwise  affect  the  remedies  available
hereunder to the party receiving such notice.

         Section 5.14  Directors' and Officers'  Insurance and  Indemnification.
Parent agrees that at all times after the Effective Time, it shall indemnify, or
shall cause the Company (or the  Surviving  Corporation  if after the  Effective
Time) and its Subsidiaries to indemnify,  each person who is now, or has been at
any time prior to the date  hereof,  a director  or officer of the Company or of
any of the  Company's  Subsidiaries,  successors  and assigns  (individually  an
"Indemnified  Party" and collectively the  "Indemnified  Parties"),  to the same
extent and in the same manner as is now provided in the respective  certificates
of  incorporation  or by-laws or in the  indemnity  agreements,  copies of which
agreements  have been  previously  provided  to Parent,  of the Company and such
Subsidiaries  or  otherwise  in effect on the date  hereof,  with respect to any
claim,  liability,  loss, damage, cost or expense (whenever asserted or claimed)
("Indemnified  Liability")  based in whole or in part on, or arising in whole or
in part out of, any matter  existing or occurring  at or prior to the  Effective
Time. Parent shall, and shall cause the Company (or the Surviving Corporation if
after the  Effective  Time) to,  maintain  in effect for not less than six years
after the  Effective  Time the current  policies  of  directors'  and

                                       34

<PAGE>


officers' liability insurance  maintained by the Company and its Subsidiaries on
the date hereof (provided that Parent may substitute therefor policies having at
least the same coverage and containing  terms and  conditions  which are no less
advantageous to the persons  currently covered by such policies as insured) with
respect to matters  existing or  occurring  at or prior to the  Effective  Time;
provided,  however,  that if the aggregate annual premiums for such insurance at
any time during such period  shall  exceed 150% of the per annum rate of premium
currently  paid by the Company and its  Subsidiaries  for such  insurance on the
date of this  Agreement,  which  amount  is set  forth  in  Section  5.14 of the
Disclosure  Schedule,  then Parent  shall  cause the  Company (or the  Surviving
Corporation  if after the Effective  Time) to, and the Company (or the Surviving
Corporation  if after the Effective  Time) shall,  provide the maximum  coverage
that shall then be  available at an annual  premium  equal to 150% of such rate.
Without  limiting the  foregoing,  in the event any  Indemnified  Party  becomes
involved in any capacity in any action,  proceeding  or  investigation  based in
whole or in part  on,  or  arising  in  whole  or in part  out of,  any  matter,
including  the  transactions  contemplated  hereby,  existing or occurring at or
prior to the Effective Time,  then to the extent  permitted by law Parent shall,
or shall cause the Company (or the Surviving  Corporation if after the Effective
Time) to,  periodically  advance to such  Indemnified  Party its legal and other
expenses  (including the cost of any investigation  and preparation  incurred in
connection therewith),  subject to the provision by such Indemnified Party of an
undertaking  to  reimburse  the  amounts  so  advanced  in the  event of a final
determination by a court of competent  jurisdiction  that such Indemnified Party
is not entitled  thereto.  Promptly  after  receipt by an  Indemnified  Party of
notice of the assertion (an "Assertion") of any claim or the commencement of any
action against him in respect to which indemnity or reimbursement  may be sought
against Parent,  the Company,  the Surviving  Corporation or a Subsidiary of the
Company or the Surviving Corporation ("Indemnitors") hereunder, such Indemnified
Party shall notify any Indemnitor in writing of the  Assertion,  but the failure
to so notify any Indemnitor shall not relieve any Indemnitor of any liability it
may have to such  Indemnified  Party  hereunder  except where such failure shall
have  materially  prejudiced  Indemnitor  in defending  against such  Assertion.
Indemnitors  shall be entitled to participate in and, to the extent  Indemnitors
elect by written notice to such  Indemnified  Party within 30 days after receipt
by any Indemnitor of notice of such  Assertion,  to assume,  the defense of such
Assertion,  at their  own  expense,  with  counsel  chosen  by  Indemnitors  and
reasonably   satisfactory  to  such  Indemnified  Party.   Notwithstanding  that
Indemnitors  shall have elected by such written  notice to assume the defense of
any Assertion, such Indemnified Party shall have the right to participate in the
investigation  and  defense  thereof,  with  separate  counsel  chosen  by  such
Indemnified  Party,  but, until there is a conflict between the positions of the
Indemnified  Party and the  Indemnitors,  the fees and  expenses of such counsel
shall be paid by such Indemnified  Party. No Indemnified  Party shall settle any
Assertion without the prior written consent of Parent,  which consent may not be
unreasonably  withheld, nor shall Parent settle any Assertion without either (i)
the written consent of all  Indemnified  Parties against whom such Assertion was
made,  or (ii)  obtaining a general  release from the party making the Assertion
for all Indemnified Parties as a condition of such settlement. The provisions of
this Section 5.14 are intended for the benefit of, and shall be enforceable  by,
the respective Indemnified Parties.

         Section 5.15 Affiliate Agreements. The Company has previously delivered
to Parent a list setting  forth the names of all persons who are expected to be,
at the time of the  Special  Meetings,  in the  Company's  reasonable  judgment,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act or
under  applicable SEC  accounting  releases with respect to pooling of interests
accounting  treatment.  The Company shall furnish such information and documents
as Parent may  reasonably  request for the purpose of reviewing  such list.  The
Company  shall use its  reasonable

                                       35

<PAGE>


best efforts to cause each person who is  identified  as an  "affiliate"  in the
list furnished  pursuant to this Section 5.15 to execute a written  agreement as
soon as  practicable  after the date hereof,  but in no event later than the day
preceding the filing of the Registration Statement, in substantially the form of
Exhibit G hereto.  Parent has previously delivered to the Company a list setting
forth  the  names of all  persons  who are  expected  to be,  at the time of the
Special Meetings, in Parent's reasonable judgment,  "affiliates" of Parent under
applicable  SEC  accounting  releases  with  respect  to  pooling  of  interests
accounting treatment. Parent shall furnish such information and documents as the
Company may reasonably  request for the purpose of reviewing  such list.  Parent
shall use its reasonable  best efforts to cause each person who is identified as
its "affiliate"  hereunder to execute a written agreement as soon as practicable
after the date hereof,  but in no event later than the day  preceding the filing
of the Registration Statement, in substantially the form of Exhibit G hereto.

         Section 5.16  Cooperation.  Parent and the Company shall  together,  or
pursuant to an  allocation  of  responsibility  to be agreed upon between  them,
coordinate  and cooperate  (i) with respect to the timing of the Parent  Special
Meeting and the Company  Special  Meeting  and shall use their  reasonable  best
efforts to hold such meetings on the same day, (ii) in  determining  whether any
action by or in respect of, or filing with, any Governmental Entity is required,
or any actions,  consents  approvals or waivers are required to be obtained from
parties to any material  contracts,  in connection with the  consummation of the
transactions  contemplated by this Agreement and the Ancillary  Agreements,  and
(iii) in seeking any such actions, consents,  approvals or waivers or making any
such filings, furnishing information required in connection therewith and timely
seeking to obtain any such actions,  consents  approvals or waivers.  Subject to
the terms and conditions of this Agreement, Parent and the Company will each use
its  reasonable  best  efforts  to  have  the  Registration  Statement  declared
effective  under  the  Securities  Act as  promptly  as  practicable  after  the
Registration  Statement is filed,  and Parent and the Company shall,  subject to
applicable  law,  confer  on a  regular  and  frequent  basis  with  one or more
representatives of one another to report operational  matters of significance to
the Merger and the general status of ongoing  operations  insofar as relevant to
the  Merger,  provided  that the  parties  will not  confer on any matter to the
extent inconsistent with law.

         Section 5.17 Letters of Accountants.

                  (a)  Parent  shall use all  reasonable  efforts to cause to be
delivered  to the  Company a comfort  letter of KPMG LLP,  Parent's  independent
auditors,  dated  within  two  business  days  before  the  date  on  which  the
Registration  Statement shall become effective and addressed to the Company,  in
form and substance reasonably satisfactory to the Company and customary in scope
and  substance  for letters  delivered  by  independent  public  accountants  in
connection with registration  statements similar to the Registration  Statement,
which letter shall be brought down to the Effective Time.

                  (b) The Company shall use all reasonable best efforts to cause
to be  delivered  to  Parent  a  comfort  letter  of  KPMG  LLP,  the  Company's
independent  auditors,  dated within two business  days before the date on which
the Registration  Statement shall become  effective and addressed to Parent,  in
form and substance reasonably  satisfactory to Parent and customary in scope and
substance for letters delivered by independent  public accountants in connection
with registration statements similar to the Registration Statement, which letter
shall be brought down to the Effective Time.

                  (c) The Company shall use all reasonable best efforts to cause
to be delivered to Parent a letter from its independent  accountants,  dated the
Closing Date, in form and substance  reasonably  satisfactory to the Company and
Parent, stating that such independent  accountants concur with the

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<PAGE>


conclusion of Parent's  management  that the Merger will qualify as a pooling of
interest  transaction  under  Accounting  Principles  Board  Opinion  No. 16 and
applicable SEC regulations, if the Merger is consummated in accordance with this
Agreement. Parent shall use all reasonable best efforts to cause to be delivered
to the  Company a letter  from its  independent  accountants,  dated the Closing
Date, in form and substance  reasonably  satisfactory to the Company and Parent,
stating that such  independent  accountants  concur with the  conclusion  of the
Company's  management  that the Merger  will  qualify as a pooling of  interests
transaction under Accounting  Principles Board Opinion No. 16 and applicable SEC
regulations, if the Merger is consummated in accordance with this Agreement.

         Section 5.18 Consents of Accountants.  Parent and the Company will each
use reasonable best efforts to cause to be delivered to each other consents from
their respective independent auditors,  dated the date on which the Registration
Statement  shall  become  effective,  in  form  reasonably  satisfactory  to the
recipient  and  customary  in scope and  substance  for  consents  delivered  by
independent  public  accountants in connection with  registration  statements on
Form S-4 under the Securities Act.

         Section 5.19 Subsequent Financial Statements. The Company shall consult
with Parent prior to making  publicly  available its  financial  results for any
period  after the date of this  Agreement  and prior to filing any  Company  SEC
Documents  after the date of this  Agreement,  it being  understood  that Parent
shall have no liability by reason of such consultation.

         Section 5.20  Accounting  and Tax Treatment.  Each of Parent,  Sub, the
Company and their  respective  Subsidiaries  shall take all  actions  reasonably
necessary  (a) to ensure  that each of Parent  and the  Company  is a  "poolable
entity"  eligible to  participate  in a  transaction  to be  accounted  for as a
pooling of  interests  for  accounting  purposes  and (b) to cause the Merger to
qualify as a  reorganization  within the  meaning of Section  368(a) of the Code
(including,  without limitation,  by providing to a requesting party,  customary
representations  contained in the certificates referred to in Section 6.2(g) and
6.3(e)).

         Section  5.21 Nasdaq  Qualification.  Parent  shall use all  reasonable
efforts to cause the shares of Parent Common Stock to be issued in the Merger to
be  qualified  for  inclusion in the Nasdaq  Stock  Market,  subject to official
notice of issuance, as of or prior to the Effective Time.

         Section 5.22 Employee  Plans and  Arrangements.  As soon as practicable
after the execution of this  Agreement,  the Company and Parent shall confer and
work together in good faith to agree upon mutually  acceptable  employee benefit
and  compensation  arrangements  (and amend or terminate  Company employee plans
immediately  prior to the  Effective  Time,  if  appropriate).  Parent shall use
commercially  reasonable  efforts to ensure that continuous  employment with the
Company or its  Subsidiaries  shall be credited to Company  employees who become
Parent employees or become Continuing  Employees for all purposes of eligibility
and vesting of benefits  but not for  purposes  of accrual of  benefits.  Parent
shall  take  commercially  reasonable  steps  to  (a)  cause  to be  waived  all
limitations  as to  preexisting  condition  limitations,  exclusions and waiting
periods with respect to participation  and coverage  requirements  applicable to
the  employees  of the Company and its  Subsidiaries  under any welfare  benefit
plans that such  employees  are eligible to  participate  in after the Effective
Time, other than limitations,  exclusions or waiting periods that are already in
effect with respect to such employees and that have not been satisfied as of the
Effective  Time under any welfare  benefit plan  maintained  for such  employees
immediately  prior to the  Effective  Time and (b) provide each  employee of the
Company and its  Subsidiaries  with credit for any  co-payments  and deductibles
paid during the plan year commencing  immediately prior to the Effective Time in
satisfying any applicable

                                       37

<PAGE>


deductible  or  out-of-pocket  requirements  under any  welfare  plans that such
employees are eligible to  participate in after the Effective Time for such plan
year.  For  purposes  of this  Section  5.22,  "Continuing  Employee"  means any
employee  of  the  Company  who  continues  as  an  employee  of  the  Surviving
Corporation or Parent after the Effective Time.

         Section  5.23  Registration  Rights.  Parent  shall use all  reasonable
efforts to provide to the  stockholders  of the Company  listed in Schedule 5.23
hereto,  effective upon the Effective Time,  substantially the same registration
rights  with  respect  to  the  Parent  Common  Stock  they  receive  as  Merger
Consideration to which "Holders" are entitled under Section 3 of the Amended and
Restated  Investors'  Rights  Agreement  of Parent dated as of February 26, 1999
with  respect to  "Registrable  Securities"  (as those terms are defined in such
agreement);  provided,  however,  that no such  stockholder  shall be  entitled,
directly or  indirectly,  to initiate  or create any  obligation  on the part of
Parent to file a Registration Statement (as defined in such agreement).


                                   ARTICLE VI

                                   CONDITIONS

         Section  6.1  Conditions  to  the   Obligations  of  Each  Party.   The
obligations  of the Company,  on the one hand,  and Parent and Sub, on the other
hand,  to  consummate  the  Merger  are  subject  to the  satisfaction  (or,  if
permissible, waiver by the party for whose benefit such conditions exist) of the
following conditions:

                  (a) any waiting period  applicable to the  consummation of the
Merger  under the HSR Act shall have expired or been  terminated,  and no action
shall have been instituted by any HSR Authority challenging or seeking to enjoin
the consummation of this transaction, which action shall have not been withdrawn
or terminated;

                  (b) the Company  shall have  received the Company  Stockholder
Approval;

                  (c)  Parent  shall  have   received  the  Parent   Stockholder
Approval;

                  (d) no  court,  arbitrator  or  governmental  body,  agency or
official shall have issued any order,  and there shall not be any statute,  rule
or  regulation,  restraining  or prohibiting  (collectively,  "Restraints")  the
consummation  of the Merger or the  effective  operation  of the business of the
Company and its respective Subsidiaries after the Effective Time;

                  (e)  all  Requisite   Regulatory  Approvals  shall  have  been
obtained but excluding any Requisite  Regulatory  Approval the failure to obtain
which would not have a material  adverse effect on Parent,  Sub, the Company or,
after the Effective Time, the Surviving Corporation;

                  (f) the  shares  of  Parent  Common  Stock to be issued in the
Merger shall have been qualified for inclusion in Nasdaq Stock Market; and

                  (g) the  Registration  Statement  shall have become  effective
under the  Securities  Act and no stop  order  suspending  effectiveness  of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the SEC.

         Section  6.2  Conditions  to the  Obligations  of Parent  and Sub.  The
obligations  of Parent  and Sub to  consummate  the  Merger  are  subject to the
satisfaction (or waiver by Parent) of the following further conditions:

                  (a) the  representations  and  warranties of the Company shall
have been

                                       38

<PAGE>


true and  accurate  both when made and  (except  for those  representations  and
warranties  that address matters only as of a particular date which need only be
true and accurate as of such date) as of the Effective Time as if made at and as
of such time, except where the failure of such representations and warranties to
be  so  true  and  correct  (without  giving  effect  to  any  limitation  as to
"materiality"  or "material  adverse effect" set forth therein),  does not have,
and is not likely to have,  individually or in the aggregate, a material adverse
effect on the Company and its Subsidiaries taken as a whole; provided,  that the
representations  and  warranties set forth in Sections 3.2 and 3.3 shall be true
and correct in all respects;

                  (b) the Company shall have performed in all material  respects
all of its obligations  hereunder  required to be performed by it at or prior to
the Effective Time;

                  (c) each of the Ancillary  Agreements  shall be valid, in full
force and effect and complied with in all material respects;

                  (d) since  the date of this  Agreement,  there  shall not have
occurred any event, change or effect having, or which could be reasonably likely
to have,  individually  or in the  aggregate,  a material  adverse effect on the
Company and its Subsidiaries;

                  (e) Parent  shall have  received  an opinion of Fenwick & West
LLP,  substantially  in the form  attached as Exhibit  H-1 hereto and  otherwise
reasonably satisfactory in form and substance to Parent, addressed to Parent and
dated the Closing Date;

                  (f) Parent  shall have  received an opinion of Skadden,  Arps,
Slate,  Meagher & Flom LLP, in form and  substance  reasonably  satisfactory  to
Parent, dated the Effective Time, substantially to the effect that, on the basis
of facts,  representations  and  assumptions set forth in such opinion which are
consistent  with the  state of facts  existing  as of the  Effective  Time,  for
federal  income tax  purposes,  the Merger will  constitute  a  "reorganization"
within the meaning of Section  368(a) of the Code.  In rendering  such  opinion,
Skadden,   Arps,   Slate,   Meagher  &  Flom  LLP  may  receive  and  rely  upon
representations contained in certificates of Parent, the Company and others;

                  (g) The Company shall have furnished Parent with a certificate
dated the Closing  Date  signed on behalf of it by the  Chairman of the Board of
Directors of the Company and the  President and Chief  Financial  Officer of the
Company to the effect that the conditions  set forth in Sections  6.2(a) through
(d) have been satisfied; and

                  (h) The Company  shall deliver to Parent a  certification,  in
form and substance  reasonably  satisfactory to Parent, that neither the Company
nor any of its  Subsidiaries is or has been a U.S. real property holding company
(as  defined in Section  897(c)(2)  of the Code)  during the  applicable  period
specified in Section 897(c)(1)(A)(ii) of the Code.

