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LITE DEPALMA GREEN13ERG & RIVAS, LLC FILEDJoseph J . DePalma (JD{7697 )Two Gateway Center, 12' Floo rNewark, New Jersey 07102 M ~(973) 623-3000

AT 8:30WILL1 , ALSM `t

Liaison Counsel for Plaintiffs CLERK

[Additional Counsel listed on signature page )

TUN1 D STATES DISTRICT COURTDISTRICT OF NEW JERSEY

IN RE AREMISSOFT CORPORATIONSECURITIES LITIGATION

.E l 'iFTER 1I)

MAR 2002

WILLI

Y

CIV. ACTION Vb . 01-CV-2486J[JDGE JOEL P SANO

FTSTIPULATION AND AGREEMENT OF SETTLEMENT WITH AREMISSO

This stipulation and agreement of settlement dated as of March 21, 2002 (th e

"Stipulation") is submitted pursuant to Rule 23 of the Federal Rules of Civil Procedure . Subjec t

to the approval of the Court, this Stipulation is entered into among Lead Plaintiffs George D .

Bjurman & Associates, Ralph DeLuca, Keystone Trading Partners and Andy Win (collectivel y

"Plaintif`s") and the Class (as hereinafter defined) and Defendant AremisS oft Corporatio n

("Arernisoft"), by and through their respective counsel .

WHEREAS ;

A. An action entitled Gunner Tolde4und v Aremis oft Corporation., 1 ,

Civil Action No . 01-CV-2486, was filed in this Court on or about May 24, 2001, thereafter th e

following actions raising related claims were filed : Keystone Trading Partners v_ AremisSoft

-Corporation,et at ., Civil Action No . 01 -CV-2487 ; Mart in Chopp v_ AremisSoft Cn oration t

, Civil Action No. 01-CV-2607 ; Andrew Geiger y . AremisSof Corparatian. et al ., Civil Action

No. 01-CV-2803; Ben Bit r ovne Y. AremisSoft Corporation et al , Civil Action No . O1-CV-

2479; Michael Schwartz v . AremisSoft Corporation. et al ., Civil Action No . 01-CV-2871 ; and

Ralph Duff y . AremisSoft Corporation. et at,, Civil Action No . 01-CV-2979; these actions were

consolidated under the above caption by Order dated August 27, 2001 and are hereinafte r

referred to as the "Action ; "

13 . The First Amended and Consolidated Class Action Complaint (th e

"Complaint") filed in the Action generally alleges, among other things, that Defendants issued

false and misleading press releases and other statements regarding, inter alia, AremisSof ,' s

business and financial condition during the Class Period - April 22, 1999 through and including

July 27, 2001-- which had the effect of artificially inflating the price of AremisSoft's securities at

all relevant tiimes ;

C. The Complaint further alleges that Plaintiffs and other Class Member s

purchased, in the open market or otherwise, securities of ArernisSoft during the Class Period a t

prices artificially inflated as a result of the Defendants' dissemination of false and misleading

statements regarding AremisSoft in violation of Sections 10(b) and 20(a) of the Securities

Exchange Act of 1934, and Rule IOb-5 promulgated thereunder and in violation of Sections 1 1

and 15 of the Securi ties Act of 1933 ;

D. AremisSoft states that it is entering this Stipulation to eliminate the burde n

and expense of further litigation and to consummate the Plan (as described below), which will

result in the creation of the Trust (as defined below) and distribution of SoftBrands commo n

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stock for the benefit of the Class and to holders of AremisSoft common stock . The parties to this

Stipulation recognize, however, that the litigation has been filed by Plaintiffs and defended by

ArernisSoft in good faith and with adequate basis in fact under Federal Rule of Civil Procedur e

11, that the litigation is being voluntarily settled after advice of counsel, and that the terms of the

settlement are fair, adequate and reasonable . This Stipulation shall not be construed or deemed t o

be a concession by any Plaintiff of any infirmity in the claims asserted in the Action;

E. Plaintiffs' Counsel have conducted an investigation relating to the claim s

and the underlying events and transactions alleged in the Complaint . Plaintiffs' Counsel have

analyzed the evidence and have researched the applicable law with respect to the claims o f

Plaintiffs and the Class against AremisSot and the potential defenses thereto ;

F. Plaintiffs, by their counsel, have conducted discussions and arm's lengt h

negotiations with counsel for AremisSoft with respect to a compromise and settlement of th e

Action as against AremisSoft with a view to settling the issues in dispute and achieving the bes t

relief possible consistent with the interests of the Class ; and

G. Based upon their investigation and analysis of the facts and law as set forth

above, Plaintiffs' Counsel have concluded that the terms and conditions of this Stipulation are fair ,

reasonable and adequate to Plaintiffs and the Class, and in their best interests , and have agreed to

settle the claims raised in the Action against Aremis oft pursuant to the terms and provisions o f

this Stipulation, after considering (a) the substantial benefits that Plaintiffs and the members of th e

Class will receive from settlement of the Action, (b) the attendant risks of litigation, and (c) th e

desirability of permitting the Settlement to be consummated as provided by the terms of thi s

Stipulation .