         Section  6.3  Conditions  to  the  Obligations  of  the  Company.   The
obligations  of  the  Company  to  consummate  the  Merger  are  subject  to the
satisfaction (or waiver by the Company) of the following further conditions:

                  (a) the representations and warranties of Parent and Sub shall
have been true and accurate both when made and (except for those representations
and warranties that address matters only as of a particular date which need only
be true and accurate as of such date) as of the Effective Time as if made at and
as of such time, except where the failure of such representations and warranties
to be so true  and  correct  (without  giving

                                       39

<PAGE>


effect to any limitation as to  "materiality"  or "material  adverse effect" set
forth therein), does not have, and is not likely to have, individually or in the
aggregate,  a material adverse effect on Parent and its Subsidiaries  taken as a
whole;  provided,  that the representations and warranties set forth in Sections
4.2 and 4.3 shall be true and correct in all respects;

                  (b)  Each  of  Parent  and Sub  shall  have  performed  in all
material  respects all of the respective  obligations  hereunder  required to be
performed  by  Parent or Sub,  as the case may be, at or prior to the  Effective
Time;

                  (c) Since  the date of this  Agreement,  there  shall not have
occurred any event, change or effect having, or which could be reasonably likely
to have,  individually or in the aggregate,  a material adverse effect on Parent
and its Subsidiaries, taken as a whole;

                  (d) The  Company  shall have  received  an opinion of Skadden,
Arps, Slate,  Meagher & Flom LLP,  substantially in the form attached as Exhibit
H-2 hereto and otherwise  reasonably  satisfactory  in form and substance to the
Company, addressed to the Company and dated the Closing Date;

                  (e) The  Company  shall have  received an opinion of Fenwick &
West LLP, in form and substance  reasonably  satisfactory to the Company,  dated
the  Effective  Time,  substantially  to the effect that, on the basis of facts,
representations  and  assumptions set forth in such opinion which are consistent
with the state of facts  existing as of the Effective  Time,  for federal income
tax purposes the Merger will constitute a "reorganization" within the meaning of
Section  368(a) of the Code. In rendering  such opinion,  Fenwick & West LLP may
receive and rely upon representations  contained in certificates of the Company,
Parent and others; and

                  (f) Parent shall have furnished the Company with a certificate
dated the Closing Date signed on behalf of it by the  President of Parent to the
effect that the  conditions  set forth in Sections  6.3(a) through (c) have been
satisfied.


                                   ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

     Section 7.1  Termination.  Anything  herein or  elsewhere  to the  contrary
notwithstanding,  this  Agreement  may be  terminated  at any time  prior to the
Effective  Time, and (except in the case of 7.1(e) or 7.1(f))  whether before or
after the Parent Stockholder Approval or the Company Stockholder Approval:

                  (a) by mutual  written  consent of the Company and Parent,  if
the Board of  Directors  of each so  determines  by a vote of a majority  of its
entire Board;

                  (b) by either the Company Board or the Parent Board:

                           (i) if the Merger shall not have been  consummated by
         June 30, 2000,  unless the Company Board or Parent  Board,  as the case
         may be, has expressly restricted in writing its right to terminate this
         Agreement pursuant to this Section 7.1(b)(i);  provided,  however, that
         the  right  to  terminate  this  Agreement  pursuant  to  this  Section
         7.1(b)(i)  shall not be available to any party whose failure to perform
         any of its obligations  under this Agreement  results in the failure of
         the Merger to be consummated by such time;

                           (ii) if the  Parent  Stockholder  Approval  shall not
         have been obtained at the Parent Special Meeting duly convened therefor
         or at

                                       40

<PAGE>


         any adjournment or postponement thereof;

                           (iii) if the Company  Stockholder  Approval shall not
         have  been  obtained  at the  Company  Special  Meeting  duly  convened
         therefor or at any adjournment or postponement thereof; or

                           (iv) if any  Restraint  having any of the effects set
         forth in Section  6.1(d) shall be in effect and shall have become final
         and  nonappealable,  or if any  Governmental  Entity  that must grant a
         Requisite  Regulatory  Approval  has denied  approval of the Merger and
         such denial has become final and nonappealable; provided, however, that
         the party seeking to terminate this Agreement  pursuant to this Section
         7.1(b)(iv) shall have used commercially  reasonable  efforts to prevent
         the entry of and to remove such  Restraint or to obtain such  Requisite
         Regulatory Approval, as the case may be;

                  (c) by the  Company  Board  (provided  that the Company is not
then in  material  breach of any  representation,  warranty,  covenant  or other
agreement  contained herein), if Parent shall have materially breached or failed
to perform any of its representations, warranties, covenants or other agreements
contained in this  Agreement,  which breach or failure to perform (A) would give
rise to the failure of a condition  set forth in Section  6.3(a) or (b), and (B)
is  incapable of being cured by Parent or is not cured within 30 days of written
notice thereof;

                  (d) by the Parent Board  (provided  that Parent is not then in
material  breach of any  representation,  warranty,  covenant or other agreement
contained  herein),  if the Company shall have materially  breached or failed to
perform  in  any  material  respect  any  of  its  representations,  warranties,
covenants  or other  agreements  contained  in this  Agreement,  which breach or
failure to perform (A) would give rise to the  failure of a condition  set forth
in Section  6.2(a) or (b), and (B) is incapable of being cured by the Company or
is not cured within 30 days of written notice thereof;

                  (e) by the  Company  Board,  at any time  prior to the  Parent
Special  Meeting,  if the Parent  Board  shall have (A) failed to include in the
Proxy  Statement/Prospectus  to the  stockholders  of Parent its  recommendation
without  modification  or  qualification  that such  stockholders  approve  this
Agreement and the transactions  contemplated hereby, (B) failed to reaffirm such
recommendation  upon the Company's  request,  (C)  subsequently  withdrawn  such
recommendation  or (D) modified or  qualified  such  recommendation  in a manner
adverse to the interests of the Company; and

                  (f) by the  Parent  Board,  at any time  prior to the  Company
Special  Meeting,  if the Company  Board shall have (A) failed to include in the
Proxy Statement/Prospectus to the stockholders of the Company its recommendation
without  modification  or  qualification  that such  stockholders  approve  this
Agreement and the transaction  contemplated  hereby, (B) failed to reaffirm such
recommendation   upon  Parent's   request,   (C)  subsequently   withdrawn  such
recommendation  or (D) modified or  qualified  such  recommendation  in a manner
adverse to the interests of Parent.

         Section 7.2 Effect of Termination.

                  (a) In the event of  termination of this Agreement as provided
in Section 7.1 hereof, and subject to the provisions of Section 8.1 hereof, this
Agreement  shall  forthwith  become void and there shall be no  liability on the
part of any of the parties, except (i) as set forth in this Section 7.2, Section
8.1 and in the last  sentence of Section  5.3,  and (ii)  nothing  herein  shall
relieve any party from liability for any breach hereof.

                  (b) The  Company  shall pay to  Parent a fee of $4.0  million,
plus an  amount  equal to all of the costs and  expenses  incurred  by Parent in
connection with this Agreement, the Ancillary Agreements and the

                                       41

<PAGE>


consummation  of the  transactions  contemplated  hereby and  thereby,  upon the
earliest to occur of the following events:

                           (i) the  termination  of  this  Agreement  by  Parent
         pursuant to Section 7.1(f);

                           (ii) the termination of this Agreement by the Company
         or Parent pursuant to Section 7.1(b)(iii); or

                           (iii) the  termination  of this  Agreement  by Parent
         pursuant to Section  7.1(d)  and,  in the case of each of clauses  (i),
         (ii) and  (iii)  above,  if the  Company  subsequently  enters  into or
         consummates  an  Alternative  Transaction  within twelve (12) months of
         such termination.

                  (c) The fee,  costs and expenses  payable  pursuant to Section
7.2(b) hereof shall be paid on the date of the  consummation  of the Alternative
Transaction  giving  rise  to such  fee.  Parent  will  provide  to the  Company
reasonable  documentation  in respect of the costs and expenses payable pursuant
to Section 7.2(b) hereof.

                  (d)  Notwithstanding  anything to the contrary in this Section
7.2,  the  payments  provided  for in this Section 7.2 shall not be deemed to be
Parent's or Sub's exclusive  remedy,  and Parent and Sub shall have the right to
pursue any remedies available to them at law or in equity.

         Section 7.3 Amendment.  Subject to compliance with applicable law, this
Agreement  may be amended by the  parties at any time before or after the Parent
Stockholder  Approval or the Company Stockholder  Approval;  provided,  however,
that after any such approval, there may not be, without further approval of such
the stockholders of Parent (in the case of the Parent Stockholder  Approval) and
the  stockholders  of the  Company  (in  the  case  of the  Company  Stockholder
Approval),  any amendment of this  Agreement that changes the amount or the form
of the  consideration  to be  delivered  to the holders of Company  Common Stock
hereunder,  or which by law otherwise expressly requires the further approval of
such stockholders.  This Agreement may not be amended except by an instrument in
writing  signed on behalf of each of the parties hereto and duly approved by the
parties' respective Boards of Directors or a duly designated committee thereof.

         Section 7.4 Extension; Waiver. At any time prior to the Effective Time,
a party  may,  subject  to the  proviso  of  Section  7.3 (and for this  purpose
treating any waiver referred to below as an amendment),  (a) extend the time for
the  performance  of any of the  obligations or other acts of the other parties,
(b) waive any  inaccuracies in the  representations  and warranties of the other
parties  contained in this  Agreement or in any document  delivered  pursuant to
this  Agreement  or (c)  waive  compliance  by the other  party  with any of the
agreements or conditions contained in this Agreement.  Any agreement on the part
of a party to any such  extension  or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. Any extension or waiver
given in  compliance  with  this  Section  7.4 or  failure  to  insist on strict
compliance  with an  obligation,  covenant,  agreement  or  condition  shall not
operate as a waiver of, or estoppel  with  respect to, any  subsequent  or other
failure.


                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.1 Fees and Expenses.  (a) Except as otherwise contemplated by
this  Agreement,  including  Section  7.2  hereof,  whether or not the Merger is
consummated,  all costs and expenses incurred in connection with this Agreement,
the Ancillary  Agreements and the consummation of the transactions  contemplated
hereby and thereby,  including all legal,

                                       42

<PAGE>


accounting and financial  advisory fees and expenses  ("Third Party  Expenses"),
shall be paid by the party incurring such expenses,  except that (i) those costs
and  expenses  incurred in  connection  with  filing,  printing  and mailing the
Registration Statement and the Proxy Statement/Prospectus (including filing fees
related  thereto) shall be shared equally by Parent and the Company and (ii) the
Company shall cause that portion of its Third Party  Expenses  which  constitute
legal,  accounting  and  financial  advisory fees and expenses to be invoiced or
estimated  and  capped  at or  before  the  Closing  and not to  exceed,  in the
aggregate,  $850,000,  plus the fees and  expenses  required to be paid to Volpe
Brown  Whelan & Company,  LLC in  connection  with the Merger  pursuant  to that
certain engagement letter, dated November 4, 1999, between the Company and Volpe
Brown  Whelan & Company,  LLC.  If the Merger is  consummated,  Parent  shall be
responsible for such Third Party Expenses of the Company.

         Section 8.2 Nonsurvival of Representations and Warranties.  None of the
representations and warranties in this Agreement or in any schedule,  instrument
or other  document  delivered  pursuant  to this  Agreement  shall  survive  the
Effective Time.

         Section 8.3  Notices.  All notices and other  communications  hereunder
shall  be in  writing  and  shall  be  deemed  given  if  delivered  personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
FedEx, to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):

                  (a) if to Parent or Sub, to:

                      Tumbleweed Communications Corp.
                      700 Saginaw Drive
                      Redwod City, California 94063
                      Attention: Jeffrey C. Smith
                      Telephone No.: 650-216-2010
                      Telecopy No.: 650-216-2001

                      with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      525 University Avenue - Suite 220
                      Palo Alto, California 94301
                      Attention: Gregory C. Smith
                      Telephone No.: 650-470-4500
                      Facsimile No.: 650-470-4590

                      and

                  (b) if to the Company, to:

                      Worldtalk Communications Corporation
                      5155 Old Ironsides Drive
                      Santa Clara, California 95054
                      Attention: [James Heisch]
                      Telephone No.: [408-567-5012]
                      Facsimile No.: [408-567-5122]

                      with a copy to:

                      Fenwick & West LLP
                      Two Palo Alto Square
                      Palo Alto, California  94306
                      Attention:  Gordon K. Davidson
                      Telephone No.:  650-494-0600
                      Facsimile No.:  650-494-1417

                                       43

<PAGE>


         Section 8.4 Interpretation.  When a reference is made in this Agreement
to an Article or Section,  such  reference  shall be to an Article or Section of
this Agreement,  as the case may be, unless  otherwise  indicated.  Whenever the
words "include," "includes" or "including" are used in this Agreement they shall
be deemed to be followed by the words  "without  limitation."  The phrase  "made
available" in this  Agreement  shall mean that the  information  referred to has
been made available if requested by the party to whom such  information is to be
made available. The phrases "the date of this Agreement", "the date hereof," and
terms of similar import, unless the context otherwise requires,  shall be deemed
to  refer  to  November  18,  1999.  As  used  in  this   Agreement,   the  term
"affiliate(s)"  shall have the meaning  set forth in Rule l2b-2 of the  Exchange
Act.  The headings and table of contents  contained  in this  Agreement  are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation hereof.

         Section 8.5 Counterparts. This Agreement may be executed in two or more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other  parties,  it being  understood  that all
parties need not sign the same counterpart.

         Section 8.6 Entire Agreement;  No Third Party Beneficiaries;  Rights of
Ownership.  This  Agreement,  the Ancillary  Agreements and the  Confidentiality
Agreement  (including the documents and the  instruments  referred to herein and
therein): (a) constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject  matter hereof,  and (b) except as provided in Section 5.14 hereof,  are
not intended to confer upon any person other than the parties  hereto any rights
or remedies hereunder.

         Section  8.7  Severability.   If  any  term,  provision,   covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority to be invalid,  void,  unenforceable  or against its regulatory
policy,  the remainder of the terms,  provisions,  covenants and restrictions of
this  Agreement  shall  remain in full  force and  effect and shall in no way be
affected, impaired or invalidated.

         Section  8.8  Governing  Law.  This  Agreement  shall be  governed  and
construed in accordance  with the laws of the State of Delaware  without  giving
effect to the principles of conflicts of law thereof.

         Section 8.9  Assignment.  Neither this Agreement nor any of the rights,
interests  or  obligations  hereunder  shall be  assigned  by any of the parties
hereto  (whether by operation  of law or  otherwise)  without the prior  written
consent  of the  other  parties,  except  that  Sub  may  assign,  in  its  sole
discretion,  any or all of its rights,  interests and  obligations  hereunder to
Parent or to any direct or indirect wholly owned  Subsidiary of Parent.  Subject
to the preceding  sentence,  this Agreement  will be binding upon,  inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.

         IN WITNESS  WHEREOF,  Parent,  Sub and the  Company  have  caused  this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.


                              Tumbleweed Communications Corp.

                              By _______________________________________________
                                  Name:
                                  Title:

                                       44

<PAGE>


                              Worldtalk Communications Corporation

                              By _______________________________________________
                                  Name:
                                  Title:


                              Keyhole Acquisition Corp.

                              By _______________________________________________
                                  Name:
                                  Title:

                                       45

<PAGE>


                                TABLE OF CONTENTS

ARTICLE I

    MERGER..................................................................  2
          Section 1.1   The Merger..........................................  2
          Section 1.2   Effective Time......................................  3
          Section 1.3   Closing.............................................  3
          Section 1.4   Directors and Officers of the Surviving Corporation.  3

ARTICLE II

    CONVERSION OF SHARES....................................................  4

          Section 2.1   Conversion of Shares................................  4
          Section 2.2   Surrender of Certificates...........................  4
          Section 2.3   No Fractional Shares................................  5
          Section 2.4   No Dividends........................................  6
          Section 2.5   Return to Parent....................................  6
          Section 2.6   Company Option Plans................................  7
          Section 2.7   Company Warrants....................................  8
          Section 2.8   Stock Transfer Books................................  9

                                       46

<PAGE>


ARTICLE III

    REPRESENTATIONS AND WARRANTIES OF COMPANY...............................  9

          Section 3.1   Organization........................................  9
          Section 3.2   Capitalization.....................................  10
          Section 3.3   Corporate Authorization; Validity of Agreement;
                        Company Action.....................................  12
          Section 3.4   Consents and Approvals; No Violations..............  13
          Section 3.5   SEC Reports and Financial Statements...............  14
          Section 3.6   Absence of Certain Changes.........................  14
          Section 3.7   No Undisclosed Liabilities.........................  15
          Section 3.8   Information in Proxy Statement/Prospectus..........  15
          Section 3.9   Employee Benefit Matters...........................  16
          Section 3.10  Litigation; Compliance with Law....................  18
          Section 3.11  No Default.........................................  19
          Section 3.12  Taxes..............................................  19
          Section 3.13  Contracts..........................................  21
          Section 3.14  Assets; Real Property..............................  21
          Section 3.15  Environmental Matters..............................  21
          Section 3.16  Product Liability..................................  23
          Section 3.17  Intellectual Property..............................  23
          Section 3.18  Proprietary Rights and Confidentiality Agreements..  27
          Section 3.19  Insurance..........................................  27
          Section 3.20  Suppliers and Customers............................  27
          Section 3.21  Labor Matters......................................  27
          Section 3.22  Accounts Receivable................................  29
          Section 3.23  Transactions with Affiliates.......................  29
          Section 3.24  Opinion of Financial Advisor.......................  29
          Section 3.25  Brokers or Finders.................................  29
          Section 3.26  Accounting Matters; Reorganization.................  30
          Section 3.27  State Takeover Statutes............................  30
          Section 3.28  Full Disclosure....................................  30
          Section 3.29  Registration and Preemptive Rights.................  31

                                       47

<PAGE>


ARTICLE IV

    REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.......................  31

          Section 4.1   Organization.......................................  31
          Section 4.2   Capitalization.....................................  31
          Section 4.3   Authorization; Validity of Agreement; Necessary
                        Action.............................................  32
          Section 4.4   Consents and Approvals; No Violations..............  33
          Section 4.5   Information in Proxy Statement/Prospectus..........  34
          Section 4.6   SEC Reports and Financial Statements...............  34
          Section 4.7   Absence of Certain Changes.........................  35
          Section 4.8   Litigation; Compliance with Law....................  36
          Section 4.10  Brokers or Finders.................................  36
          Section 4.11  Accounting Matters; Reorganization.................  37
          Section 4.12  Operations of Sub..................................  37


ARTICLE V

    COVENANTS..............................................................  37

          Section 5.1   Interim Operations of the Company..................  37
          Section 5.2   Interim Operations of Parent.......................  41
          Section 5.3   Access to Information..............................  41
          Section 5.4   HSR Act Filings....................................  42
          Section 5.5   Other Consents and Approvals.......................  44
          Section 5.6   Employment Agreements..............................  44
          Section 5.7   No Solicitation by the Company.....................  44
          Section 5.8   No Solicitation by Parent..........................  47
          Section 5.9   Stockholders' Meetings.............................  48
          Section 5.10  Proxy Statement/Prospectus; Registration Statement.  49
          Section 5.11  Additional Agreements..............................  50
          Section 5.12  Publicity..........................................  50
          Section 5.13  Notification of Certain Matters....................  50
          Section 5.14  Directors' and Officers' Insurance and
                        Indemnification....................................  51

                                       48

<PAGE>


          Section 5.15  Affiliate Agreements...............................  52
          Section 5.16  Cooperation........................................  53
          Section 5.17  Letters of Accountants.............................  53
          Section 5.18  Consents of Accountants............................  54
          Section 5.19  Subsequent Financial Statements....................  54
          Section 5.20  Accounting and Tax Treatment.......................  55
          Section 5.21  Nasdaq Qualification...............................  55
          Section 5.22  Employee Plans and Arrangements....................  55
          Section 5.23  Registration Rights................................  56

ARTICLE VI

    CONDITIONS.............................................................  56

          Section 6.1   Conditions to the Obligations of Each Party........  56
          Section 6.2   Conditions to the Obligations of Parent and Sub....  57
          Section 6.3   Conditions to the Obligations of the Company.......  58

ARTICLE VII

    TERMINATION............................................................  60

          Section 7.1   Termination........................................  60
          Section 7.2   Effect of Termination..............................  62
          Section 7.3   Amendment..........................................  63
          Section 7.4   Extension; Waiver..................................  63

ARTICLE VIII

    MISCELLANEOUS..........................................................  63

          Section 8.1   Fees and Expenses..................................  63
          Section 8.2   Nonsurvival of Representations and Warranties......  64
          Section 8.3   Notices............................................  64
          Section 8.4   Interpretation.....................................  65
          Section 8.5   Counterparts.......................................  65

                                       49

<PAGE>


          Section 8.6   Entire Agreement; No Third Party Beneficiaries;
                        Rights of Ownership................................  66
          Section 8.7   Severability.......................................  66
          Section 8.8   Governing Law......................................  66
          Section 8.9   Assignment.........................................  66


Exhibits

                             INDEX OF DEFINED TERMS


Acquisition Agreement................................................5.7(b)
Agreement..........................................................Preamble
Alternative Transaction..............................................5.7(a)
Ancillary Agreements...............................................Recitals
Antitrust Laws ......................................................5.4(b)
Assertion..............................................................5.14
Audit...............................................................3.12(j)
Certificate of Merger...................................................1.2
Certificates.........................................................2.1(d)
Closing.................................................................1.3
Closing Date............................................................1.3
Code...............................................................Recitals
Company............................................................Preamble
Company Agreement.......................................................3.4
Company Balance Sheet..................................................3.22
Company Benefit Plans................................................3.9(a)
Company Board........................................................3.3(b)
Company Common Stock.................................................2.1(a)
Company Financial Statements............................................3.5
Company Option Plans....................................................2.6
Company Options.........................................................2.6
Company Preferred Stock..............................................3.2(a)
Company SEC Documents...................................................3.5
Company Special Meeting..............................................5.9(a)
Company Stockholder Approval.........................................3.3(a)
Company Stockholders Agreements ...................................Recitals
Company Warrants .......................................................2.7
Competing Proposal .....................................................5.8
Confidentiality Agreement...............................................5.3
DGCL....................................................................1.1
Disclosure Schedule.............................................Article III
Effective Time..........................................................1.2
Employment Agreements..............................................Recitals
Environmental Claims...................................................3.15
Environmental Laws.....................................................3.15
ERISA................................................................3.9(a)
Excess Shares .......................................................2.3(b)
Exchange Act............................................................3.4
Exchange Agent..........................................................2.2
Exchange Ratio.......................................................2.1(a)
GAAP....................................................................3.5
Governmental Entity.....................................................3.4
HMO..................................................................3.9(d)
HSR Act ................................................................3.4
HSR Authority .......................................................5.4(a)

                                       50

<PAGE>


Indemnified Liability..................................................5.14
Indemnified Parties....................................................5.14
Indemnified Party......................................................5.14
Indemnitors ...........................................................5.14
Intellectual Property...............................................3.17(a)
IRS..................................................................3.9(a)
License Agreements..................................................3.17(b)
Licensed Software...................................................3.17(k)
Liens................................................................3.2(c)
material adverse effect.................................................3.1
Materials of Environmental Concern.....................................3.15
Merger..................................................................1.1
Merger Consideration.................................................2.1(a)
Merger Filing...........................................................1.2
Millennial Date Data................................................3.17(k)
Non-Competition Agreements ........................................Recitals
Option Agreement ..................................................Recitals
Parent.............................................................Preamble
Parent Board.........................................................5.9(b)
Parent Common Stock..................................................2.1(a)
Parent Preferred Stock...............................................4.2(a)
Parent Registration Statement.......................................5.10(a)
Parent SEC Documents....................................................4.6
Parent Special Meeting...............................................5.9(b)
Parent Stockholder Approval..........................................4.3(a)
Parent Stockholders Agreement .....................................Recitals
Proxy Statement/Prospectus..........................................5.10(a)
Real Property..........................................................3.14
Requisite Regulatory Approvals..........................................5.5
Restraints...........................................................6.1(d)
Rights ..............................................................3.2(b)
SEC.....................................................................3.5
Secretary of State......................................................1.2
Securities Act..........................................................3.5
Shares Trust ........................................................2.3(c)
Software............................................................3.17(j)
Special Meetings.....................................................5.9(b)
Sub ...............................................................Preamble
Subsequent Determination ............................................5.7(b)
Subsidiary..............................................................3.1
Superior Proposal ...................................................5.7(b)
Surviving Corporation...................................................1.1
System..............................................................3.17(l)
Tax ................................................................3.12(j)
Tax Authority ......................................................3.12(j)
Tax Returns ........................................................3.12(j)
Taxes ..............................................................3.12(j)
Third Party..........................................................5.7(a)
Third Party Expenses.................................................8.1(a)
Trade Secrets.......................................................3.17(a)
Trademarks..........................................................3.17(a)
WARN Act............................................................3.21(b)

                                       51

<PAGE>

                                                                       EXHIBIT A

                                VOTING AGREEMENT

         VOTING AGREEMENT (this "Agreement"),  dated as of November 18, 1999, by
and among Tumbleweed  Communications  Corp., a Delaware corporation  ("Parent"),
Keyhole Acquisition Corp., a Delaware corporation and wholly owned subsidiary of
Parent (the "Sub"), and [Stockholder] ("Stockholder").


                                   WITNESSETH:

         WHEREAS,  immediately prior to the execution of this Agreement, Parent,
Sub and  Worldtalk  Communications  Corporation,  a  Delaware  corporation  (the
"Company")  have  entered  into an  Agreement  and Plan of  Merger  of even date
herewith (the "Merger  Agreement"),  pursuant to which the parties  thereto have
agreed, upon the terms and subject to the conditions set forth therein, to merge
Sub with and into the Company (the "Merger"); and

         WHEREAS,  as  of  the  date  hereof,  Stockholder  is  the  record  and
Beneficial  Owner (as defined  hereinafter)  of  _________  Existing  Shares (as
defined  hereinafter) of the common stock,  $0.01 par value, of the Company (the
"Company Common Stock"); and

         WHEREAS,  as  inducement  and a condition  to entering  into the Merger
Agreement, Parent has required Stockholder to agree, and Stockholder has agreed,
to enter into this Agreement.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
promises,  representations,   warranties,  covenants  and  agreements  contained
herein,  the parties  hereto,  intending to be legally  bound  hereby,  agree as
follows:

         Section  1.  Certain  Definitions.  In  addition  to the terms  defined
elsewhere  herein,  capitalized  terms  used  and not  defined  herein  have the
respective  meanings ascribed to them in the Merger  Agreement.  For purposes of
this Agreement:

         (a)  "Beneficially  Own" or "Beneficial  Ownership" with respect to any
securities means having "beneficial  ownership" of such securities as determined
pursuant to Rule 13d-3 under the  Securities  Exchange  Act of 1934,  as amended
(the "Exchange Act"). Without duplicative counting of the same securities by the
same  holder,  securities  Beneficially  Owned  by a person  include  securities
Beneficially Owned by all other persons with whom such person would constitute a
"group"  within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.

         (b)  "Existing  Shares"  means  shares  of  the  Company  Common  Stock
Beneficially Owned by Stockholder as of the date hereof.

         (c) "Securities"  means the Existing Shares together with any shares of
the  Company  Common  Stock or  other  securities  of the  Company  acquired  by
Stockholder in any capacity  after the date hereof and prior to the  termination
of this Agreement whether upon the exercise of options,  warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase,  dividend,  distribution,  split-up,  recapitalization,   combination,
exchange of shares or the like, gift, bequest,  inheritance or as a successor in
interest in any capacity or otherwise.

         Section 2.  Representations And Warranties of Stockholder.  Stockholder
represents and warrants to Parent and Sub as follows:

         (a) Ownership of Shares. Stockholder is the sole record and Beneficial



                                       1
<PAGE>

Owner of (i) the Existing Shares, (ii) Company Options to purchase [ ] shares of
Company  Common Stock  ("Stockholder  Options")  and (iii)  Company  Warrants to
purchase [ ] shares of Company  Common Stock  ("Stockholder  Warrants") . On the
date hereof,  the Existing  Shares  constitute  all of the shares of the Company
Common Stock owned of record or Beneficially Owned by Stockholder.  There are no
outstanding  options or other rights to acquire from  Stockholder or obligations
of  Stockholder  to sell or to acquire,  any shares of the Company Common Stock.
Stockholder  has sole  voting  power and sole power to issue  instructions  with
respect to the matters  set forth in  Sections 5, 7 and 8 hereof,  sole power of
disposition, sole power of conversion, sole power to demand appraisal rights and
sole power to agree to all of the matters set forth in this  Agreement,  in each
case  with  respect  to  all  of  the  Existing   Shares  with  no  limitations,
qualifications or restrictions on such rights,  subject to applicable securities
laws and the terms of this Agreement.

         (b) Power; Binding Agreement. Stockholder has the legal capacity, power
and authority to enter into and perform all of Stockholder's  obligations  under
this Agreement.  This Agreement has been duly and validly executed and delivered
by Stockholder  and  constitutes a valid and binding  agreement of  Stockholder,
enforceable  against  Stockholder  in accordance  with its terms except that (i)
such  enforcement may be subject to applicable  bankruptcy,  insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific  performance  and  injunctive and other forms of
equitable  relief may be subject to equitable  defenses and to the discretion of
the court before which any proceeding therefor may be brought.

         (c) No Conflicts.  Except as contemplated by the Merger  Agreement,  no
filing with, and no permit, authorization,  consent or approval of, any state or
federal  public body or authority  ("Governmental  Entity") is necessary for the
execution of this Agreement by Stockholder  and the  consummation by Stockholder
of the transactions  contemplated  hereby, none of the execution and delivery of
this  Agreement  by  Stockholder,   the   consummation  by  Stockholder  of  the
transactions  contemplated  hereby or compliance by Stockholder  with any of the
provisions  hereof  shall  (i)  conflict  with or  result  in any  breach of any
organizational  documents applicable to Stockholder,  (ii) result in a violation
or breach of, or constitute  (with or without notice or lapse of time or both) a
default  (or give rise to any third party  right of  termination,  cancellation,
material  modification or  acceleration)  under any of the terms,  conditions or
provisions of any note,  loan agreement,  bond,  mortgage,  indenture,  license,
contract, commitment, arrangement,  understanding, agreement or other instrument
or  obligation  of  any  kind  to  which  Stockholder  is a  party  or by  which
Stockholder  or any of its  properties or assets may be bound,  or (iii) violate
any  order,  writ,  injunction,   decree,  judgment,  order,  statute,  rule  or
regulation  applicable  to  Stockholder  or any of  Stockholder's  properties or
assets, except in the case of clauses (ii) and (iii) where the failure to obtain
such permits, authorizations,  consents or approvals or to make such filings, or
where such  violations,  breaches or defaults would not,  individually or in the
aggregate,  materially  impair the  ability  of  Stockholder  or the  Company to
consummate the transactions contemplated by the Merger Agreement, this Agreement
or by the other Ancillary Agreements.

         (d) No Encumbrance. Except as permitted by this Agreement, the Existing
Shares are now and, at all times during the term hereof, and the Securities will
be,  held by  Stockholder,  or by a nominee  or  custodian  for the  benefit  of
Stockholder,  free and clear of all mortgages,  claims, charges, liens, security
interests,   pledges  or  options,   proxies,   voting  trusts  or   agreements,
understandings or arrangements or any other rights whatsoever  ("Encumbrances"),
except for any such Encumbrances arising hereunder.

         (e) No Finder's Fees. No broker, investment banker, financial advisor



                                       2
<PAGE>

or other person is entitled to any broker's,  finder's,  financial  adviser's or
other similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder.

         (f) Reliance by Parent.  Stockholder  understands and acknowledges that
Parent is entering into, and causing Sub to enter into, the Merger  Agreement in
reliance upon Stockholder's execution and delivery of this Agreement.

         Section 3.  Representations  And  Warranties of Parent And Sub. Each of
Parent and Sub  hereby,  jointly  and  severally,  represents  and  warrants  to
Stockholder as follows:

         (a) Power;  Binding  Agreement.  Parent and Sub each has the  corporate
power and authority to enter into and perform all of its obligations  under this
Agreement.  This  Agreement has been duly and validly  executed and delivered by
each of Parent and Sub and  constitutes a valid and binding  agreement of Parent
and Sub,  enforceable  against  each of Parent  and Sub in  accordance  with its
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency  or  other  similar  laws,  now or  hereafter  in  effect,  affecting
creditors'  rights  generally,  and (ii) the remedy of specific  performance and
injunctive  and other  forms of  equitable  relief may be  subject to  equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

         (b) No Conflicts.  Except as contemplated by the Merger  Agreement,  no
filing  with,  and  no  permit,  authorization,  consent  or  approval  of,  any
Governmental  Entity is necessary for the execution of this  Agreement by Parent
and Sub and the consummation by Parent and Sub of the transactions  contemplated
hereby,  and none of the  execution  and  delivery of this  Agreement by each of
Parent and Sub, the  consummation by each of Parent and Sub of the  transactions
contemplated  hereby or  compliance  by each of  Parent  and Sub with any of the
provisions  hereof  shall  (i)  conflict  with or  result  in any  breach of any
provision of the respective  certificates of  incorporation or by-laws of Parent
and Sub,  (ii) require any filing  with,  or permit,  authorization,  consent or
approval of, any Governmental  Entity, (iii) result in a violation or breach of,
or  constitute  (with or without  due notice or lapse of time or both) a default
(or give rise to any right of termination,  cancellation or acceleration) under,
any of the terms, conditions or provisions of any material note, bond, mortgage,
indenture, license, lease, contract, agreement or other instrument or obligation
to which Parent or any of its Subsidiaries is a party or by which any of them or
any of their properties or assets may be bound or (iv) violate any order,  writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets, except in the case of clauses
(ii),  (iii) and (iv) where the failure to obtain such permits,  authorizations,
consents  or  approvals  or to make  such  filings,  or where  such  violations,
breaches or defaults would not,  individually  or in the  aggregate,  materially
impair the ability of Parent or Sub to consummate the transactions  contemplated
by the Merger Agreement, this Agreement or by the other Ancillary Agreements.

         Section 4.  Disclosure.  Stockholder  hereby agrees to permit Parent to
publish   and   disclose   in  the   Registration   Statement   and  the   Proxy
Statement/Prospectus  (including  all  documents  and  schedules  filed with the
Securities and Exchange  Commission),  and any press release or other disclosure
document  which  Parent,  in its sole  discretion  determines to be necessary or
desirable in connection with the Merger and any  transactions  related  thereto,
Stockholder's  identity and ownership of the Company Common Stock and the nature
of  Stockholder's  commitments,   arrangements  and  understandings  under  this
Agreement.

         Section 5. Transfer And Other Restrictions. Prior to the termination



                                       3
<PAGE>

of this Agreement, Stockholder agrees not to, directly or indirectly:

                  (i)  except  pursuant  to the terms of the  Merger  Agreement,
         offer for sale, sell, transfer,  tender,  pledge,  encumber,  assign or
         otherwise  dispose  of,  or enter  into any  contract,  option or other
         arrangement  or  understanding  with respect to or consent to the offer
         for sale, sale, transfer,  tender, pledge,  encumbrance,  assignment or
         other  disposition  of any or all  of the  Securities  or any  interest
         therein except as provided in Section 6 hereof;

                  (ii) grant any proxy,  power of  attorney,  deposit any of the
         Securities  into a voting  trust or enter  into a voting  agreement  or
         arrangement  with respect to the Securities  except as provided in this
         Agreement; or

                  (iii) take any other action that would make any representation
         or warranty of Stockholder contained herein untrue or incorrect or have
         the effect of preventing or disabling  Stockholder  from performing its
         obligations under this Agreement.

         Section 6.  Voting of the  Company  Common  Stock.  Stockholder  hereby
agrees  that,  during the period  commencing  on the date hereof and  continuing
until the first to occur of (a) the Effective  Time or (b)  termination  of this
Agreement  in  accordance  with its terms,  at any  meeting  (whether  annual or
special and whether or not an adjourned or postponed  meeting) of the holders of
the Company  Common Stock,  however  called,  or in connection  with any written
consent of the holders of the Company Common Stock,  Stockholder  will appear at
the meeting or otherwise  cause the Securities to be counted as present  thereat
for purposes of  establishing a quorum and vote or consent (or cause to be voted
or consented) the Securities:

                  (A) in favor of the adoption of the Merger  Agreement  and the
         approval of other actions contemplated by the Merger Agreement and this
         Agreement and any actions required in furtherance thereof and hereof;

                  (B) against  any action or  agreement  that would  result in a
         breach in any respect of any  covenant,  representation  or warranty or
         any other  obligation  or  agreement  of the  Company  under the Merger
         Agreement or this Agreement; and

         Stockholder may not enter into any agreement or understanding  with any
person  the  effect of which  would be  inconsistent  with or  violative  of any
provision contained in this Section 6.

         Section 7. Proxy.

         (a) Stockholder hereby irrevocably grants to, and appoints,  Parent and
Bernard  J.  Cassidy,  Joseph  C.  Consul,  or any of them in  their  respective
capacities as officers of Parent and any individual who shall hereafter  succeed
to any such office of Parent and each of them  individually,  such Stockholder's
proxy and  attorney-in-fact  (with full power of  substitution),  for and in the
name, place and stead of Stockholder, to vote the Securities, or grant a consent
or approval in respect of the Securities,  in connection with any meeting of the
stockholders of the Company, as specified in Section 6 hereof.

         (b) Stockholder  represents that any other proxies  heretofore given in
respect of the Existing  Shares are not  irrevocable,  and that such proxies are
hereby revoked.

                                       4
<PAGE>

         (c) Stockholder  understands and  acknowledges  that Parent is entering
into the Merger  Agreement in reliance  upon such  Stockholder's  execution  and
delivery of this  Agreement.  Stockholder  hereby  affirms that the  irrevocable
proxy set forth in this Section 7 is given in  connection  with the execution of
the Merger  Agreement,  and that such  irrevocable  proxy is given to secure the
performance  of the  duties of  Stockholder  under this  Agreement.  Stockholder
hereby further  affirms that the  irrevocable  proxy is coupled with an interest
and may not be revoked under any circumstances.  Stockholder hereby ratifies and
confirms all that such irrevocable  proxy may lawfully do or cause to be done by
virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable
in  accordance  with the  provisions  of  section  212(e)  of  Delaware  General
Corporation Law.

         Section 8. Stop Transfer; Legend.

         (a) Stockholder  agrees with, and covenants to, Parent that Stockholder
will  not  request  that  the  Company  register  the  transfer  (book-entry  or
otherwise) of any certificate or uncertificated interest representing any of the
Securities, unless such transfer is made in compliance with this Agreement.

         (b) In the event of a stock dividend or distribution,  or any change in
the  Company   Common  Stock  by  reason  of  any  stock   dividend,   split-up,
recapitalization, combination, exchange of share or the like other than pursuant
to the Merger, the term "Existing Shares" will be deemed to refer to and include
the shares of the Company  Common Stock as well as all such stock  dividends and
distributions  and  any  shares  into  which  or  for  which  any  or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.