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NOW THEREFORE, without any admission or concession on the part of Plaintiffs

of any lack of merit of the Action whatsoever, and without any admission or concession of any

liability or wrongdoing or lack of merit in the defenses whatsoever by AremisSoft, it is hereby

STIPULATED AND AGREED, by and among the parties to this Stipulation, through their

respective attorneys, subject to approval of the Court pursuant to Rule 23(e) of the Federal Rules

of Civil Procedure, in consideration of the benefits flowing to the parties hereto from the

Settlement, that all Settled Claims (as defined below) as against the Released Persons (as defined

below) shall be compromised, settled, released and dismissed with prejudice, upon and subject to

the following terms and conditions .

RTA DEFIl' N

As used in this Stipulation, the following terms shall have the following

meanings :

(a) "AremisSoft's Counsel" means the law firm of Davis Polk & Wardwell .

(b) "Authorized Claimant" means a Class Member who submits a timely and

valid Proof of Claim form to the Claims Administrator .

(c) "Claims Administrator" means the firm of The Garden City Group, Inc . ,

which shall administer the Settlement.

(d) "Class" and "Class Members" means , for the purposes of this Stipulation

only, all persons who purchased , in the open market or otherwise, securities of AremisSoft

between April 22, 1999 (the Initial Pub lic Offering) through July 27, 2001, inclusive, and who

were damaged thereby (the "Class")_ Excluded from the Class are Lycourgos Kyprianou, Roys

Poyiadjis, Noel R. Voice, Paul I . Bloom , M.G . Mathews, Michael Tymvios, Alex Eapen, Thomas

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David, Scott Bartel, Bartel Eng & Schroeder and any of its current or former partners or affiliate d

entities, PKF (f/k/a Pannell Kerr Forster) and any of its current or former partners or af filiated

entities (excluding Stan J . Patey in his capacity as a Director of AremisSoft), R.K. Dhawan, Kur t

Sedlmayer (atk/a Kurt Sedlmeyer), Barington Asset Management Limited, Alexander Payr ,

Capital Growth Overseas Partners, Inc ., Roger Meyer, Emerging Markets Capital Ltd ., Bernard

Tavel, Global Capital Management Ltd., Trevor Baines , Jupiter Venture Capital Ltd ., Erich Span

(alk/a Erich Spahn), Morgan Capital Partners Ltd ., Johannes Zehethofer, Momentum Equities ,

Inc., Sergei Potaschov (a/kla Sergei Potaschev), Palantine Asset Management Ltd ., Maria Aurora

Carcia-Payr, Westminster International Securities Ltd ., Spahn & Partners Finanz Consult Gmbh ,

George AT., Still & Life Gmbh, Michael Poehn, Denon International Ltd., Michael Swovoda ,

Olympus Capital Investment, Inc ., The Atlas Trust, Oracle Capital Inc., The Trident Trust, Onyx

Capital, Inc ., LIB Global (Holdings) NV, Aremis Holdings, Ltd ., AremisSoft Technology

Ventures, Ltd ., Quantum Group Management, Ltd_, Sincock Holdings Corporation, Lomon d

Finance, Inc., LK Globalsoft,com, Global Consolidator Ltd., MDM Associates (and its successor,

A.J. Gallagher), Orimix Exports, Agroservices (a/k/a Agro Service), Poche and Co. GmbH, Zen

Trade, Gravitas, Con-Imp, Assen Koinov (a/k/a Asen Koinov), Roumen Antonov, Inlay Group ,

Inc., Drax Trading, Ltd ., Edifica, SA, Insyst Electronics Ltd_, and Benny Philip , and any Person s

or Entities directly or indirectly controlling, controlled or under common control of any one o r

more of the foregoing, and each and every transferee , nominee or assignee of any one or more o f

the foregoing, whether holding such interest of record or Beneficially (the "Subordinated Entities"

as defined in the Plan) and Dann V. Angeloff, George H . Ellis, Theodoros Fessas, H . Tate Holt,

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David G. Latzke, John Malamas, George Papadopoulos and Stan Patey (the "D&4 Released

Persons" as defined in the Plan) .

(e) "Class Period" means, for the purposes of this Stipulation only, the perio d

of time from April 22, 1999 through and including July 27, 2001 .

(f) "Effective Date of Settlement" or "Effective Date " means the date upon

which the Settlement contemplated by this Stipulation shall become effective, as set forth in ¶ 2 3

below.

(g) "Net Settlement Securities " means the Settlement Securities remaining after

deduction of any Settlement Securities awarded by the Court to Plaintiffs` Counsel as and for their

attorneys' fees and reimbursement of expenses .