         (c)  Stockholder  will promptly after the date hereof  surrender to the
Company all certificates representing the Securities, the Company will place the
following  legend on such  certificates in addition to any other legend required
thereof:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
     ON TRANSFER PURSUANT TO AND OTHER PROVISIONS OF A VOTING  AGREEMENT,  DATED
     AS OF NOVEMBER  18, 1999,  BY AND AMONG  TUMBLEWEED  COMMUNICATIONS  CORP.,
     KEYHOLE ACQUISITION CORP. AND [STOCKHOLDER]."

         Section 9. Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement,  each of the parties hereto agrees to use its reasonable best
efforts to take,  or cause to be taken,  all actions,  and to do, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations to consummate and make effective the  transactions  contemplated  by
this Agreement and the Merger Agreement.  Each party shall promptly consult with
the other and provide any necessary information and material with respect to all
filings made by such party with any Governmental  Entity in connection with this
Agreement and the Merger Agreement and the transactions  contemplated hereby and
thereby.

         Section 10. Termination. This Agreement shall terminate on the earliest
of (a) termination of the Merger Agreement pursuant to Section 7.1(a),  (b), (c)
or (e) thereof, (b) six months following the termination of the Merger Agreement
pursuant to Section  7.1(d) or (f)  thereof,  (c) the  agreement  of the parties
hereto to terminate this Agreement, or (d) the consummation of the Merger.

         Section 11. Miscellaneous.

         (a) Entire  Agreement.  This  Agreement  (including  the  documents and
instruments  referred to herein) constitutes the entire agreement and



                                       5
<PAGE>


supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.

         (b)  Successors and Assigns.  This  Agreement  shall not be assigned by
operation of law or  otherwise  without the prior  written  consent of the other
parties hereto.  This Agreement  shall be binding upon,  inure to the benefit of
and  be   enforceable  by  each  party  and  such  party's   respective   heirs,
beneficiaries, executors, representatives and permitted assigns.

         (c)  Amendment  and  Modification.  This  Agreement may not be amended,
altered,  supplemented  or  otherwise  modified  or  terminated  except upon the
execution and delivery of a written agreement executed by the parties hereto.

         (d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally,  telecopied (which is
confirmed)  or sent by an  overnight  courier  service,  such as  FedEx,  to the
parties at the  following  addresses  (or at such other  address  for a party as
shall be specified by like notice):

         If to Parent or Sub, to:

                  Tumbleweed Communications Corp.
                  700 Saginaw Drive
                  Redwood City, CA 94063
                  Attention: Jeffrey C. Smith
                  Telephone No.: 650-216-2010
                  Facsimile No.:  650-216-2001

         with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  525 University Avenue, Suite 220
                  Palo Alto, California 94301
                  Telephone: (650) 470-4500
                  Telecopy No.: (650) 470-4570
                  Attention: Gregory C. Smith

         If to Stockholder, to:

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

         with a copy to:

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


         (e) Severability. Any term or provision of this Agreement which is held
to be  invalid,  illegal or  unenforceable  in any  respect in any  jurisdiction
shall, as to that jurisdiction,  be ineffective to the extent of such invalidity
or  unenforceability  without  rendering  invalid or unenforceable the remaining
terms  and   provisions   of  this   Agreement  or  affecting  the  validity  or
enforceability  of any of the terms or provisions of this Agreement in any other
jurisdiction.  If  any  provision  of  this  Agreement  is  so  broad  as  to be
unenforceable,  the  provision  shall be  interpreted  to be only so broad as is
enforceable.

                                       6
<PAGE>

         (f) Specific  Performance.  Each of the parties  hereto  recognizes and
acknowledges  a breach by it of any  covenants or  agreements  contained in this
Agreement  will cause the other party to sustain  damages for which it would not
have an adequate remedy at law for money, damages, and therefore in the event of
any such breach the aggrieved party shall be entitled to the remedy of specified
performance of such covenants and agreements and injunctive and other  equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.

         (g) No Waiver.  The failure of any party  hereto to exercise any right,
power or remedy provided under this Agreement or otherwise  available in respect
hereof at law or in equity,  or to insist  upon  compliance  by any other  party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, will not constitute a waiver by such party of
its right to exercise any such or other right, power or remedy or to demand such
compliance.

         (h) No Third Party  Beneficiaries.  This  Agreement  is not intended to
confer  upon any person  other than the  parties  hereto any rights or  remedies
hereunder.

         (i) Governing  Law. This  Agreement  shall be governed and construed in
accordance with the laws of the State of Delaware,  without giving effect to the
principles of conflict of law thereof.

         (j) Descriptive  Heading.  The descriptive headings used herein are for
reference  purposes  only  and  will  not  affect  in any  way  the  meaning  or
interpretation of this Agreement.

         (k) Expenses.  All costs and expenses  incurred in connection with this
Agreement and the  transactions  contemplated  hereby shall be paid by the party
incurring such expenses.

         (l) Further Assurances. From time to time, at any other party's request
and without further  consideration,  each party hereto shall execute and deliver
such  additional  documents  and take all such further  lawful  action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.

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

         IN WITNESS  WHEREOF,  Parent,  Sub,  and  Stockholder  have caused this
Agreement to be duly executed as of the day and year first written above.


                         Tumbleweed Communications Corp.

                        By: _________________________________________
                            Name: Jeffrey C. Smith
                            Title: Chief Executive Officer



                        Keyhole Acquisition Corp.

                        By: _________________________________________




                                       7
<PAGE>


                            Name: Jeffrey C. Smith
                            Title: Chief Executive Officer



                        By: _________________________________________
                                 [Stockholder]*


- ---------------
* In the event this agreement covers shares held jointly or held individually by
related  parties who will sign this together,  each joint or related party shall
sign.


                                       8
<PAGE>


                                                                       EXHIBIT B

November ___, 1999



[TO COME]

Dear [__]:

         As  you  know,  Tumbleweed  Communications  Corp.  (the  "Company")  is
acquiring  Worldtalk  Communications  Corporation  ("Worldtalk")  as  part of an
Agreement and Plan of Merger (the "Merger").  In connection with the Merger, the
Company is pleased to extend this offer of  employment  to you. We believe  that
you will find  working  for the  Company to be a  rewarding  experience,  and we
anticipate that you will  contribute to the Company's  continued  success.  This
Offer  Letter and the  attached  Restrictive  Covenants  set forth the terms and
conditions of the Company's offer of employment to you. Please sign and return a
copy of this Offer  Letter and the  Restrictive  Covenants,  by November , 1999,
indicating your acceptance.

         Effective  as of the  Merger,  which is  scheduled  to take place on or
about  February 1, 2000,  the Company will employ you as  [_________].  You will
report  to  [_________].   Your  employment  with  the  Company  is  an  at-will
relationship,  meaning  that  either  you  or the  Company  may  terminate  this
employment relationship at any time and for any reason or no reason.

         Through  [_________],  you will earn a salary based on an annual salary
of  $[_________]  ("Annual  Salary"),  payable in accordance  with the Company's
regular payroll  practices and subject to all applicable  withholdings.  Through
[_________],  you will  receive  bonuses in the amount of  $[_________],  on the
following basis: [_________].  Additionally, you will be entitled to participate
in all benefit plans offered by the Company to employees at your level.

         The Company will also pay you severance  and a completion  bonus on the
following  terms. In the event the Company  terminates  your employment  without
cause on or before  [_________],  the  Company  will pay you as  severance a sum
equivalent to  [_________]  months of Annual  Salary,  subject to all applicable
withholdings.  Should the Company terminate your employment without cause at any
time after  [_________],  the  Company  will


                                       1
<PAGE>


pay you a severance  equivalent to [_________] months of Annual Salary,  subject
to all applicable withholdings.  (The foregoing reference to "cause" merely sets
forth the conditions  under which the Company is obligated to pay you severance,
and does not affect or alter the at-will employment  relationship.) In the event
that you voluntarily terminate your employment with the Company, you will not be
entitled  to  any  severance  pay.  Furthermore,  the  Company  will  pay  you a
completion  bonus  of  $[_________],  subject  to all  applicable  withholdings,
provided that: you are an employee of the Company on [_________].

         In  consideration  for your employment  with the Company,  you agree to
perform your duties as  [_________]  and to comply with the terms and conditions
of the Restrictive Covenants. You further acknowledge that prior to signing this
Offer Letter, you have read and understood this Offer Letter and the Restrictive
Covenants,  and you  have  had  the  opportunity  to  consult  with an  attorney
regarding your legal obligations hereunder.


Agreed and Accepted:


_______________________________



Tumbleweed Communications Corp.


By: ____________________________
    [Name]
    [Title]



                              RESTRICTIVE COVENANTS

         THESE  RESTRICTIVE  COVENANTS are entered into as of November , 1999 by
and between Tumbleweed Communications Corp. (the "Company") and [_________] (the
"Employee"), and concurrently herewith the Offer Letter dated November [ ], 1999
(collectively, this "Agreement").

         WHEREAS,  the Company desires to employ the Employee as [_________] and
the Employee desires to be employed by the Company;

         WHEREAS,  the Company is engaged in the  business  of on-line  document
delivery  systems  (the  "Business")  and the Employee  acknowledges  the highly
competitive nature of the Business;

         NOW THEREFORE,  in  consideration  of the mutual covenants set forth in
this  Agreement and other good and valuable  consideration,  the  sufficiency of
which is hereby acknowledged, the Company and the Employee agree as follows:

         1. TERM. The Employee agrees to comply with the  restrictive  covenants
set forth in Sections 2, 3 and 4 of this Agreement through December 31, 2000.

         2. NONSOLICITATION. The Employee shall not, directly or indirectly, (A)
solicit,  induce,  or  attempt to  solicit  or induce  any  customers,  clients,
vendors,  suppliers  or  consultants  of the  Company,  or any of the  Company's
subsidiaries,  affiliates,  successors  or



                                       2
<PAGE>


assigns,  engaged in the Business (a  "Customer")  to terminate  his, her or its
relationship with the Company or any of the Company's subsidiaries,  affiliates,
successors or assigns for any purpose, including the purpose of associating with
or  becoming  a  customer  or  client  of, or  consultant  to,  (whether  or not
exclusive)  of the  Employee or any entity of which the Employee is or becomes a
partner,   shareholder,   officer,  director,   principal,   agent,  trustee  or
consultant,  or (B) otherwise  solicit,  induce, or attempt to solicit or induce
any such Customer to terminate his, her or its relationship  with the Company or
any of the  Company's  subsidiaries,  affiliates,  successors or assigns for any
other purpose or no purpose.

         3. NONINTERFERENCE. The Employee shall not, directly or indirectly, (A)
solicit,  induce,  or attempt  to  solicit  or induce  any  person  known to the
Employee to be an agent,  employee or  independent  contractor of the Company or
any of the Company's  subsidiaries,  affiliates,  successors or assigns, that is
involved in the Business (each such person,  a "Company  Person"),  to terminate
his or her  employment  or other  relationship  with the  Company  or any of the
Company's  subsidiaries,  affiliates,  successors  or assigns for the purpose of
associating  with (i) any entity of which the Employee is or becomes an officer,
director,  partner,  shareholder,  agent,  trustee  or  consultant  or (ii)  any
competitor  of the  Company or any of the  Company's  subsidiaries,  affiliates,
successors  or assigns in the Business,  or (B) otherwise  encourage any Company
Person to terminate his or her employment or other relationship with the Company
or any of the Company's subsidiaries,  affiliates, successors or assigns for any
other purpose or no purpose.

         4.  NONCOMPETITION.  The  Employee  shall not  directly or  indirectly,
anywhere in the United States, (A) engage in the Business for the Employee's own
account;  (B) enter the employ of, or render any services involving the Business
for the following  companies or their  subsidiaries,  affiliates,  successors or
assigns (each an "Entity"):  [_________];  and (C) become interested in any such
Entity  in any  capacity,  including  as an  individual,  partner,  shareholder,
officer, director,  principal, agent, trustee or consultant;  provided, however,
the Employee may own,  directly or indirectly,  solely as a passive  investment,
securities of any corporation if the Employee, individually or in the aggregate,
is not a  controlling  Person of, or a member of a group  which  controls,  such
corporation and does not, directly or indirectly, "beneficially own" (as defined
in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, without regard
to the 60 day period referred to in Rule 13d-3(d)(1)(i)) 2% or more of any class
of securities of such corporation.

         5. RIGHTS AND  REMEDIES  UPON  BREACH.  If the  Employee  breaches,  or
threatens  to commit a breach of the  Agreement,  the  Company or the  Company's
subsidiaries,  affiliates, successors or assigns shall have the following rights
and  remedies,  each of which shall be  independent  of the others and severally
enforceable,  and each of which shall be in addition to, and not in lieu of, any
other rights or remedies available to the Company or the Company's subsidiaries,
affiliates, successors or assigns at law or in equity:

                  a. SPECIFIC PERFORMANCE. The right and remedy to have each and
every one of the provisions of the Agreement specifically enforced and the right
and  remedy to obtain  injunctive  relief,  it being  agreed  that any breach or
threatened  breach  of any of  the  provisions  of  the  Agreement  would  cause
irreparable  injury to the Company or the  Company's  subsidiaries,  affiliates,
successors  or  assigns,  and that money  damages  would not provide an adequate
remedy to the Company or the Company's subsidiaries,  affiliates,  successors or
assigns.

                  b. ACCOUNTING. The right and remedy to require the Employee to
account  for  and  pay  over  to  the  Company  or the  Company's  subsidiaries,
affiliates,  successors  or  assigns,  as the  case  may be,  all  compensation,
profits, monies,  accruals,  increments or other benefits derived or received by
the



                                       3
<PAGE>


Employee that results from any transaction or activity  constituting a breach of
any of the provisions of the Agreement.

                  c. SEVERABILITY. The Employee acknowledges and agrees that the
covenants in this Agreement are  reasonable in geographic,  temporal and subject
matter scope and in all other respects,  and do not impose  limitations  greater
than are necessary to protect the goodwill and other  business  interests of the
Company and the Company's subsidiaries,  affiliates,  successors or assigns. If,
however, any court of competent  jurisdiction  subsequently  determines that the
covenants  in this  Agreement,  or any part  thereof,  or any other part of this
Agreement, are invalid or unenforceable,  the remainder of the covenants in this
Agreement,  and the remainder of this  Agreement,  shall not thereby be affected
and shall be given full effect without regard to the invalid portions.

                  d.  BLUE-PENCILING.  If any  court of  competent  jurisdiction
determines  that any  provision  of this  Agreement,  or any part  thereof,  are
unenforceable because of the geographic, temporal and subject matter scope, such
court shall have the power to reduce the geographic, temporal and subject matter
scope of such  provision,  as the case may be, and, in its  reduced  form,  such
provision  shall  then  be  enforceable  to  the  maximum  extent  permitted  by
applicable law.

                  e.  ENFORCEABILITY IN ALL JURISDICTIONS.  The Employee intends
to and  hereby  confers  jurisdiction  to  enforce  each  and  every  one of the
provisions  of the  Agreement  upon the  courts of any  jurisdiction  within the
geographic  scope  of  Agreement.  If the  courts  of any  one or  more  of such
jurisdictions  hold the provisions of the Agreement  unenforceable  by reason of
the breadth of such scope or  otherwise,  it is the  intention of Employee  that
such  determination  shall not bar or in any way  affect  the  Company's  or the
Company's  subsidiaries',  affiliates',  successors'  or  assigns'  right to the
relief  provided  above in the  courts  of any  other  jurisdiction  within  the
geographic  scope of the  provisions  of the  Agreement,  as to breaches of such
provisions  of the  Agreement  in  such  other  respective  jurisdictions,  such
provisions of the Agreement as they relate to each jurisdiction  being, for this
purpose, severable into diverse and independent covenants.

         6. ENTIRE  AGREEMENT/MODIFICATION.  The Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and shall
supersede any and all previous contracts, arrangements or understandings between
the parties hereto with respect to the subject matter hereof.  The Agreement may
not be modified or amended  except by an instrument in writing signed by each of
the parties hereto.

         7. GOVERNING LAW. This Agreement  shall be governed by and construed in
accordance  with the laws of the  State of  California,  without  regard  to its
conflict of law rules.

         8.  DISPUTE  RESOLUTION.  Except  as  otherwise  provided  herein or as
necessary to  specifically  enforce,  or enjoin the breach of, the Agreement (to
the extent such remedies are otherwise available),  any dispute arising under or
relating to the  Agreement  shall be finally  settled by one  arbiter  under the
then-existing   Commercial   Arbitration  Rules  of  the  American   Arbitration
Association in arbitration  proceedings conducted in San Jose,  California.  The
arbitrator  shall  have no power or  authority  in making  his award to  modify,
enlarge or add to the terms and provisions of the Agreement.  Judgement upon the
award of the arbiter shall be binding upon the parties and may be entered in any
court  having  jurisdiction.  The arbiter  shall award to the  prevailing  party
reasonable  attorneys'  fees and expenses  from the other party,  including  any
expert fees,  which fees and  expenses  shall be in addition to any other relief
which may be awarded.

         IN WITNESS WHEREOF, the parties have executed the Agreement as of the



                                       4
<PAGE>


date set forth above.



Agreed and Accepted:


_______________________________



Tumbleweed Communications Corp.


By: ____________________________
    [Name]
    [Title]



                                       5
<PAGE>


                                                                       EXHIBIT C


                             STOCK OPTION AGREEMENT

         STOCK  OPTION  AGREEMENT  (the  "Agreement"),  dated as of November 18,
1999, by and between  Tumbleweed  Communications  Corp., a Delaware  corporation
("Parent"),  and Worldtalk  Communications  Corporation,  a Delaware corporation
(the "Company").


                                   WITNESSETH:

         WHEREAS,   concurrently   with  the  execution  and  delivery  of  this
Agreement,  the  Company,  Parent  and  Keyhole  Acquisition  Corp.,  a Delaware
corporation ("Sub"), are entering into an Agreement and Plan of Merger, dated as
of the date hereof (the "Merger  Agreement"),  which provides that,  among other
things, upon the terms and subject to the conditions thereof, Sub will be merged
with and into the Company (the  "Merger"),  with the Company  continuing  as the
surviving corporation; and

         WHEREAS, as a condition and inducement to Parent's willingness to enter
into the Merger  Agreement,  Parent has required that the Company agree, and the
Company  has so  agreed,  to grant to Parent an option  with  respect to certain
shares of the Company's  authorized  but unissued  common stock on the terms and
subject to the conditions set forth herein.

         NOW,  THEREFORE,  to induce  Parent  and Sub to enter  into the  Merger
Agreement and in consideration of the representations, warranties, covenants and
agreements  set forth  herein and in the Merger  Agreement,  the parties  hereto
intending to be legally bound,  hereby agree as follows.  Capitalized terms used
herein but not defined  herein  shall have the  meanings set forth in the Merger
Agreement.



                                       1
<PAGE>


         1. GRANT OF OPTION.  The Company  hereby grants  Parent an  irrevocable
option (the  "Option")  to purchase a number of shares (the  "Shares") of common
stock,  par value $0.01 per share,  of the Company (the "Company  Common Stock")
equal to the Option Number (as defined hereinafter), on the terms and subject to
the conditions set forth below.

         2. EXERCISE OF OPTION.

                  (a)  Exercise.  At any time or from time to time  prior to the
termination of the Option granted hereunder in accordance with the terms of this
Agreement,  Parent (or a wholly-owned subsidiary of Parent designated by Parent)
may exercise the Option, in whole or in part, if on or after the date hereof:

                  (i)   any   corporation,   partnership,   individual,   trust,
         unincorporated  association, or other entity or "person" (as defined in
         Section  13(d)(3) of the  Securities  Exchange Act of 1934,  as amended
         (the "Exchange  Act")) other than Parent or any of its "affiliates" (as
         defined in the Exchange Act) (a "Third Party"), shall have:

                                    (A)  commenced  or announced an intention to
         commence a bona fide tender  offer or exchange  offer for any shares of
         Company  Common  Stock,  the  consummation  of which  would  result  in
         "beneficial  ownership"  (as defined  under Rule 13d-3 of the  Exchange
         Act)  by such  Third  Party  (together  with  all  such  Third  Party's
         affiliates  and  "associates"  (as such term is defined in the Exchange
         Act)) of 20% or more of the then voting  equity of the Company  (either
         on a primary or a fully diluted basis);

                                    (B) filed a  Notification  and  Report  Form
         under the  Hart-Scott-Rodino  Antitrust  Improvements  Act of 1976,  as
         amended (the "HSR Act"), reflecting an intent to acquire the Company or
         any assets or securities of the Company;

                                    (C) solicited  "proxies" in a "solicitation"
         subject to the proxy rules under the Exchange Act, executed any written
         consent or become a "participant" in any  "solicitation" (as such terms
         are defined in  Regulation  14A under the Exchange  Act),  in each case
         with respect to the Company Common Stock; or

                  (ii) the  events  described  in  Section  7.2(b) of the Merger
         Agreement  that  would  require  the  Company to pay Parent the fee set
         forth therein (but without the  necessity of Parent  having  terminated
         the Merger Agreement).

                  (iii) Each of the  events  described  in clauses  (i) and (ii)
         hereof  shall be referred  to herein as a "Trigger  Event." The Company
         shall  notify  Parent  promptly  in  writing of the  occurrence  of any
         Trigger  Event;  however,  such notice  shall not be a condition to the
         right of Parent to exercise the Option.

                  (b) Exercise Procedure. In the event Parent wishes to exercise
the Option,  Parent shall deliver to the Company a written  notice (an "Exercise
Notice") specifying the total number of the Shares it wishes to purchase. To the
extent  permitted by law and the Certificate of Incorporation of the Company and
provided  that the  conditions  set  forth in  Section  3  hereof  to  Company's
obligation  to issue the  Shares  to Parent  hereunder  have been  satisfied  or
waived,  Parent shall,  upon  delivery of the Exercise  Notice and tender of the
applicable  aggregate Exercise Price,  immediately be deemed to be the holder of
record of the shares of the Company  Common Stock  issuable upon such  exercise,
notwithstanding  that the stock  transfer  books of the  Company  shall  then be
closed or that certificates representing such shares of the Company Common Stock
shall not



                                       2
<PAGE>

heretofore  have been  delivered  to Parent.  Each  closing of a purchase of the
Shares (a "Closing")  shall occur at a place, on a date and at a time designated
by Parent in an Exercise  Notice  delivered at least two business  days prior to
the date of the Closing.

                  (c) Termination of the Option. The Option shall terminate upon
the earlier of: (i) the Effective Time of the Merger;  and (ii) the  termination
of the Merger Agreement pursuant to Section 7.1(a), (b), (c) or (e) thereof; and
(iii) six (6) months following the termination of the Merger Agreement  pursuant
to Section 7.1(d) or (f) thereof.  Notwithstanding the foregoing,  if the Option
cannot be exercised by reason of any applicable judgment,  decree, order, law or
regulation,  the Option shall remain  exercisable  and shall not terminate until
the earlier of (x) the date on which such impediment  shall become final and not
subject to appeal,  and (y) 5:00 p.m. Pacific Standard Time, on the tenth (10th)
business day after such impediment shall have been removed. The rights of Parent
set forth in Sections 7 and 8 shall not terminate  upon  termination of Parent's
right to exercise  the  Option,  but shall  extend to the time  provided in such
sections.  Notwithstanding  the  termination  of the  Option,  Parent  shall  be
entitled to  purchase  the shares of the Company  Common  Stock with  respect to
which Parent had exercised the Option prior to such termination.

                  (d) Option Number.  The "Option Number" shall initially be the
number of shares equal to nineteen and nine-tenths  percent (19.9%) of the total
number of shares of the Company  Common Stock issued and  outstanding  as of the
date of this  Agreement,  and shall be adjusted  hereafter to reflect changes in
the Company's  capitalization occurring after the date hereof in accordance with
Section 9 hereof.  Notwithstanding any other provision of this Agreement,  in no
event shall the Option Number exceed nineteen and nine-tenths percent (19.9%) of
the total number of shares of the Company Common Stock issued and outstanding as
of the date of this Agreement, adjusted in accordance with Section 9 hereof.

                  (e)  Exercise  Price.  The  purchase  price  per  share of the
Company  Common Stock  pursuant to the Option (the  "Exercise  Price")  shall be
$10.527

         3.  CONDITIONS TO CLOSING.  The  obligation of the Company to issue the
Shares to Parent  hereunder  is subject to the  conditions  that (i) all waiting
periods, if any, under the HSR Act, applicable to the issuance of the Shares and
the  acquisition of such shares by Parent  hereunder  shall have expired or have
been terminated;  (ii) all consents,  approvals, orders or authorizations of, or
registrations,  declarations  or  filings  with,  any  federal,  state  or local
administrative agency or commission or other federal state or local governmental
authority or  instrumentality,  if any, required in connection with the issuance
of the Shares and the acquisition of such shares by Parent  hereunder shall have
been obtained or made, as the case may be; and (iii) no preliminary or permanent
injunction or other order by any court of competent jurisdiction  prohibiting or
otherwise restraining such issuance shall be in effect.

         4. CLOSING. At any Closing,

                  (a) the Company shall  deliver to Parent a single  certificate
in definitive form representing the number of the Shares designated by Parent in
its Exercise Notice, such certificate to be registered in the name of Parent and
to bear the legend set forth in Section 12 hereof;

                  (b) Parent shall  deliver to the Company the  aggregate  price
for the Shares so designated and being purchased by wire transfer of immediately
available funds to the account or accounts specified in writing by the Company;



                                       3
<PAGE>

                  (c)  the  Company  shall  pay  all  expenses,  and any and all
federal,  state  and  local  taxes  and other  charges  that may be  payable  in
connection with the preparation,  issue and delivery of stock certificates under
this Section 4; and

                  (d) the Company  shall cause the shares of the Company  Common
Stock being  delivered at the Closing to be approved for quotation on the Nasdaq
National  Market and shall pay all expenses in connection  with the  application
for approval of such quotation. At any Closing at which Parent is exercising the
Option in part,  Parent  shall  present  and  surrender  this  Agreement  to the
Company,  and the Company shall deliver to Parent an executed new agreement with
the same terms as this  Agreement  evincing the right to purchase the balance of
the shares of the Company Common Stock purchasable hereunder.

         5.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company
represents and warrants to Parent that:

                  (a) the  Company  is a  corporation  duly  organized,  validly
existing  and in good  standing  under the laws of the State of Delaware and has
the corporate  power and authority to enter into this Agreement and to carry out
its obligations hereunder;

                  (b)  the  execution  and  delivery  of this  Agreement  by the
Company and the  consummation  by the Company of the  transactions  contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize  this Agreement or any of the  transactions  contemplated
hereby;

                  (c) this Agreement has been duly executed and delivered by the
Company and  constitutes  a valid and binding  obligation  of the Company,  and,
assuming this Agreement constitutes a valid and binding obligation of Parent, is
enforceable  against  the  Company  in  accordance  with its  terms,  except  as
enforceability  may be limited by bankruptcy and other laws affecting the rights
and remedies of creditors generally and general principles of equity;

                  (d) the Company has taken all  necessary  corporate  action to
authorize  and reserve for issuance and to permit it to issue,  upon exercise of
the Option,  and at all times from the date hereof through the expiration of the
Option will have  reserved a number of  authorized  and  unissued  shares of the
Company Common Stock not less than the Option Number,  such amount being subject
to  adjustment  as  provided  in  Section 11  hereof,  all of which,  upon their
issuance and delivery in accordance  with the terms of this  Agreement,  will be
validly issued, fully paid and nonassessable;

                  (e) upon delivery of the Shares to Parent upon the exercise of
the Option,  Parent will acquire the Shares free and clear of all claims, liens,
charges, encumbrances and security interests of any nature whatsoever;

                  (f)  the  execution  and  delivery  of this  Agreement  by the
Company does not, and the performance of this Agreement by the Company will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse  of  time,  or both)  under,  or give  rise to a right of  termination,
cancellation  or  acceleration of any obligation or the loss of a benefit under,
or the creation of a lien,  pledge,  security  interest or other  encumbrance on
assets pursuant to (any such conflict, violation, default, right of termination,
cancellation  or  acceleration,  loss  or  creation,  a  "Violation"),  (A)  any
provision of the Certificate of Incorporation,  or Bylaws, of the Company or (B)
any provisions of any mortgage,  indenture,  lease, contract or other agreement,
instrument,



                                       4
<PAGE>


permit,  concession,  franchise, or license or (C) any judgment,  order, decree,
statute,  law,  ordinance,  rule or regulation  applicable to the Company or its
properties or assets,  which  Violation,  in the case of each of clauses (B) and
(C), would have a material adverse effect on the Company;

                  (g)  except for the  expiration  or early  termination  of the
waiting  period  under the HSR Act and except as  contemplated  by Section  8(b)
hereof and may be required  under the  Securities  Act of 1933,  as amended (the
"Securities  Act"),  the execution and delivery of this Agreement by the Company
does not, and the performance of this Agreement by the Company will not, require
any  consent,   approval,   authorization  or  permit  of,  or  filing  with  or
notification to, any governmental or regulatory authority; and

                  (h) none of the  Company  or any of its  affiliates  or anyone
acting on its or their  behalf has issued,  sold or offered any  security of the
Company  to any  person or  entity  under  circumstances  that  would  cause the
issuance and sale of shares of the Company Common Stock  hereunder to be subject
to the registration  requirements of the Securities Act as in effect on the date
hereof,  and, assuming the representations and warranties of Parent contained in
Section 6(f) are true and correct, the issuance, sale and delivery of the shares
of the Company Common Stock hereunder would be exempt from the  registration and
prospectus delivery requirements of the Securities Act, as in effect on the date
hereof,  and the  Company  shall  not take any  action  which  would  cause  the
issuance, sale, and delivery of shares of the Company Common Stock hereunder not
to be exempt from such requirements.

         6.  REPRESENTATIONS  AND  WARRANTIES OF PARENT.  Parent  represents and
warrants to the Company that:

                  (a) Parent is a corporation  duly organized,  validly existing
and in good  standing  under  the  laws of the  State  of  Delaware  and has the
corporate  power and authority to enter into this Agreement and to carry out its
obligations hereunder;

                  (b) the execution and delivery of this Agreement by Parent and
the  consummation by Parent of the  transactions  contemplated  hereby have been
duly authorized by all necessary  corporate  action on the part of Parent and no
other  corporate  proceedings  on the part of Parent are  necessary to authorize
this Agreement or any of the transactions contemplated hereby;

                  (c) this  Agreement  has been duly  executed and  delivered by
Parent and constitutes a valid and binding  obligation of Parent,  and, assuming
this  Agreement  constitutes a valid and binding  obligation of the Company,  is
enforceable   against   Parent  in   accordance   with  its  terms,   except  as
enforceability  may be limited by bankruptcy and other laws affecting the rights
and remedies of creditors generally and general principles of equity;

                  (d) the  execution  and  delivery of this  Agreement by Parent
does not, and the  performance of this  Agreement by Parent will not,  result in
any Violation pursuant to, (A) any provision of the Certificate of Incorporation
or By-laws of Parent,  (B) any  provisions  of any mortgage,  indenture,  lease,
contract or other  agreement,  instrument,  permit,  concession,  franchise,  or
license or (C) any judgment,  order, decree,  statute,  law, ordinance,  rule or
regulation applicable to Parent or its properties or assets, which Violation, in
the case of each of clauses (B) and (C), would have a material adverse effect on
Parent;

                  (e)  except for the  expiration  or early  termination  of the
waiting  period  under the HSR Act and except as  contemplated  by Section  8(b)
hereof and as may be  required  under the  Securities  Act,  the  execution  and



                                       5
<PAGE>

delivery of this  Agreement  by Parent  does not,  and the  performance  of this
Agreement by Parent will not,  require any consent,  approval,  authorization or
permit of, or filing with or  notification  to, any  governmental  or regulatory
authority;

                  (f) any shares of the Company  Common Stock acquired by Parent
upon  exercise of the Option will be acquired  for  Parent's  own  account,  for
investment purposes only and will not be, and the Option is not being,  acquired
by Parent with a view to the public  distribution  thereof,  in violation of any
applicable provision of the Securities Act.

            7.  CERTAIN REPURCHASES.

                  (a)  Parent  Put.  At any time  during  which  the  Option  is
exercisable pursuant to Section 2 hereof (the "Repurchase Period") provided that
the Company shall have  consummated an Alternative  Transaction,  upon demand by
Parent,  Parent  shall have the right to sell to the Company  (or any  successor
entity thereof) and the Company (or such successor entity) shall be obligated to
repurchase  from Parent (the  "Put"),  all or any portion of the Option,  at the
price set forth in  subparagraph  (i) below, or all or any portion of the Shares
purchased by Parent pursuant to the exercise of the Option, at a price set forth
in subparagraph (ii) below:

                  (i) The difference between the "Market/Tender Offer Price" for
         shares of the Company  Common Stock as of the date (the "Notice  Date")
         notice of exercise of the Put, is given to the Company  (defined as the
         higher  of (A) the  price  per  share  offered  as of the  Notice  Date
         pursuant  to  any  tender  or  exchange  offer  or  other   Alternative
         Transaction (as defined in the Merger  Agreement)  which was made prior
         to the Notice Date and not  terminated  or  withdrawn  as of the Notice
         Date (the "Tender  Price") and (B) the average of the closing prices of
         shares of the Company  Common Stock on the Nasdaq  National  Market for
         the ten  trading  days  immediately  preceding  the Notice  Date,  (the
         "Market Price")),  and the Exercise Price,  multiplied by the number of
         the Shares purchasable  pursuant to the Option (or portion thereof with
         respect to which Parent is exercising its rights under this Section 7),
         but only if the Market/Tender  Offer Price is greater than the Exercise
         Price.  For purposes of determining the highest price offered  pursuant
         to any Alternative  Transaction which involves consideration other than
         cash, the value of such  consideration  shall be equal to the higher of
         (x)  if  securities  of  the  same  class  of  the  proponent  as  such
         consideration are traded on any national  securities exchange or by any
         registered  securities  association,  a value based on the closing sale
         price or asked price for such  securities  on their  principal  trading
         market on such date and (y) the value ascribed to such consideration by
         the proponent of such Alternative  Transaction,  or if no such value is
         ascribed,  a value  determined in reasonable good faith by the Board of
         Directors of the Company.

                  (ii) The Exercise Price paid by Parent for the Shares acquired
         pursuant to the exercise of the Option plus the difference  between the
         Market/Tender  Offer  Price  and the  Exercise  Price,  but only if the
         Market/Tender   Offer  Price  is  greater  than  the  Exercise   Price,
         multiplied by the number of the Shares so purchased.

                  (iii) For  purposes  of clauses  (i) and (ii) of this  Section
         7(a),  the Tender  Price shall be the highest  price per share  offered
         pursuant to a tender or exchange offer or other Alternative Transaction
         during the Repurchase Period.



                                       6
<PAGE>

                  (b) Payment  and  Redelivery  of the Option or Shares.  In the
event  Parent  exercises  its rights  under this  Section 7, the Company  shall,
within ten business days of the Notice Date,  pay the required  amount to Parent
in  immediately  available  funds and Parent shall  surrender to the Company the
Option or the  certificates  evidencing the Shares  purchased by Parent pursuant
thereto,  and Parent shall warrant that it owns such shares and that such shares
are then free and clear of all liens,  claims,  charges and  encumbrances of any
kind or nature whatsoever.

         8. REGISTRATION RIGHTS.

                  (a)  Following  the  termination  of the Merger  Agreement and
exercise  of the  Option,  Parent may by written  notice  request the Company to
register  for  resale  under the  Securities  Act all or any part of the  Shares
beneficially owned by Parent (the "Registrable  Securities").  The Company shall
use its  reasonable  best  efforts to effect,  as promptly as  practicable,  the
registration under the Securities Act of the Registrable  Securities;  provided,
however,  that (i) Parent shall not be entitled to demand more than an aggregate
of two (2) effective  registration  statements  hereunder,  and (ii) the Company
will not be required to file any such  registration  statement during any period
of time (not to exceed  sixty (60) days after such request in the case of clause
(A) below or ninety (90) days after such  request in the case of clauses (B) and
(C) below) when (A) the  Registrant  is in  possession  of  material  non-public
information which it reasonably believes would be detrimental to be disclosed at
such time and, in the opinion of counsel to the Company,  such information would
be required to be disclosed if a registration statement were filed at that time;
(B) the  Company  is  required  under  the  Securities  Act to  include  audited
financial  statements  for any period in such  registration  statement  and such
financial  statements  are not yet available for inclusion in such  registration
statement; or (C) the Company determines,  in its reasonable judgment, that such
registration   would   interfere  with  any  financing,   acquisition  or  other
transaction  involving the Company or any of its material  subsidiaries and that
such transaction is material to the Registrant and its  subsidiaries  taken as a
whole.

                  (b) The Company shall use its reasonable best efforts to cause
any Registrable Securities registered pursuant to this Section 8 to be qualified
for sale under the securities or Blue Sky laws of such  jurisdictions  as Parent
may reasonably  request and shall continue such registration or qualification in
effect in such jurisdiction;  provided,  however,  that the Company shall not be
required to qualify to do business in, or consent to general  service of process
in, any jurisdiction by reason of this provision.

                  (c) The  registration  rights set forth in this  Section 8 are
subject to the  condition  that  Parent  shall  provide  the  Company  with such
information  with  respect  to its  Registrable  Securities,  the  plans for the
distribution  thereof, and such other information with respect to the Parent as,
in the  reasonable  judgment of counsel for the Company,  is necessary to enable
the  Registrant to include in such  registration  statement  all material  facts
required to be disclosed with respect to a registration thereunder.

                  (d) A  registration  effected  under  this  Section 8 shall be
effected  at the  Company's  expense,  except  for  underwriting  discounts  and
commissions  and the fees and the  expenses  of counsel to the  Parent,  and the
Registrant  shall  provide to the  underwriters  such  documentation  (including
certificates,  opinions of counsel and  "comfort"  letters from  auditors) as is
customary in connection with underwritten  public offerings as such underwriters
may reasonably require.