(h) "Notice" means the Notice of Pendency of Class Action, Hearing On Pro-

posed Partial Settlement With AremisSoft, Assignment of Class Claims, and Attorneys' Fee

Petition and Right to Share in Settlement Securities, which is to be sent to members of the Class

substantially in the form attached hereto as Exhibit I to Exhibit A-

(i) "Order and Final Judgment" means the proposed order to be entere d

approving the Settlement substantially in the form attached hereto as Exhibit B .

() "Order for Notice and Hearing" means the proposed order preliminarily

approving the Settlement and directing notice thereof to the Class substantially in the form

attached hereto as Exhibit A_

(k) "Plaintiffs' Counsel" means Plaintiffs' Executive Committee and all of th e

other attorneys representing Plaintiffs listed at the end of this Stipulation .

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(1) ,Plaintiffs' Executive Committee" means the law firms of Schiffrin &

Barroway, LLP, Milberg Weiss Bershad Hynes & Lerach LLP, and Berger & Montague, P .C .

(m) "Plaintiffs' Lead Counsel" means the law firm of Schiffrin & Barroway ,

LLP .

(n) "Plaintiff' Liaison Counsel" means the law firm of Lite DePalm a

Greenberg & Rivas, LLC .

(o) "Plan" means the Plan ofReorganization annexed hereto as Exhibit C .

(p) "Publication Notice" means the summary notice of proposed Settlement

and hearing for publication substantially in the form attached as Exhibit 3 to Exhibit A .

(q) "Released Persons" means AremisSoft Corporation, SoftBrands, Inc . ,

Dann V. Angeloff, George H. Ellis, Theodoros Fessas, H. Tate Holt, David G. Latzke, John

Malamas, George Papadopoulos and Stan Patey .

(r) "Settled Claims" means all claims, rights, causes of action, or liabilitie s

whatsoever which could be asserted against each and every one of the Released Persons, whethe r

known or unknown, in connection with or concerning any act, omission, nondisclosure, fact ,

matter, transaction, occurrence, purchase or sale of any Aremis oft security, or oral or writte n

statement or representation directly or indirectly relating to any allegation in the First Amended

and Consolidated Class Action Complaint, including any and all claims that may already have been

asserted in any pending action, arbitration, or other proceeding . With respect to Stan Patey only,

the scope of the term "Settled Claims" is limited to all claims, rights, causes of action, or liabilitie s

whatsoever as set forth above arising out of, or in connection with, his service as a Director of

AremisSoft Corporation . With respect to SoftBrands, Inc., the scope of the term "Settled

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Claims" shall not be understood to include claims concerning the tax liabilities of AremisSof t

Corporation .

(s) "Settled Defendants' Claims" means any and all claims, rights or causes of

action or liabilities whatsoever, whether known or unknown, that were or could have bee n

asserted by the Released Persons against Plaintiffs, the members of the Class or Plaintiff's '

Counsel, which arise out of or relate in any way to the institution, prosecution, or settlement o f

the Action.

(t) "Settlement" means the settlement contemplated by this Stipulation .

(u) "Settlement Securities" means the sixty and one-half percent (60 .5%) of the

common stock representing the equity and voting rights of SoftBrands, Inc- and the ninety percent

(90%) of the Net Trust Recoveries (as defined in the Trust Agreement, attached as Exhibit A t o

the Plan) .

(v) ' Sof Hrands" means a Delaware corporation to which AremisSoft has

transferred all of the manufacturing and hospitality software businesses formerly held by

AremisSoft .

(w) "Trust" means the Trust to be created pursuant to the terms of the Plan and

the "Trust Agreement" (Exhibit A to the Plan) (a) to which AremisSoft shall transfer all of its

Causes of Action (as defined in the Plan) and Proceed Assets (as defined in the Plan), and (b) to

which shall be assigned any and all claims arising out of the purchase ofAremisoft securitie s

during the Class Period which have been or could be asserted by any person or entity that is a

member of the Class against any individual or entity .

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SCOPE AND EFFECr OF SETTLEMENT

2. The obligations incurred pursuant to this Stipulation shall be in full and final

disposition of the Action as against AremisSoft only and any and all Settled Claims as against all

Released Persons and any and all Settled Defendants' Claims .