                  (e) In connection with any registration effected under



                                       7
<PAGE>


this  Section  8,  the  parties  agree  (i) to  indemnify  each  other  and  the
underwriters,   if  any,  in  the  customary  manner,  (ii)  to  enter  into  an
underwriting  agreement in form and substance customary for transactions of such
type with the underwriters  participating in such offering, if any, and (iii) to
take all further  actions  which shall be  reasonably  necessary  to effect such
registration and sale (including if the managing underwriter deems it necessary,
participating in road-show presentations).

         9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

                  (a) In the event of any change in the Company  Common Stock by
reason  of  stock  dividends,   splitups,   mergers  (other  than  the  Merger),
recapitalizations,  combinations,  exchange of shares or the like,  the type and
number of shares or securities subject to the Option, and the purchase price per
share  provided in Section 2(e)  hereof,  shall be adjusted  appropriately,  and
proper  provision shall be made in the agreements  governing such transaction so
that Parent shall receive,  upon exercise of the Option, the number and class of
shares or other  securities  or  property  that  Parent  would have  received in
respect of the Company Common Stock if the Option had been exercised immediately
prior to such event or the record date therefor, as applicable.

                  (b) In the event that the Company shall enter in an agreement:
(i) to  consolidate  with or merge into any person,  other than Parent or one of
its  Subsidiaries,  and shall not be the continuing or surviving  corporation of
such  consolidation or merger;  (ii) to permit any person,  other than Parent or
one of its Subsidiaries,  to merge into the Company and the Company shall be the
continuing or surviving  corporation,  but, in connection with such merger,  the
then-outstanding  shares of the Company  Common  Stock shall be changed  into or
exchanged  for stock or other  securities  of the Company or any other person or
cash or any other property or the outstanding shares of the Company Common Stock
immediately prior to such merger shall after such merger represent less than 50%
of the outstanding shares and share equivalents of the merged company;  or (iii)
to sell or  otherwise  transfer  all or  substantially  all of its assets to any
person,  other than Parent or one of its  Subsidiaries,  then,  and in each such
case, the agreement  governing such transaction  shall make proper provisions so
that  upon the  consummation  of any such  transaction  and upon the  terms  and
conditions  set forth  herein,  Parent  shall  receive  for each the Share  with
respect to which the Option has not been exercised an amount of consideration in
the form of and equal to the per share  amount of  consideration  that  would be
received  by the  holder  of one  share of the  Company  Common  Stock  less the
Exercise  Price (and,  in the event of an election or similar  arrangement  with
respect  to the type of  consideration  to be  received  by the  holders  of the
Company Common Stock,  subject to the foregoing,  proper provision shall be made
so that the holder of the Option would have the same election or similar  rights
as would the  holder of the  number of shares of the  Company  Common  Stock for
which the Option is then exercisable).

         10. LIMITATION OF PARENT PROFIT.

                  (a) Notwithstanding any other provision of this Agreement,  in
no event shall  Parent's  Total  Profit (as defined  below)  exceed  $6,000,000,
including in such amount the fees payable under the provisions of Section 7.2(b)
of the Merger  Agreement,  and, if Parent's Total Profit shall otherwise  exceed
such amount, Parent, at its sole election, shall either (i) reduce the number of
shares of Company  Common  Stock  subject to this  Option,  (ii)  deliver to the
Company for  cancellation  Shares  previously  purchased by Parent (valued,  for
purposes of this Section  10(a) at the average  closing sales price per share of
Company  Common  Stock  (or if there is no sale on such  date  then the  average
between  the closing bid and ask prices on any such day) as quoted on the Nasdaq
National Market based on published  financial sources for the twenty consecutive
trading



                                       8
<PAGE>

days preceding the day on which Parent's Total Profit exceeds $6,000,000,  (iii)
pay cash to the Company,  or (iv) any  combination  thereof,  such that Parent's
actually  realized  Total Profit shall not exceed  $6,000,000  after taking into
account the foregoing actions.

                  (b) As used  herein,  the term "Total  Profit"  shall mean the
amount (before taxes) of the following:  (a) the aggregate  amount of (i)(x) the
net cash amounts received by Parent or its permitted designees or any affiliated
party  pursuant  to the sale of Shares (or any other  securities  into which the
Option is converted or  exchanged) to any  unaffiliated  party or to the Company
pursuant  to this  Agreement,  less  (y)  Parent's  or its  permitted  designees
purchase  price of such  Shares,  (ii) any  amounts  received  by  Parent or its
permitted  designees or any  affiliated  party on the transfer of the Option (or
any portion  thereof) to any  unaffiliated  party or to the Company  pursuant to
this  Agreement,  and (iii) any amounts  received by Parent  pursuant to Section
7.2(b) of the Merger Agreement; minus (b) the amount of cash theretofore paid to
the Company pursuant to this Section 10 plus the value of the Shares theretofore
delivered to the Company for cancellation pursuant to this Section 10.

         11. RESTRICTIVE  LEGENDS.  Each certificate  representing shares of the
Company  Common  Stock  issued to  Parent  hereunder  shall  include a legend in
substantially the following form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND MAY BE REOFFERED OR SOLD ONLY
IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

         It is  understood  and  agreed  that (i) the  reference  to the  resale
restrictions of the Securities Act and state  securities or Blue Sky laws in the
foregoing  legend  shall be removed by  delivery  of  substitute  certificate(s)
without such reference if Parent shall have delivered to the Company a copy of a
letter from the staff of the Securities and Exchange  Commission,  or an opinion
of counsel, in form and substance reasonably satisfactory to the Company, to the
effect that such legend is not required for  purposes of the  Securities  Act or
such  laws;  (ii) the  reference  to the  provisions  of this  Agreement  in the
foregoing  legend  shall be removed by  delivery  of  substitute  certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the  provisions  of this  Agreement  and  under  circumstances  that do not
require the retention of such  reference;  and (iii) the legend shall be removed
in its entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied.  In addition, such certificates shall bear any other legend as may be
required by law.  Certificates  representing  shares sold in a registered public
offering  pursuant  to  Section 8 shall not be  required  to bear the legend set
forth in this Section 11.

         12. BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and  permitted  assigns.  Except as expressly  provided  for in this  Agreement,
neither this Agreement nor the rights or the  obligations of either party hereto
are  assignable,  except by operation of law, or with the written consent of the
other  party.  Nothing  contained  in this  Agreement,  express or  implied,  is
intended  to confer  upon any  person  other than the  parties  hereto and their
respective  permitted assigns any rights or remedies of any nature whatsoever by
reason of this Agreement.

         13. SPECIFIC  PERFORMANCE.  The parties recognize and agree that if for
any  reason  any of the  provisions  of  this  Agreement  are not  performed  in
accordance  with their specific terms or are otherwise  breached,  immediate and
irreparable  harm or injury would be caused for which money damages would not be
an adequate  remedy.  Accordingly,  each party agrees that, in addition to other
remedies,  the other party shall be entitled to



                                       9
<PAGE>

an  injunction   restraining  any  violation  or  threatened  violation  of  the
provisions of this Agreement.  In the event that any action should be brought in
equity to enforce the provisions of this  Agreement,  neither party will allege,
and each party hereby waives the defense, that there is adequate remedy at law.

         14. ENTIRE AGREEMENT.  This Agreement,  the Merger  Agreement,  and the
other  Ancillary  Agreements  constitute the entire  agreement among the parties
with  respect  to the  subject  matter  hereof  and  supersede  all other  prior
agreements and  understandings,  both written and oral, among the parties or any
of them with respect to the subject matter hereof.

         15.  FURTHER  ASSURANCE.  Each party will  execute and deliver all such
further  documents and  instruments  and take all such further  action as may be
necessary in order to consummate the transactions contemplated hereby.

         16. VALIDITY.  The invalidity or  unenforceability  of any provision of
this  Agreement  shall not affect the  validity or  enforceability  of the other
provisions of this  Agreement,  which shall remain in full force and effect.  In
the event any court or other  competent  authority  holds any  provision of this
Agreement to be null, void or unenforceable,  the parties hereto shall negotiate
in good faith the  execution  and delivery of an amendment to this  Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such  provision.  Each party agrees
that,  should any court or other competent  authority hold any provision of this
Agreement or part hereof to be null, void or  unenforceable,  or order any party
to take any  action  inconsistent  herewith,  or not take  any  action  required
herein,  the other party shall not be entitled to specific  performance  of such
provision or part hereof or to any other  remedy,  including  but not limited to
money damages,  for breach hereof or of any other provision of this Agreement or
part hereof as the result of such holding or order.

         17.  NOTICES.  Any  notice  or  communication   required  or  permitted
hereunder shall be in writing and either  delivered  personally,  telegraphed or
telecopied or sent by certified or registered mail,  postage prepaid,  and shall
be  deemed  to be  given,  dated  and  received  when so  delivered  personally,
telegraphed  or telecopied  or, if mailed,  five business days after the date of
mailing to the following  address or facsimile  number, or to such other address
or  addresses  as  such  person  may  subsequently  designate  by  notice  given
hereunder.

                  (a) if to Parent, to:

                  Tumbleweed Communications Corp.
                  700 Saginaw Drive
                  Redwood City, CA 94063
                  Attention: Jeffrey C. Smith
                  Telephone No.: 650-216-2010
                  Facsimile No.:  650-216-2001

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  525 University Avenue - Suite 220
                  Palo Alto, California 94301
                  Attention:  Gregory C. Smith
                  Telephone No.:  650-470-4500
                  Facsimile No.:  650-470-4590

                  (b) if to the Company, to:



                                       10
<PAGE>

                  Worldtalk Communications Corporation
                  5155 Old Ironsides Drive
                  Santa Clara, CA 95054
                  Attention: James Heisch
                  Telephone No.: 408-567-5012
                  Facsimile No.: 408-567-5122

                  with a copy to:

                  Fenwick & West LLP
                  Two Palo Alto Square
                  Palo Alto, California  94306
                  Attention:  Gordon K. Davidson
                  Telephone No.:  650-494-0600
                  Facsimile No.:  650-494-1417


         18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware,  without giving effect to the
principles of conflicts of law thereof.

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

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

         21. EXPENSES.  Except as otherwise  expressly provided herein or in the
Merger  Agreement,  all costs  and  expenses  incurred  in  connection  with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.

         22.  AMENDMENTS;  WAIVER.  This Agreement may be amended by the parties
hereto and the terms and  conditions  hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto,  or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.

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


                      Worldtalk Communications Corporation

                      By:___________________________________
                         Name: James Heisch
                         Title: Vice President, CFO


                         Tumbleweed Communications Corp.

                      By:___________________________________
                         Name: Jeffrey C. Smith
                         Title: Chief Executive Officer


                                       11
<PAGE>

                                                                       EXHIBIT D

                                VOTING AGREEMENT

         VOTING AGREEMENT (this "Agreement"),  dated as of November 18, 1999, by
and  between  Worldtalk  Communications   Corporation,  a  Delaware  corporation
("Company"), and [Stockholder] ("Stockholder").


                                   WITNESSETH:

         WHEREAS,   immediately  prior  to  the  execution  of  this  Agreement,
Tumbleweed  Communications  Corp., a Delaware  corporation  ("Parent"),  Keyhole
Acquisition  Corp., a Delaware  corporation and a direct wholly owned subsidiary
of Parent  ("Sub") and the Company have  entered  into an Agreement  and Plan of
Merger of even date  herewith  (the "Merger  Agreement"),  pursuant to which the
parties  thereto have agreed,  upon the terms and subject to the  conditions set
forth therein, to merge Sub with and into the Company (the "Merger"); and

         WHEREAS,  as  of  the  date  hereof,  Stockholder  is  the  record  and
Beneficial  Owner (as defined  hereinafter)  of  _________  Existing  Shares (as
defined  hereinafter)  of the common  stock,  $0.001 par value,  of Parent  (the
"Parent Common Stock"); and

         WHEREAS,  as  inducement  and a condition  to entering  into the Merger
Agreement,  the Company has required  Stockholder to agree,  and Stockholder has
agreed, to enter into this Agreement.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
promises,  representations,   warranties,  covenants  and  agreements  contained
herein,  the parties  hereto,  intending to be legally  bound  hereby,  agree as
follows:

         Section  1.  Certain  Definitions.  In  addition  to the terms  defined
elsewhere  herein,  capitalized  terms  used  and not  defined  herein  have the
respective  meanings ascribed to them in the Merger  Agreement.  For purposes of
this Agreement:

         (a)  "Beneficially  Own" or "Beneficial  Ownership" with respect to any
securities means having "beneficial  ownership" of such securities as determined
pursuant to Rule 13d-3 under the  Securities  Exchange  Act of 1934,  as amended
(the "Exchange Act"). Without duplicative counting of the same securities by the
same  holder,  securities  Beneficially  Owned  by a person  include  securities
Beneficially Owned by all other persons with whom such person would constitute a
"group"  within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.

         (b)  "Existing   Shares"  means  shares  of  the  Parent  Common  Stock
Beneficially Owned by Stockholder as of the date hereof.

         (c) "Securities"  means the Existing Shares together with any shares of
the  Parent  Common  Stock  or  other  securities  of the  Company  acquired  by
Stockholder in any capacity  after the date hereof and prior to the  termination
of this Agreement whether upon the exercise of options,


                                       1
<PAGE>

warrants or rights,  the conversion or exchange of  convertible or  exchangeable
securities,  or  by  means  of  purchase,  dividend,   distribution,   split-up,
recapitalization,  combination,  exchange of shares or the like, gift,  bequest,
inheritance or as a successor in interest in any capacity or otherwise.

         Section 2.  Representations And Warranties of Stockholder.  Stockholder
represents and warrants to Parent and Sub as follows:

         (a) Ownership of Shares.  Stockholder is the sole record and Beneficial
Owner of (i) the Existing  Shares,  (ii) options to purchase  [_____]  shares of
Parent  Common  Stock and (iii)  warrants to purchase  [_____]  shares of Parent
Common Stock.  On the date hereof,  the Existing  Shares  constitute  all of the
shares of the  Parent  Common  Stock  owned of record or  Beneficially  Owned by
Stockholder.  There are no  outstanding  options or other rights to acquire from
Stockholder or  obligations of Stockholder to sell or to acquire,  any shares of
the Parent  Common  Stock.  Stockholder  has sole voting power and sole power to
issue  instructions with respect to the matters set forth in Sections 5, 7 and 8
hereof,  sole  power of  disposition,  sole power of  conversion,  sole power to
demand  appraisal rights and sole power to agree to all of the matters set forth
in this Agreement,  in each case with respect to all of the Existing Shares with
no  limitations,  qualifications  or  restrictions  on such  rights,  subject to
applicable securities laws and the terms of this Agreement.

         (b) Power; Binding Agreement. Stockholder has the legal capacity, power
and authority to enter into and perform all of Stockholder's  obligations  under
this Agreement.  This Agreement has been duly and validly executed and delivered
by Stockholder  and  constitutes a valid and binding  agreement of  Stockholder,
enforceable  against  Stockholder  in accordance  with its terms except that (i)
such  enforcement may be subject to applicable  bankruptcy,  insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific  performance  and  injunctive and other forms of
equitable  relief may be subject to equitable  defenses and to the discretion of
the court before which any proceeding therefor may be brought.

         (c) No Conflicts.  Except as contemplated by the Merger  Agreement,  no
filing with, and no permit, authorization,  consent or approval of, any state or
federal  public body or authority  ("Governmental  Entity") is necessary for the
execution of this Agreement by Stockholder  and the  consummation by Stockholder
of the transactions  contemplated  hereby, none of the execution and delivery of
this  Agreement  by  Stockholder,   the   consummation  by  Stockholder  of  the
transactions  contemplated  hereby or compliance by Stockholder  with any of the
provisions  hereof  shall  (i)  conflict  with or  result  in any  breach of any
organizational  documents applicable to Stockholder,  (ii) result in a violation
or breach of, or constitute  (with or without notice or lapse of time or both) a
default  (or give rise to any third party  right of  termination,  cancellation,
material  modification or  acceleration)  under any of the terms,  conditions or
provisions of any note,  loan agreement,  bond,  mortgage,  indenture,  license,
contract, commitment, arrangement,  understanding, agreement or other instrument
or  obligation  of  any  kind  to  which  Stockholder  is a  party  or by  which
Stockholder  or any of its  properties or assets may be bound,  or (iii) violate
any  order,  writ,  injunction,   decree,  judgment,  order,  statute,  rule  or
regulation  applicable  to  Stockholder  or any of  Stockholder's  properties or
assets except, in the case of clauses (ii) and (iii) where the failure to obtain
such permits, authorizations,  consents or approvals or to make such filings, or
where such  violations,  breaches or defaults would not,  individually or in the
aggregate,  materially impair the ability of Stockholder or Parent to consummate
the transactions  contemplated by the Merger Agreement, this Agreement or by the
other Ancillary Agreements.

         (d) No Encumbrance. Except as permitted by this Agreement, the



                                       2
<PAGE>



Existing  Shares  are now and,  at all times  during  the term  hereof,  and the
Securities  will be, held by  Stockholder,  or by a nominee or custodian for the
benefit of Stockholder, free and clear of all mortgages, claims, charges, liens,
security interests,  pledges or options,  proxies,  voting trusts or agreements,
understandings or arrangements or any other rights whatsoever  ("Encumbrances"),
except for any such Encumbrances arising hereunder.

         (e) No Finder's Fees. No broker,  investment banker,  financial advisor
or other person is entitled to any broker's,  finder's,  financial  adviser's or
other similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder.

         (f) Reliance by the Company.  Stockholder  understands and acknowledges
that the  Company  is  entering  into the  Merger  Agreement  in  reliance  upon
Stockholder's execution and delivery of this Agreement.

         Section 3.  Representations And Warranties of the Company.  The Company
hereby represents and warrants to Stockholder as follows:

         (a) Power;  Binding Agreement.  The Company has the corporate power and
authority to enter into and perform all of its obligations under this Agreement.
This  Agreement has been duly and validly  executed and delivered by the Company
and  constitutes  a valid and  binding  agreement  of the  Company,  enforceable
against  the  Company  in  accordance  with  its  terms,  except  that  (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect,  affecting  creditors' rights  generally,  and
(ii) the  remedy of  specific  performance  and  injunctive  and other  forms of
equitable  relief may be subject to equitable  defenses and to the discretion of
the court before which any proceeding therefor may be brought.

         (b) No Conflicts.  Except as contemplated by the Merger  Agreement,  no
filing  with,  and  no  permit,  authorization,  consent  or  approval  of,  any
Governmental  Entity is necessary  for the  execution  of this  Agreement by the
Company and the  consummation  by the Company of the  transactions  contemplated
hereby, and none of the execution and delivery of this Agreement by the Company,
the  consummation  by the  Company of the  transactions  contemplated  hereby or
compliance by the Company with any of the  provisions  hereof shall (i) conflict
with  or  result  in  any  breach  of  any  provision  of  the   certificate  of
incorporation or by-laws or similar  organizational  documents of the Company or
of  any  of  its  Subsidiaries,   (ii)  require  any  filing  with,  or  permit,
authorization,  consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute  (with or without due notice or lapse of
time or both) a default  (or give rise to any right of  termination,  amendment,
cancellation or  acceleration or result in the creation of any lien) under,  any
of the terms,  conditions or provisions of any Company Agreement or (iv) violate
any order, writ, injunction,  decree,  statute, rule or regulation applicable to
the  Company,  any of its  Subsidiaries  or any of their  properties  or assets,
except in the case of clause  (ii),  (iii) or (iv)  where the  failure to obtain
such permits, authorizations,  consents or approvals or to make such filings, or
where such  violations,  breaches or defaults would not,  individually or in the
aggregate,  have a material adverse effect on the Company and its  Subsidiaries,
taken as a whole,  and will not materially  impair the ability of the Company to
consummate the transactions contemplated the Merger Agreement, this Agreement or
by the other Ancillary Agreements.

         Section 4. Disclosure.  Stockholder hereby agrees to permit the Company
to  publish  and  disclose  in  the   Registration   Statement   and  the  Proxy
Statement/Prospectus  (including  all  documents  and  schedules  filed with the
Securities and Exchange  Commission),  and any press release or other



                                       3
<PAGE>


disclosure document which the Company, in its sole discretion,  determines to be
necessary  or  desirable  in  connection  with the Merger  and any  transactions
related thereto, Stockholder's identity and ownership of the Parent Common Stock
and the nature of Stockholder's  commitments,  arrangements  and  understandings
under this Agreement.

         Section 5. Transfer And Other Restrictions. Prior to the termination of
this Agreement, Stockholder agrees not to, directly or indirectly:

                  (i)  except  pursuant  to the terms of the  Merger  Agreement,
         offer for sale, sell, transfer,  tender,  pledge,  encumber,  assign or
         otherwise  dispose  of,  or enter  into any  contract,  option or other
         arrangement  or  understanding  with respect to or consent to the offer
         for sale, sale, transfer,  tender, pledge,  encumbrance,  assignment or
         other  disposition  of any or all  of the  Securities  or any  interest
         therein except as provided in Section 6 hereof;

                  (ii) grant any proxy,  power of  attorney,  deposit any of the
         Securities  into a voting  trust or enter  into a voting  agreement  or
         arrangement  with respect to the Securities  except as provided in this
         Agreement; or

                  (iii) take any other action that would make any representation
         or warranty of Stockholder contained herein untrue or incorrect or have
         the effect of preventing or disabling  Stockholder  from performing its
         obligations under this Agreement.

         Section 6. Voting of the Parent Common Stock. Stockholder hereby agrees
that,  during the period  commencing on the date hereof and continuing until the
first to occur of (a) the Effective Time or (b) termination of this Agreement in
accordance  with its  terms,  (i)  Stockholder  will not  sell or  transfer  any
Securities  or any  interest  therein  to any  person,  and (ii) at any  meeting
(whether annual or special and whether or not an adjourned or postponed meeting)
of the holders of the Parent Common Stock, however called, or in connection with
any written consent of the holders of the Parent Common Stock,  Stockholder will
appear at the meeting or otherwise cause the Securities to be counted as present
thereat for purposes of  establishing  a quorum and vote or consent (or cause to
be voted or consented) the Securities:

                  (A) in favor of the adoption of the Merger  Agreement  and the
         approval of other actions contemplated by the Merger Agreement and this
         Agreement and any actions required in furtherance thereof and hereof;

                  (B) against  any action or  agreement  that would  result in a
         breach in any respect of any  covenant,  representation  or warranty or
         any other  obligation  or agreement of Parent,  or Sub under the Merger
         Agreement or this Agreement; and

         Stockholder may not enter into any agreement or understanding  with any
person  the  effect of which  would be  inconsistent  with or  violative  of any
provision contained in this Section 6.

         Section 7. Proxy.

         (a) Stockholder hereby irrevocably grants to, and appoints, the Company
and Paul Hilal,  James A. Heisch, or any of them in their respective  capacities
as officers of the Company and any individual who shall hereafter succeed to any
such  office of the Company and each of them  individually,  such  Stockholder's
proxy and  attorney-in-fact  (with full power of  substitution),  for and in the
name, place and stead of



                                       4
<PAGE>

Stockholder,  to vote the Securities,  or grant a consent or approval in respect
of the Securities, in connection with any meeting of the stockholders of Parent,
as specified in Section 6 hereof.

         (b) Stockholder represents that any proxies heretofore given in respect
of the  Existing  Shares are not  irrevocable,  and that such proxies are hereby
revoked.

         (c)  Stockholder  understands  and  acknowledges  that the  Company  is
entering into the Merger Agreement in reliance upon such Stockholder's execution
and delivery of this Agreement.  Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 7 is given in  connection  with the execution of
the Merger  Agreement,  and that such  irrevocable  proxy is given to secure the
performance  of the  duties of  Stockholder  under this  Agreement.  Stockholder
hereby further  affirms that the  irrevocable  proxy is coupled with an interest
and may not be revoked under any circumstances.  Stockholder hereby ratifies and
confirms all that such irrevocable  proxy may lawfully do or cause to be done by
virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable
in  accordance  with the  provisions  of  section  212(e)  of  Delaware  General
Corporation Law.

         Section 8. Stop Transfer; Legend.

         (a)  Stockholder  agrees  with,  and  covenants  to, the  Company  that
Stockholder  will not request that Parent  register the transfer  (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Securities, unless such transfer is made in compliance with this Agreement.

         (b) In the event of a stock dividend or distribution,  or any change in
the  Parent   Common   Stock  by  reason  of  any  stock   dividend,   split-up,
recapitalization, combination, exchange of share or the like other than pursuant
to the Merger, the term "Existing Shares" will be deemed to refer to and include
the shares of the Parent  Common Stock as well as all such stock  dividends  and
distributions  and  any  shares  into  which  or  for  which  any  or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.

         (c) Stockholder will promptly after the date hereof surrender to Parent
all certificates  representing  the Securities,  Parent will place the following
legend on such certificates in addition to any other legend required thereof:

      "THE   SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE   ARE  SUBJECT  TO
      RESTRICTIONS  ON  TRANSFER  PURSUANT TO AND OTHER  PROVISIONS  OF A VOTING
      AGREEMENT,  DATED AS OF  NOVEMBER  18,  1999,  BY AND  BETWEEN  [___]  AND
      [Stockholder]."

         Section 9. Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement,  each of the parties hereto agrees to use its reasonable best
efforts to take,  or cause to be taken,  all actions,  and to do, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations to consummate and make effective the  transactions  contemplated  by
this Agreement and the Merger Agreement.  Each party shall promptly consult with
the other and provide any necessary information and material with respect to all
filings made by such party with any Governmental  Entity in connection with this
Agreement and the Merger Agreement and the transactions  contemplated hereby and
thereby.

         Section 10. Termination. This Agreement shall terminate on the earliest
of (a) termination of the Merger Agreement pursuant to Section 7.1(a),  (b), (d)
or (f) thereof, (b) six months following the termination of the Merger Agreement
pursuant to Section  7.1(c) or (e)  thereof,  (c) the



                                       5
<PAGE>

agreement  of the  parties  hereto  to  terminate  this  Agreement,  or (d)  the
consummation of the Merger.

         Section 11. Miscellaneous.

         (a) Entire  Agreement.  This  Agreement  (including  the  documents and
instruments  referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings,  both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.

         (b)  Successors and Assigns.  This  Agreement  shall not be assigned by
operation of law or  otherwise  without the prior  written  consent of the other
parties hereto.  This Agreement  shall be binding upon,  inure to the benefit of
and  be   enforceable  by  each  party  and  such  party's   respective   heirs,
beneficiaries, executors, representatives and permitted assigns.

         (c)  Amendment  and  Modification.  This  Agreement may not be amended,
altered,  supplemented  or  otherwise  modified  or  terminated  except upon the
execution and delivery of a written agreement executed by the parties hereto.

         (d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally,  telecopied (which is
confirmed)  or sent by an  overnight  courier  service,  such as  FedEx,  to the
parties at the  following  addresses  (or at such other  address  for a party as
shall be specified by like notice):

      If to the Company, to:

                  Tumbleweed Communications Corp.
                  700 Saginaw Drive
                  Redwood City, CA 94063
                  Attention: Jeffrey C. Smith
                  Telephone No.: 650-216-2010
                  Facsimile No.:  650-216-2001

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  525 University Avenue - Suite 220
                  Palo Alto, California 94301
                  Attention: Gregory C. Smith
                  Telephone No.: 650-470-4500
                  Facsimile No.: 650-470-4590

      If to Stockholder, to:

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

            with a copy to:

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

         (e) Severability. Any term or provision of this Agreement which is held
to be  invalid,  illegal or  unenforceable  in any  respect in any  jurisdiction
shall, as to that jurisdiction,  be ineffective to the extent of such invalidity
or  unenforceability  without  rendering  invalid or



                                       6
<PAGE>

unenforceable  the remaining terms and provisions of this Agreement or affecting
the  validity  or  enforceability  of any of the  terms  or  provisions  of this
Agreement in any other  jurisdiction.  If any provision of this  Agreement is so
broad as to be  unenforceable,  the provision shall be interpreted to be only so
broad as is enforceable.

         (f) Specific  Performance.  Each of the parties  hereto  recognizes and
acknowledges  a breach by it of any  covenants or  agreements  contained in this
Agreement  will cause the other party to sustain  damages for which it would not
have an adequate remedy at law for money, damages, and therefore in the event of
any such breach the aggrieved party shall be entitled to the remedy of specified
performance of such covenants and agreements and injunctive and other  equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.

         (g) No Waiver.  The failure of any party  hereto to exercise any right,
power or remedy provided under this Agreement or otherwise  available in respect
hereof at law or in equity,  or to insist  upon  compliance  by any other  party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, will not constitute a waiver by such party of
its right to exercise any such or other right, power or remedy or to demand such
compliance.

         (h) No Third Party  Beneficiaries.  This  Agreement  is not intended to
confer  upon any person  other than the  parties  hereto any rights or  remedies
hereunder.

         (i) Governing  Law. This  Agreement  shall be governed and construed in
accordance with the laws of the State of Delaware,  without giving effect to the
principles of conflict of law thereof.

         (j) Descriptive  Heading.  The descriptive headings used herein are for
reference  purposes  only  and  will  not  affect  in any  way  the  meaning  or
interpretation of this Agreement.

         (k) Expenses.  All costs and expenses  incurred in connection with this
Agreement and the  transactions  contemplated  hereby shall be paid by the party
incurring such expenses.

         (l) Further Assurances. From time to time, at any other party's request
and without further  consideration,  each party hereto shall execute and deliver
such  additional  documents  and take all such further  lawful  action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.

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

         IN WITNESS  WHEREOF,  the  Company  and  Stockholder  have  caused this
Agreement to be duly executed as of the day and year first written above.



                                     Worldtalk Communications Corporation

                                     By: _______________________________________
                                         Name: [James Heisch]
                                         Title: [Vice President, CFO]



                                       7
<PAGE>

                                     Keyhole Acquisition Corp.

                                     By: _______________________________________
                                         Name: Jeffrey C. Smith
                                         Title: Chief Executive Officer


                                     By: _______________________________________
                                                   [Stockholder]*

- ------------------
* In the event this agreement covers shares held jointly or held individually by
related  parties who will sign this together,  each joint or related party shall
sign.



                                       8
<PAGE>

                                                                       EXHIBIT F


                                    [COMPANY]

                        EMPLOYEE PROPRIETARY INFORMATION
                            AND INVENTIONS AGREEMENT

         In consideration of my employment or continued  employment by [COMPANY]
(the  "COMPANY"),  and the  compensation  now and hereafter paid to me, I hereby
agree as follows:

1. NONDISCLOSURE

         1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during
my employment and thereafter,  I will hold in strictest  confidence and will not
disclose,  use,  lecture  upon  or  publish  any  of the  Company's  Proprietary
Information (defined below),  except as such disclosure,  use or publication may
be required in connection with my work for the Company,  or unless an officer of
the  Company  expressly  authorizes  such in writing.  I will  obtain  Company's
written  approval  before  publishing or submitting for publication any material
(written,  verbal,  or  otherwise)  that  relates to my work at  Company  and/or
incorporates  any  Proprietary  Information.  I hereby assign to the Company any
rights I may have or acquire in such Proprietary  Information and recognize that
all  Proprietary  Information  shall be the sole property of the Company and its
assigns.

         1.2 PROPRIETARY INFORMATION.  The term "PROPRIETARY  INFORMATION" shall
mean any and all confidential and/or proprietary knowledge,  data or information
of  the  Company.  By way  of  illustration  but  not  limitation,  "PROPRIETARY
INFORMATION"  includes  (a)  trade  secrets,   inventions,  mask  works,  ideas,
processes,  formulas,  source and object codes, data,  programs,  other works of
authorship,  know-how,  improvements,  discoveries,



                                       1
<PAGE>


developments,  designs and techniques  (hereinafter  collectively referred to as
"INVENTIONS");  and (b) information  regarding plans for research,  development,
new products,  marketing and selling,  business  plans,  budgets and unpublished
financial statements,  licenses,  prices and costs, suppliers and customers; and
(c) information  regarding the skills and compensation of other employees of the
Company.  Notwithstanding  the  foregoing,  it is  understood  that, at all such
times,  I am free to use  information  which is generally  known in the trade or
industry,  which is not gained as result of a breach of this  Agreement,  and my
own  skill,  knowledge,  know-how  and  experience  to  whatever  extent  and in
whichever way I wish.

         1.3 THIRD  PARTY  INFORMATION.  I  understand,  in  addition,  that the
Company  has  received  and  in the  future  will  receive  from  third  parties
confidential or proprietary information ("THIRD PARTY INFORMATION") subject to a
duty on the Company's part to maintain the  confidentiality  of such information
and  to use it  only  for  certain  limited  purposes.  During  the  term  of my
employment and thereafter,  I will hold Third Party Information in the strictest
confidence  and will not disclose to anyone  (other than Company  personnel  who
need to know such  information in connection with their work for the Company) or
use, except in connection with my work for the Company,  Third Party Information
unless expressly authorized by an officer of the Company in writing.

         1.4 NO  IMPROPER  USE OF  INFORMATION  OF PRIOR  EMPLOYERS  AND OTHERS.
During my  employment by the Company I will not  improperly  use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an  obligation  of  confidentiality,  and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging  to any  former  employer  or  any  other  person  to  whom I have  an
obligation  of  confidentiality  unless  consented  to in writing by that former
employer or person.  I will use in the performance of my duties only information
which is  generally  known and used by  persons  with  training  and  experience
comparable  to my own,  which is common  knowledge  in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.

2.   ASSIGNMENT OF INVENTIONS.

         2.1 PROPRIETARY  RIGHTS.  The term "PROPRIETARY  RIGHTS" shall mean all
trade  secret,  patent,  copyright,  mask work and other  intellectual  property
rights throughout the world.

         2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the  commencement of my employment with the Company are excluded
from the scope of this Agreement.  To preclude any possible uncertainty,  I have
set forth on Exhibit B (Previous  Inventions) attached hereto a complete list of
all Inventions that I have, alone or jointly with others,  conceived,  developed
or  reduced  to  practice  or caused to be  conceived,  developed  or reduced to
practice prior to the  commencement  of my employment  with the Company,  that I
consider to be my property or the  property of third  parties and that I wish to
have  excluded  from the scope of this  Agreement  (collectively  referred to as
"PRIOR INVENTIONS"). If disclosure of any such Prior Invention would cause me to
violate any prior confidentiality  agreement, I understand that I am not to list
such Prior  Inventions  in Exhibit B but am only to disclose a cursory  name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason.  A
space is  provided  on  Exhibit B for such  purpose.  If no such  disclosure  is
attached,  I represent that there are no Prior Inventions.  If, in the course of
my employment  with the Company,  I incorporate a Prior Invention into a Company
product,  process or  machine,  the  Company is hereby  granted and shall have a
nonexclusive,  royalty-free,  irrevocable,  perpetual,  worldwide  license (with
rights to sublicense through multiple



                                       2
<PAGE>


tiers of  sublicensees)  to make,  have  made,  modify,  use and sell such Prior
Invention.  Notwithstanding the foregoing,  I agree that I will not incorporate,
or permit to be incorporated, Prior Inventions in any Company Inventions without
the Company's prior written consent.

         2.3  ASSIGNMENT  OF  INVENTIONS.  Subject to Sections  2.4,  and 2.6, I
hereby  assign and agree to assign in the future  (when any such  Inventions  or
Proprietary  Rights are first  reduced to  practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable  under copyright or similar  statutes,  made or
conceived or reduced to practice or learned by me,  either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company,  or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "COMPANY INVENTIONS."

         2.4  NONASSIGNABLE  INVENTIONS.  This  Agreement  does not  apply to an
Invention which qualifies fully as a nonassignable  Invention under Section 2870
of the California Labor Code  (hereinafter  "SECTION 2870"). I have reviewed the
notification  on Exhibit A (Limited  Exclusion  Notification)  and agree that my
signature acknowledges receipt of the notification.

         2.5  OBLIGATION  TO KEEP  COMPANY  INFORMED.  During  the  period of my
employment and for six (6) months after  termination  of my employment  with the
Company,  I will  promptly  disclose  to the  Company  fully and in writing  all
Inventions  authored,  conceived  or reduced to practice by me,  either alone or
jointly with others.  In addition,  I will promptly  disclose to the Company all
patent  applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any  Inventions  that I believe  fully qualify for  protection  under
Section  2870;  and I will at that time  provide to the  Company in writing  all
evidence  necessary  to  substantiate  that  belief.  The  Company  will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent  any  confidential  information  disclosed  in writing to the Company
pursuant  to this  Agreement  relating  to  Inventions  that  qualify  fully for
protection   under  the   provisions  of  Section  2870.  I  will  preserve  the
confidentiality  of any  Invention  that does not fully  qualify for  protection
under Section 2870.

         2.6  GOVERNMENT  OR THIRD  PARTY.  I also agree to assign all my right,
title and interest in and to any particular  Company Invention to a third party,
including without limitation the United States, as directed by the Company.

         2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me  (solely  or jointly  with  others)  within the scope of my
employment  and which are  protectable  by copyright  are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C., Section 101).

         2.8  ENFORCEMENT  OF PROPRIETARY  RIGHTS.  I will assist the Company in
every proper way to obtain,  and from time to time  enforce,  United  States and
foreign  Proprietary  Rights  relating  to  Company  Inventions  in any  and all
countries.  To that end I will  execute,  verify and deliver such  documents and
perform such other acts (including  appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining,  perfecting,  evidencing,
sustaining and enforcing such Proprietary Rights and the assignment  thereof. In
addition,  I will execute,  verify and deliver  assignments of such  Proprietary
Rights to the Company or its designee.  My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries  shall  continue  beyond the  termination  of my  employment,  but the
Company shall  compensate me at a reasonable  rate after my termination  for the
time actually spent by



                                       3
<PAGE>

me at the Company's request on such assistance.