(a) Without further action by anyone, upon the Effective Date o f

Settlement , every Class Member, on behalf of themselves, their heirs, executors, administrators,

predecessors , successors, assigns , and any person they represent, for good and sufficient

consideration , the receipt and adequacy of which are hereby acknowledged , shall be deemed to

have , and by operation of law and of the Order and Final Judgment shall have, fully, finally, and

forever released, relinquished , settled, and discharged any and all Settled Claims against the

Released Part ies; provided further, that every Class Member , on behalf of themselves , their heirs,

executors , administrators, predecessors , successors, assigns, and any person they represent, for

good and sufficient consideration, the receipt and adequacy of which are hereby acknowledged,

shall be deemed to have , and by operation of law and of the Order and Final Judgment shall have,

fully, finally, and forever released, relinquished , settled, and discharged all claims as to any or all

of the Released Persons that relate in any way to any act, omission , non-disclosure , fact, matter,

transaction, occurrence , or oral or written statement or representa tion in connection with or

indirectly relating to this Stipulation or the Settlement of this Action; provided, however, that

nothing in the Judgment shall bar any action or claim to enforce the terms of this Stipulation o r

the Order and Final Judgment .

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(b) With respect to any and all Settled Claims, it is hereby stipulated and

agreed that, by the terms of the Stipulation, every Class Member shall have, and shall be deemed

to have, waived and relinquished, to the fullest extent permitted by law, any and all provisions,

rights, and benefits conferred by any federal, state, or foreign law, rule, or common-law doctrine

that is similar, comparable, equivalent, or identical to, or which has the effect of, Section 1542 of

the California Civil Code, which provides :

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

Notwithstanding the provisions of Section 1542 and all similar provisions in California or in any

other state of the United States or the District of Columbia or in any foreign jurisdiction, Class

Members understand and agree that this release is intended to include any and all Settled Claims

that Class Members may have against any or all of the Released Persons, including those Settled

Claims that the Class Members do not now know or suspect to exist in their favor against the

Released Persons, and that this release extinguishes all such Settled Claims . Class Members may

hereafter discover facts in addition to or different from those that they know or believe to be tru e

with respect to the subject matter of the Action, but Class Members hereby stipulate and agree

that they have, and shall be deemed to have, on or after the Effective Date of Settlement, fully,

finally, and forever settled and released any and all Settled Claims against the Released Persons

and without regard to subsequent discovery or existence of such different or additional facts . The

foregoing waiver was separately bargained for and is a key element of the Stipulation .

(c) Upon the Effective Date of this Settlement, the Released Persons shal l

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release and forever discharge each and every of the Settled Defendants' Claims, and shall forever

be enjoined from prosecuting the Settled Defendants' Claims .

THE. S__ETTL. EMENT CONSIDERATION

4, (a) AremisSoft has filed a voluntary petition for relief under Chapter 11 of

the United States Bankruptcy Code . In connection therewith, AremisSoft has filed a pre-

negotiated Plan of Reorganization (the "Plan"), a copy of which is annexed hereto as Exhibit C .

The Plan provides that the Settlement Class shall be entitled to receive in settlement of their

claims against AremisSoft the following "Settlement Securities ." (i) sixty and one-half percent

(60.5%) of the common stock representing the equity and voting rights of SoftBrands, Inc .

("SoftBrands") (such amount shall represent no less than fifty percent (50%) of fully-diluted

SoftBrands common stock) ; and (ii) ninety percent (90%) of the Net Trust Recoveries (as defined

in the Plan) .' Those Class Members who elect to opt-out of the Settlement shall receive the same

share of the sixty and one-half percent (60 .5%) of the common stock representing the equity and

voting rights of SoftBrands as they would have received had they not elected to opt-out of the

Settlement, however, they shall not receive any Beneficial Interests in the Trust under the Plan .

3 The Trust shall be created pursuant to the terms of the Plan and the "TrustAgreement" (Exhibit A to the Plan), The purpose of the Trust will be to recover as much cashand proceeds as possible from the claims and assets contributed to the Trust as more fully setforth in the Trust Agreement . Potential recoveries include, but are not limited to, causes of actionagainst individuals involved in the past management of AremisSoft, applicable insurance carriers,law firms, accounting firms, underwriters and other professional advisors, as well as recoveriesfrom the disposition of remaining businesses and other investments and contracts contributed byAremisSoft, if any, to the Trust .

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(b) SoftBrands is a Delaware Corporation and AremisSoft has transferred t o

SoftBrands all of the manufacturing and hospitality software businesses formerly held by

AremisSoft_

(c) ArenusSoft shall transfer to the Trust all of the Causes of Action (a s

defined in the Plan) and Proceed Assets ( as defined in the Plan), as set forth in the Trust

Agreement and the Plan. To the extent that there is any prohibition on the transfer of a Cause of

Action to the Trust, the Trust will have the right to oversee the pursuit of such Cause of Action

and to receive any proceeds realized on account of the pursuit of such action .

(d) The Plan shall also provide that : (i) the beneficial holders of record o f

AremisSoft common stock on the Distribution Record Date (as defined in the Plan), a group tha t

is understood to include some Class Members, shall receive common stock representing thirty-

nine and one-half percent (39 .5%) of the equity and voting rights of Softl3rands ; (u) executive

management and employees of SoftBrands shall receive options that represent twenty-one percent

(21%) of the outstanding common stock of SoftBrands on the Effective Date of the Plan ; and (iii )

SoftBrands shall be entitled to receive ten percent (10%) of the Net Trust Recoveries .

(e) Following consummation of the Plan, (i) ArernisSoft will distribute th e

sixty and one-half percent (60 .5%) of the common stock of SoftBrands to the Class (includin g

those members of the Class who elect to opt-out of the Settlement) ; (ii) Settlement Clas s

Members shall receive one hundred percent (100%) of the Beneficial Interests in the Trust an d

shall be entitled to receive ninety percent (90%) of Net Trust Recoveries ; and (iii) AremisSoft wil l

distribute the thirty-nine and one -half percent (39.5%) ofthe common stock of SoftBrands to the

allowed holders of AremisSoft common stock on the Distribution Record Date . AremisSoft

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agrees to issue and deliver the shares representing sixty and one-half percent (60.5%) of

Soft Brands on the instructions, and in such manner as Plaintiffs' Lead Counsel shall direct

following the Effective Date of this Plan .

(f) AremisSoft will, subject to approval by the Bankruptcy Court , pay all pre-

confirmation costs associated with providing notice of the Settlement to the Class and

administration of the Settlement ,

5 . The parties hereto further agree that , as part of this Settlement, any and all claims

arising out of the purchase of AremisSoft securities during the Class Pe riod which have been or

could be asserted by any person or entity that is a member of the Settlement Class against any

individual or entity shall be assigned to, and for the benefit of, the Trust . Liquidating Trust

Agreement, attached to the Plan as Exhibit A.

6. The Net Settlement Securities shall be distributed to the Authorized Claimants as

provided in TT 11-13 hereof

ADMINISTRATION

7. The Claims Administrator shall administer the Settlement under Plaintiffs' Lead

Counsel's supervision and subject to the jurisdiction of the Court. Except as stated in ¶ 15 hereof,

AremisSoft shall have no responsibility for the administration of the Settlement and shall have no

liability to the Class in connection with such administration . Areas isSoft shall cooperate in the

administration of the Settlement to the extent reasonably necessary to effectuate its terms,

including providing without charge all information from AremisSoft's transfer records concerning

the identity of Class Members and beneficial holders of record of AremisSoft securities on the

Distribution Record Date, and their transactions .

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8 . AremisSolt shall pay the reasonable costs and expenses associated with the

administration of the Settlement, up until and including the date of the confirmation of the Plan,

including without limitation, the actual costs of publication, printing and mailing the Notice,

reimbursements to nominee owners for forwarding notice to their beneficial owners, and the

administrative expenses incurred and fees charged by the Claims Administrator in connection with

providing notice and processing the submitted claims and allocating the net Settlement Securities

to Authorized Claimants- After confirmation of the Plan, any further costs and expenses

associated with the administration of the Settlement, shall be paid as Trust Expenses (as defined in

the Trust Agreement) and from any recoveries obtained for the Trust as further detailed in the

Trust Agreement .

ATTORNEYS' FEES AND EXPENSE S

9. Plaintiffs' Counsel will apply to the Court for an award of attorneys' fees not to

exceed one-third (33 113%) of the Settlement Securities , and for reimbursement of expenses .

ADMMSTRATION EXPENSE

10. Plaintiffs' Counsel will apply to the Court, on notice to ArernisSof's Counsel, for

an order (the "Class Distribution Order") among other things : (i) approving the Claims

Administrator's administrative determinations concerning the acceptance and rejection of the

claims submitted herein; (ii) approving any fees and expenses of the Claims Administrator not

previously paid ; and, (iii) if the Effective Date of this Settlement and the Plan have occurred,

directing distribution of the Net Settlement Securities to Authorized Claimants .

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niSTRIB TION TO AUTHORIZED CLAIMANT S

11 . The Claims Administrator shall determine each Authorized Claimant' s pLo_ rata

share of the Net Settlement Securities based upon each Authorized Claimant's Recognized Claim

(as defined in the Plan of Allocation described in the Notice annexed hereto as Exhibit 1 t o

Exhibit A, or in such other Plan of Allocation as the Court approves) .

12. The Plan of Allocation proposed in the Notice is not a necessary term of thi s

Stipulation and it is not a condition of this Stipulation that that Plan of Allocation be approved .

13 . Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement

Securities based on his or her Recognized Claim compared to the total Recognized Claims of al l

accepted claimants . This is not a claims-made settlement . AremisSoft shall not be entitled t o

revise the allocation of Net Settlement Securities to the Class once the Settlement becomes final .

AremisSoft shall have no involvement in reviewing or challenging claims .

ADMINISTRATION OF THE SETLEMENT

14 . Any member of the Class who does not submit a valid Proof of Claim will not b e

entitled to receive any of the Net Settlement Securities but will otherwise be bound by all of the

terms of this Stipulation and the Settlement, including the terms of the Judgment to be entered i n

the Action, the assignment of claims to the Trust, and the releases provided for herein, and will b e

barred from bringing any action against the Released Persons concerning the Settled Claims .