         In the event the  Company is unable for any  reason,  after  reasonable
effort,  to secure my signature on any document  needed in  connection  with the
actions specified in the preceding paragraph, I hereby irrevocably designate and
appoint the Company and its duly authorized  officers and agents as my agent and
attorney in fact, which appointment is coupled with an interest,  to act for and
in my behalf to execute,  verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding  paragraph with
the same  legal  force  and  effect  as if  executed  by me. I hereby  waive and
quitclaim to the Company any and all claims, of any nature  whatsoever,  which I
now or may hereafter have for  infringement of any  Proprietary  Rights assigned
hereunder to the Company.

3. RECORDS.  I agree to keep and maintain  adequate and current  records (in the
form of notes, sketches,  drawings and in any other form that may be required by
the Company) of all Proprietary  Information  developed by me and all Inventions
made by me during the period of my  employment  at the  Company,  which  records
shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the
Company I will not, without the Company's express written consent, engage in any
employment or business  activity which is competitive  with, or would  otherwise
conflict with, my employment by the Company. I agree further that for the period
of my  employment  by the  Company  and for  one  (l)  year  after  the  date of
termination  of my  employment  by the  Company I will not,  either  directly or
through  others,  solicit  or  attempt  to  solicit  any  employee,  independent
contractor or  consultant  of the company to terminate  his or her  relationship
with the  Company  in order to become an  employee,  consultant  or  independent
contractor to or for any other person or entity.

5. NO CONFLICTING  OBLIGATION.  I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence  information acquired by me in confidence or
in trust prior to my employment by the Company.  I have not entered into,  and I
agree I will not enter into,  any agreement  either  written or oral in conflict
herewith.

6. RETURN OF COMPANY  DOCUMENTS.  When I leave the employ of the Company, I will
deliver to the Company any and all drawings,  notes, memoranda,  specifications,
devices,  formulas,  and documents,  together with all copies  thereof,  and any
other  material  containing or disclosing  any Company  Inventions,  Third Party
Information or Proprietary  Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company,  including
disks and other storage media,  filing  cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice.  Prior to
leaving,  I will  cooperate  with the  Company in  completing  and  signing  the
Company's termination statement.

7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and
because  I may  have  access  to and  become  acquainted  with  the  Proprietary
Information  of the  Company,  the Company  shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable  relief,  without  bond and without  prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

8. NOTICES.  Any notices  required or permitted  hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing.  Such notice shall be deemed given upon personal
delivery to the appropriate  address or if sent by certified or registered mail,
three (3) days after the date of mailing.



                                       4
<PAGE>


9.  NOTIFICATION  OF NEW  EMPLOYER.  In the event that I leave the employ of the
Company,  I hereby consent to the  notification  of my new employer of my rights
and obligations under this Agreement.

10.  GENERAL PROVISIONS.

         10.1 GOVERNING LAW;  CONSENT TO PERSONAL  JURISDICTION.  This Agreement
will  be  governed  by and  construed  according  to the  laws of the  State  of
California,  as such  laws are  applied  to  agreements  entered  into and to be
performed  entirely within California  between  California  residents.  I hereby
expressly  consent to the personal  jurisdiction of the state and federal courts
located in __________ County,  California for any lawsuit filed there against me
by Company arising from or related to this Agreement.

         10.2 SEVERABILITY.  In case any one or more of the provisions contained
in this  Agreement  shall,  for any reason,  be held to be  invalid,  illegal or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect the other  provisions  of this  Agreement,  and this  Agreement
shall be construed as if such invalid,  illegal or  unenforceable  provision had
never been  contained  herein.  If moreover,  any one or more of the  provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration,  geographical scope,  activity or subject, it shall be construed
by limiting and reducing it, so as to be  enforceable  to the extent  compatible
with the applicable law as it shall then appear.

         10.3  SUCCESSORS  AND ASSIGNS.  This  Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.

         10.4  SURVIVAL.  The  provisions  of this  Agreement  shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

         10.5 EMPLOYMENT.  I agree and understand that nothing in this Agreement
shall  confer  any right with  respect  to  continuation  of  employment  by the
Company,  nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without cause.

         10.6 WAIVER.  No waiver by the Company of any breach of this  Agreement
shall be a waiver  of any  preceding  or  succeeding  breach.  No  waiver by the
Company of any right under this Agreement  shall be construed as a waiver of any
other right.  The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.

         10.7 ENTIRE AGREEMENT.  The obligations pursuant to Sections 1 and 2 of
this Agreement  shall apply to any time during which I was previously  employed,
or am in the  future  employed,  by the  Company  as a  consultant  if no  other
agreement governs nondisclosure and assignment of inventions during such period.
This  Agreement is the final,  complete and  exclusive  agreement of the parties
with respect to the subject  matter hereof and  supersedes  and merges all prior
discussions  between us. No modification of or amendment to this Agreement,  nor
any  waiver of any rights  under this  Agreement,  will be  effective  unless in
writing and signed by the party to be charged.  Any subsequent change or changes
in my duties,  salary or  compensation  will not affect the validity or scope of
this Agreement.

         This Agreement  shall be effective as of the first day of my employment
with the Company, namely: _______________, 19__.

         I HAVE READ THIS  AGREEMENT  CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.



                                       5
<PAGE>


Dated:  ___________


______________________________________
(SIGNATURE)


______________________________________
(PRINTED NAME)


ACCEPTED AND AGREED TO:

[COMPANY]


By: ______________________________________________

Title: ___________________________________________

______________________________________________
(Address)



Dated: _______


                                    EXHIBIT A

                         LIMITED EXCLUSION NOTIFICATION


         THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the  foregoing  Agreement  between you and the Company  does not
require you to assign or offer to assign to the Company any  invention  that you
developed  entirely  on your own time  without  using the  Company's  equipment,
supplies,  facilities or trade secret  information  except for those  inventions
that either:

         1. Relate at the time of  conception  or  reduction  to practice of the
invention  to the  Company's  business,  or actual or  demonstrably  anticipated
research or development of the Company;

         2. Result from any work performed by you for the Company.

         To the  extent a  provision  in the  foregoing  Agreement  purports  to
require  you to  assign  an  invention  otherwise  excluded  from the  preceding
paragraph,  the  provision  is against  the  public  policy of this state and is
unenforceable.

         This  limited  exclusion  does not  apply to any  patent  or  invention
covered by a contract  between the  Company and the United  States or any of its
agencies  requiring  full title to such patent or  invention to be in the United
States.

         I ACKNOWLEDGE RECEIPT of a copy of this notification.


                                        By: ____________________________________
                                              (PRINTED NAME OF EMPLOYEE)



                                       6
<PAGE>

                                        Date: __________________________________



      WITNESSED BY:

      ________________________________
      (PRINTED NAME OF REPRESENTATIVE)


                                    EXHIBIT B

TO:       [COMPANY]

FROM:     _____________________

DATE:     _____________________

SUBJECT:  PREVIOUS INVENTIONS

1. Except as listed in Section 2 below,  the following is a complete list of all
inventions or  improvements  relevant to the subject  matter of my employment by
[Company] (the  "COMPANY")  that have been made or conceived or first reduced to
practice  by me alone or  jointly  with  others  prior to my  engagement  by the
Company:


               [ ]    No inventions or improvements.

               [ ]    See below:



____________


____________


____________



[ ]   Additional sheets attached.

      2.  Due to a  prior  confidentiality  agreement,  I  cannot  complete  the
disclosure  under  Section 1 above with respect to  inventions  or  improvements
generally listed below, the proprietary rights and duty of confidentiality  with
respect to which I owe to the following party(ies):

      INVENTION OR IMPROVEMENT          PARTY(IES)        RELATIONSHIP

1.    ____________________________      ______________

2.    ____________________________      ______________

3.    ____________________________      ______________



[ ]   Additional sheets attached.




                                       7
<PAGE>

                                                                       EXHIBIT G



November 18, 1999

Worldtalk Communications Corporation
5155 Old Ironsides Drive
Santa Clara, CA 95054

Tumbleweed Communications Corp.
700 Saginaw Drive
Redwood City, CA 94063

Dear Sirs:

The undersigned has been advised that as of the date hereof he, she or it may be
deemed to be an "affiliate" of Worldtalk Communications  Corporation, a Delaware
corporation  ("Worldtalk")  or of Tumbleweed  Communications  Corp.,  a Delaware
corporation  ("Tumbleweed"),  as  that  term  is  defined  for  purposes  of the
Securities Act of 1933, as amended (the "Securities Act"). Tumbleweed, Worldtalk
and Keyhole Acquisition Corp., a Delaware corporation ("Sub"), have entered into
an  Agreement  and Plan of Merger  dated as of November  18,  1999 (the  "Merger
Agreement").  The Merger Agreement provides,  among other things, for the merger
of Sub with and into Worldtalk (the "Merger") and, in accordance therewith,  the
outstanding  shares of common stock,  par value $.01 per share of Worldtalk (the
"Worldtalk  Common  Stock")  at the  Effective  Time (as  defined  in the Merger
Agreement)  will be converted  into the right to receive shares of Common Stock,
par value $.001 per share of  Tumbleweed  (the  "Tumbleweed  Common  Stock") and
other  rights to acquire  Worldtalk  Common  Stock  whether  options or warrants
(collectively  "Worldtalk  Options")  shall be converted into rights to purchase
Tumbleweed Common Stock  ("Tumbleweed  Options") on the terms set forth therein.
The Worldtalk Common Stock and Worldtalk  Options are  collectively  referred to
herein as the "Worldtalk Securities". The Tumbleweed Common Stock and Tumbleweed
Options are collectively referred to as the "Tumbleweed Securities."

The  undersigned  understands  that  Tumbleweed  has  received a letter from its
independent accountants advising it that the Merger is expected to qualify to be
accounted for as a pooling of interests.  The  undersigned  further  understands
that in order for the  Merger to be  accounted  for as a pooling  of  interests,
affiliates of Tumbleweed  and  Worldtalk  must not reduce their  interests in or
risk  relative to their  ownership  in the  Tumbleweed  Securities  or Worldtalk
Securities  for a certain  time  period  prior to the Merger and for a specified
time  period  following  the Merger.  Tumbleweed  Securities  and the  Worldtalk
Securities are collectively referred to as the "Securities."

As an inducement to Tumbleweed,  Worldtalk and Sub to consummate the Merger, the
undersigned represents, warrants and agrees as follows:

The undersigned will not transfer or reduce the undersigned's risk relative



                                       1
<PAGE>

to the Securities,  including the sale, pledge, exchange or other disposition of
Securities  including  by  reason  of use of any  option,  put,  call  or  other
derivative  right relative to the Securities at any time from and after the date
hereof and until the  undersigned  has been  informed by  Tumbleweed  that,  and
Tumbleweed  will  promptly  notify  the  undersigned  after,  there  has  been a
publication of combined  results of operations of Tumbleweed and Worldtalk (such
results  to cover a period  of at least 30 days  following  the end of the month
during  which the Merger was  consummated,  such  period is  referred  to as the
"Pooling  Period")  within the meaning of Accounting  Series Release No. 135, as
amended, of the Commission, and agrees that each of Tumbleweed and Worldtalk may
issue  stop  transfer  instructions  to its  transfer  agent in  respect  of the
applicable  Securities to enforce the foregoing during the Pooling Period.  This
letter agreement shall terminate  simultaneously  with termination of the Merger
Agreement.

The undersigned also understands that although the undersigned is not prohibited
by the restrictions contained in this letter from exercising options to purchase
Worldtalk  Securities during the Pooling Period, the undersigned may not sell or
otherwise  dispose  of the  shares  of  Company  Common  Stock  acquired  by the
undersigned upon the exercise of such options during the Pooling Period.

The  undersigned  has been  informed  and  understands  that the accuracy of the
representations  and  warranties  and  compliance  with the  covenants set forth
herein will be relied upon by Tumbleweed,  Worldtalk,  their respective counsel,
and shareholders of Tumbleweed and Worldtalk.



Very truly yours,

____________________________
Name:



Accepted this 18th day of November, 1999.



Worldtalk Communications Corporation



By: _____________________
Accepted this 18th day
of November, 1999.



Tumbleweed Communications Corp.


By: _____________________
Accepted this 18th day
of November, 1999.



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<PAGE>


- --------------
*    In  the  event  this  undertaking   covers  shares  held  jointly  or  held
     individually by related parties who will sign this together,  each joint or
     related party shall sign.

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                                                                    EXHIBIT 99.1

        TUMBLEWEED COMMUNICATIONS CORP. TO ACQUIRE WORLDTALK CORPORATION
           Strategic acquisition to solidify business messaging market
                            leadership for Tumbleweed

REDWOOD CITY AND SANTA CLARA, CA - NOVEMBER 18, 1999 - Tumbleweed Communications
Corp.  (NASDAQ:  TMWD),  a leader  in  e-business  communication  services,  and
Worldtalk  Corporation,  (NASDAQ:  WTLK), today jointly announced Tumbleweed has
entered into a definitive  agreement to acquire  Worldtalk.  The  acquisition is
expected to extend  Tumbleweed's  lead in secure  messaging,  one of the fastest
growing  segments of the  messaging  market.  With the  addition  of  Worldtalk,
Tumbleweed  is poised to become a leader in e-mail  content  filtering,  another
rapidly  growing  sector in messaging.  Worldtalk,  which  introduced  its first
e-mail  content  filtering  solution  in 1997,  has grown its 1999  year-to-date
revenue  for this  product  family  more than 180% over the same period in 1998,
from $1.7 million to $4.9 million.

Worldtalk brings to Tumbleweed more than 400 customers, including Chevron, Nike,
Time Warner,  U.S. Dept. of Energy,  Blue Cross,  Glaxo-Wellcome and GE Capital.
Worldtalk's   technologies  will  enhance   Tumbleweed's   Integrated  Messaging
Exchange(TM)  (IME(TM)),  the infrastructure  companies use for both business to
business and business to consumer  online  communications.  When  combined  with
Worldtalk's WorldSecure e-mail content filtering products, IME enables customers
to centrally  define and enforce policies that drive new traffic across IME. For
example,  United Parcel Service,  a Tumbleweed  customer,  has already announced
integration  of  its  secure  delivery  product,  Document  Exchange(TM),   with
Worldtalk's WorldSecure products.

Upon the  completion of the  transaction,  Worldtalk  will become a wholly owned
subsidiary  of  Tumbleweed.   Under  the  terms  of  the  agreement,   Worldtalk
shareholders  will  receive a fixed  exchange  ratio of 0.26  Tumbleweed  common
shares for each share of Worldtalk common stock.

The  transaction,  which is expected to close in the first  quarter of 2000,  is
intended to be tax free to Worldtalk  shareholders  and to be accounted for as a
"pooling  of  interests."  The  boards  of  directors  of  both  companies  have
unanimously approved the transaction. In addition, Worldtalk has agreed to grant
Tumbleweed an option to purchase up to 19.9% of its  outstanding  common shares,
and certain  Worldtalk and  Tumbleweed  shareholders  have agreed to grant their
irrevocable  proxy to vote in favor of the  transaction.  The  completion of the
transaction  is subject to customary  regulatory  approvals  and the approval of
Worldtalk and Tumbleweed shareholders.

"We're delighted to add Worldtalk's highly talented staff and extensive customer
base who are  committed to business  messaging to  Tumbleweed.  The  WorldSecure
product  family,  a set of e-mail  content  filtering  technologies,  has nearly
doubled  its  revenue  contribution  year over  year,"  said  Jeffrey

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<PAGE>

C.  Smith,  president  and CEO,  Tumbleweed  Communications  Corp.  "Worldtalk's
customers  in financial  services,  health  care,  insurance  and law firms will
accelerate  Tumbleweed's  expansion into these  strategic  markets and create an
opportunity to increase business-critical messaging traffic over IME systems. We
expect the assets Worldtalk  brings to the table will have a significant  impact
on our business, bringing value to our customers and shareholders alike."

"Tumbleweed  has the right  vision for online  communications  and has built the
industry's best infrastructure to capitalize on that vision. We are delighted to
combine the  strengths  of our  product  offering  and  business  strategy  with
Tumbleweed's strong business fundamentals and track record of execution,  " said
James Heisch, Worldtalk acting president and CFO.

ABOUT TUMBLEWEED COMMUNICATIONS CORP.

Tumbleweed  Communications  Corp. is a leading provider of online  communication
solutions for e-businesses  worldwide.  Tumbleweed Integrated Messaging Exchange
(IME) is a comprehensive set of products and services that enables businesses to
combine  the power of e-mail and the web to  establish a secure  online  channel
with their  customers and  partners.  We deliver a complete  infrastructure  for
business  communications,  including a platform that leverages  existing company
systems,  applications  optimized  for  specific  vertical  markets  and  common
business processes, and an extensive development toolkit for building customized
online  services.  Tumbleweed  IME is a  scalable,  feature  rich  communication
solution,  and serves as the foundation for online business  services offered by
customers like Chase Manhattan Bank, Datek Online, United Parcel Service, Pitney
Bowes, and the United States Postal Service.

ABOUT WORLDTALK CORPORATION

Worldtalk  Corporation  is a leading  provider of security and usage  management
software solutions for e-mail and Web communications.  The company's WorldSecure
policy  management   platform   complements   existing   firewalls  by  enabling
organizations  to  enforce  usage  policies  for  all  Internet  e-mail  and Web
communications. Worldtalk delivered the industry's first integrated solution for
managing and enforcing  e-mail security  policies in September 1997. Since then,
organizations have purchased WorldSecure solutions to ensure  confidentiality of
their  external  e-mail  communications,  protect their  intellectual  property,
prevent  Spams and viruses,  and reduce the legal  liabilities  associated  with
Internet  communications.  Worldtalk  products include  WorldSecure/Web  and the
award-winning  WorldSecure/Mail  (previously known as WorldSecure Server), which
are marketed and sold worldwide by Worldtalk,  Value Added Resellers  (VARs) and
distributors. For more information, please visit us at http://www.worldtalk.com.

                                      # # #

Except for the historical information contained herein, the matters discussed in
this press release may constitute  forward-looking statements that involve risks
and  uncertainties  that could cause actual  results to differ  materially  from
those projected.  These statements  include those concerning the consummation of
the acquisition and, if consummated, its potential benefits and effects. In some
cases,  forward-looking  statements  can be  identified by  terminology  such as
"may," "will,"  "should,"  "potential,"  "continue,"  "expects,"  "anticipates,"
"intends,"  "plans,"  "believes,"  "estimates,"  and  similar  expressions.  For
further  cautions  about the risks of investing in Tumbleweed  or Worldtalk,  we
refer you to the documents  Tumbleweed and Worldtalk file from time to time with
the Securities and Exchange Commission,  particularly the Tumbleweed  prospectus
dated August 5, 1999,  each  company's  10-Q filed  November  15, 1999,  and the
registration statement relating to the acquisition to be filed



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<PAGE>

subsequently.  In this regard,  investors are cautioned that the acquisition may
not be  consummated on the terms  proposed or at all, and, if  consummated,  the
combined  companies  will be subject to  numerous  risks and  uncertainties.  We
assume no obligation to update information contained in this press release.

Tumbleweed is a registered  trademark and Integrated  Messaging Exchange and IME
are trademarks of Tumbleweed Communications Corp.

FOR MORE INFORMATION:

Lisa Poulson
Tumbleweed Communications
650-216-2020
[email protected]

Heather Clark
Worldtalk Corporation
408-567-5029
[email protected]


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