15 . . Plaintiffs' Lead Counsel shall be responsible for supervising the administration o f

the Settlement and disbursement of the Net Settlement Secu rities by the Claims Administrator .

Except for its obligations under paragraph 4 hereof (to file a petition under chapter 11 of the

United States Bankruptcy Code, to transfer assets to So$lrands, to transfer claims and assets, i f

15

any, to the Trust, to distribute 60.5% of SoftBrands's equity to or for the benefit of the Class

(including those members of the Class who opt-out of the Settlement), to transfer 100% of th e

Beneficial Interests of the Trust to or for the benefit of the Settlement Class, and to pay for th e

costs of notice and administration of the Settlement up until and including the date o f

confirmation of the Plan, to cooperate in the production of information with respect to the

identification of Class Members and beneficial holders of record of Aremis oft securities on the

Distribution Record Date from its shareholder transfer records, as provided herein, and to issue

the Settlement Securities in accordance with the instructions to be provided by Plaintifs' Lead

Counsel and/or the Claims Administrator), AremisSoft shall have no liability, obligation o r

responsibility for the administration of the Settlement or allocation of the Net Settlement

Securities. Plaintiffs' Lead Counsel shall have the right, but not the obligation, to waive what the y

deem to be formal or technical defects in any Proofs of Claim submitted in the interests of

achieving substantial justice .

16. For purposes of determining the extent , if any, to which a Class Member shall b e

entitled to be treated as an "Authorized Claimant," the following conditions shall apply :

(a) Each Class Member shall be required to submit a Proof of Claim (se e

attached Exhibit 2 to Exhibit A), supported by such documents as are designated therein ,

including proof of the Claimant' s loss, or such other documents or proof as Plaintiffs' Lea d

Counsel, in their discretion, may deem acceptable ;

(b) All Proofs of Claim must be submitted by the date specified in the Notice

unless such period is extended by Order of the Court . Any Class Member who fails to submit a

Proof of Claim by such date shall be forever barred from receiving any payment pursuant to thi s

16

Stipulation (unless, by Order of the Court, a later submitted Proof of Claim by such Clas s

Member is approved), but shall in all other respects be bound by all of the terms of this Stipulation

and the Settlement including the terms of the Judgment to be entered in the Action and the

releases provided for herein, and will be barred from bringing any action against the Released

Persons concerning the Settled Claims . Provided that it is received before the motion for the

Class Distribution Order is filed, a Proof of Claim shall be deemed to have been submitted when

posted, if received with a postmark indicated on the envelope and if mailed by first-class mail and

addressed in accordance with the instructions thereon. In all other cases, the Proof of Claim shall

be deemed to have been submitted when actually received by the Claims Administrator ;

(c) Each Proof of Claim shall be submitted to and reviewed by the Claims

Administrator, under the supervision of Plaintiffs' Lead Counsel, who shall determine in

accordance with this Stipulation the extent, if any, to which each claim shall be allowed, subject to

review by the Court pursuant to subparagraph (e) below;

(d) Proofs of Claim that do not meet the submission requirements may be

rejected . Prior to rejection of a Proof of Claim, the Claims Administrator shall communicate with

the Claimant in order to remedy the curable deficiencies in the Proof of Claim submitted . The

Claims Administrator, under supervision of Plaintiffs' Lead Counsel, shall notify, in a timely

fashion and in writing, all Claimants whose Proofs of Claim they propose to reject in whole or in

part, setting forth the reasons therefor, and shall indicate in such notice that the Claimant whose

claim is to be rejected has the right to a review by the Court if the Claimant so desires and

complies with the requirements of subparagraph (e) below ;

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(e) If any Claimant whose claim has been rejected in whole or in part desires t o

contest such refection, the Claimant must, within twenty (2-0) days after the date of mailing of the

notice required in subparagraph (d) above, serve upon the Claims Administrator a notice and

statement of reasons indicating the Claimant's grounds for contesting the rejection along with any

supporting documentation, and requesting a review thereof by the Court . If a dispute concerning

a claim cannot be otherwise resolved, Plaintiffs' Lead Counsel shall thereafter present the reques t

for review to the Court ; and

(f) The administrative determinations of the Claims Administrator accepting

and rejecting claims shall be presented to the Court, on notice to AremisSofi's Counsel, for

approval by the Court in the Class Distribution Order .

17. Each Claimant shall be deemed to have submitted to the jurisdiction of the Cour t

with respect to the Claimant's claim, and the claim will be subject to investigation and discovery

under the Federal Rules of Civil Procedure, provided that such investigation and discovery shal l

be limited to that Claimant's status as a Class Member and the validity and amount of th e

Claimant's claim . No discovery shall be allowed on the merits of the Action or Settlement in

connection with processing of the Proofs of Claim .

18. Payment pursuant to this Stipulation shall be deemed final and conclusive agains t

all Class Members . All Class Members whose claims are not approved by the Court, shall be

barred from participating in distributions from the Net Settlement Securities, but otherwise shal l

be bound by all of the terms of this Stipulation and the Settlement, including the terms of th e

Judgment to be entered in the Action, the assignment of claims to the Trust, and the release s

18

provided for herein, and will be barred from bringing any action against the Released Person s

concerning the Settled Claims .

19. All proceedings with respect to the administration, processing and determination

of claims described by 1 16 of this Stipulation and the determination of all controversies relatin g

thereto, including disputed questions of law and fact with respect to the validity of claims, shall b e

subject to the jurisdiction of the Court .

20, The Net Settlement Securities shall be distributed to Authorized Claimants by

AremisSoft or the Trust only after the Effective Date of this Settlement and the Effective Date o f

the Plan, and after : (i) all Claims have been processed, and all Claimants whose Claims have bee n

rejected or disallowed, in whole or in part, have been notified and provided the opportunity to b e

heard concerning such rejection or disallowance ; (ii) all objections with respect to all rejected or

disallowed claims have been resolved by the Court, and all appeals therefrom have been resolve d

or the time therefor has expired ; ( iii) all matters with respect to attorneys ' fees, costs, and

disbursements have been resolved by the Court, all appeals therefrom have been resolved or th e

time therefor has expired ; and (iv) all costs of administration have been paid .

TERMS OF ORDER FOR NOTICE AND TEARIN G

21 . Promptly following the execution of this Stipulation and after obtaining approva l

of the Bankruptcy Court for AremisSoft's payment of the costs and expenses of notice an d

administration, Plaintiffs' Counsel and AremisSoft's Counsel jointly shall apply to the Court fo r

entry of an Order for Notice and Hearing, substantially in the form annexed hereto as Exhibit A .

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TERMS OF ORDE ND FINAL JUDGMENT

22 . If the Settlement contemplated by this Stipulation is approved by the Court ,

counsel for the parties shall request that the Court enter an Order and Final Judgment substantially

in the form annexed hereto as Exhibit B .

EFFECTIVE DATE OF TTLEMEN R OR TERMINATION

23 . The Effective Date of Settlement shall be the date when all the following shal l

have occurred :

(a) entry of the Order for Notice and Hearing in all mate rial respects in the

form annexed hereto as Exhibit A;

(b) approval by the Court of the Settlement , following notice to the Class and

a hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure ;

(c) entry by the Bankruptcy Court of an Order confirming the Plan ; and

(d) entry by the Court of an Order and Final Judgment , in all material respects

in the form set forth in Exhibit B annexed hereto, and the expiration of any time for appeal o r

review of such Order and Final Judgment, or, if any appeal is filed and not dismissed , after such

Order and Final Judgment is upheld on appeal in all material respects and is no longer subject to

review upon appeal or review by writ of certiorari , or, in the event that the Court enters an order

and final judgment in form other than that provided above ("Alternative Judgment ") and none of

the parties hereto elects to terminate this Settlement , the date that such Alternative Judgment

becomes final and no longer subject to appeal or review.

24_ Aremis oft's Counsel or Plaintiffs' Lead Counsel shall have the right to terminate

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the Settlement and this Stipulation by providing written notice of their election to do s o

("Termination Notice") to all other parties hereto within thirty (30) days of (a) the Court' s

declining to enter the Order for Notice and Hearing in any material respect ; (b) the Court' s refusal

to approve this Stipulation or any material part of it, (c) the Court's declining to enter the Order

and Final Judgment in any material respect ; (d) the Bankruptcy Court's refusal to confirm the

Plan; (e) the date upon which the Order and Final Judgment is modified or reversed in an y

material respect by the Court of Appeals or the Supreme Court ; or (f) the date upon which an

Alternative Judgment is modified or reversed in any material respect by the Court of Appeals or

the Supreme Court .

25. In the event that there is any non-delivery by AremisSoft of any of the Settlement

Securities required to be delivered hereunder within ten (10) business days after Plaintiffs' Lead

Counsel furnishes directions for such delivery to AremisSot.'s Counsel (and after all othe r

conditions to the issuance of the Settlement Securities have been met), then Plaintiffs' Lead

Counsel shall have the option to terminate this Settlement .

26. Except as otherwise provided herein, in the event the Settlement is terminated o r

fails to become effective for any reason, then the parties to this Stipulation shall be deemed t o

have reverted to their respective status in the Action as of March 14, 2002 and, except as

otherwise expressly provided, the parties shall proceed in all respects as if this Stipulation and any

related orders had not been entered, except that any costs of administration and notice actually

incurred and paid or payable by AremisSoft hereunder shall remain the obligation of AremisSof .

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NO AI)MISSION OF WRON DOI~N

27 . This Stipulation, whether or not consummated , and any proceedings taken

pursuant to it:

(a) shall not be offered or received against the AremisSoft as evidence of o r

construed as or deemed to be evidence of any presumption, concession, or admission b y

AremisSoft u ith respect to the truth of any fact alleged by Plaintiffs or the validity of any claim

that had been or could have been asserted in the Action or in any litigation, or the deficiency of

any defense that has been or could have been asserted in the Action or in any litigation, or of an y

liability, negligence, fault, or wrongdoing ofAremisSoft ;

(b) shall not be offered or received against AremisSoft as evidence of a

presumption, concession or admission of any fault, misrepresentation or omission with respect t o

any statement or written document approved or made by ArernisSoft, or against the Plaintiffs and

the Class as evidence of any infirmity in the claims of Plaintiffs and the Class;

(c) shall not be offered or received against AremisSoft or against the Plaintiffs

or the Class as evidence of a presumption, concession or admission with respect to any liability,

negligence, fault or wrongdoing, or in any way referred to for any other reason as against any o f

the part ies to this Stipulation, in any other civil, criminal or administrative action or proceeding,

other than such proceedings as may be necessary to effectuate the provisions of this Stipulation ;

provided, however, that if this Stipulation is approved by the Court, the Released Persons may

refer to it to effectuate the liability protection granted them hereunder ;

22

(d) shall not be construed against AremisSoft or the Plaintiffs and the Class as

an admission or concession that the consideration to be given hereunder represents the amount

which could be or would have been recovered after trial ; and

(e) shall not be construed as or received in evidence as an admission ,

concession or presumption against Plaintiffs or the Class or any of them that any of their claim s

are without merit or that damages recoverable under the Complaint would not have exceeded the

value of the Settlement Securities .

MISCELLANEOUS, PROVISION S

28, All of the exhibits attached hereto are hereby incorporated by reference as though

fully set forth herein .

29. The parties to this Stipulation intend the Settlement to be a final and complet e

resolution of all disputes asserted or which could be asserted by the Settlement Class Members

against the Released Persons with respect to the Settled Claim s. Accordingly, Plaintiffs and

AremisSoft agree not to assert in any forum that the litigation was brought by Plaintiffs o r

defended by AremisSoft in bad faith or without a reasonable basis. The parties hereto shall assert

no claims of any violation of Rule 11 of the F ederal Rules of Civil Procedure against any other

party hereto relating to the prosecution, defense, or sett lement of the Action . The parties agree

that the amount paid and the other terms of the Settlement were negotiated at arm's length in

good faith by the parties, and reflect a settlement that was reached voluntarily after consultatio n

with experienced legal counsel .

30, This Stipulation may not be modified or amended, nor may any of its provision s

be waived except by a writing signed by all parties hereto or their successors-in-interest.

23

31 . The headings herein are used for the purpose of convenience only and are not

meant to have legal effect.

32. The administration and consummation of the Settlement as embodied in this

Stipulation shall be under the authority of the Court and the Court shall retain jurisdiction for th e

purpose of entering orders providing for awards of attorneys' fees and expenses to Plaintiffs '

Counsel and enforcing the terms of this Stipulation .

33 . The waiver by one party of any breach of this Stipulation by any other party shal l

not be deemed a waiver of any other prior or subsequent breach of this Stipulation .

34. This Stipulation and its exhibits (including the Plan and its exhibits) constitute th e

entire agreement among the parties hereto concerning the Settlement of the Action, and n o

representations, warranties, or inducements have been made by any party hereto concerning thi s

Stipulation and its exhibits other than those -contained and memorialized in such documents .

35, This Stipulation may be executed in one or more counterparts, including b y

signature transmitted by facsimile . All executed counterparts and each of them shall be deemed t o

be one and the same instrument provided that counsel for the parties to this Stipulation shal l

exchange among themselves original signed counterparts .

36. This Stipulation shall be binding upon, and inure to the benefit of, the successors

and assigns of the parties hereto .

37. The construction , interpretation, operation, effect and validity of this Stipulation,

and all documents necessary to effectuate it, shall be governed by the internal laws of the State o f

New Jersey without regard to conflicts of law, except to the extent that federal law requires tha t

federal law governs.

24

38, This Stipulation shall not be construed more strictly against one party than another

merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one o f

the parties, it being recognized that it is the result of arm's-length negotiations between the partie s

and all parties have contributed substantially and materia lly to the preparation of this Stipulation .

39 . All counsel and any other person executing this Stipulation and any of the exhibit s

hereto, or any related settlement documents, warrant and represent that they have the full

authority to do so and that they have the authority to take appropriate action required o r

permitted to be taken pursuant to the Stipulation to effectuate its terms .

40. Plaintiffs' Lead Counsel and AremisSoft's Counsel agree to cooperate fully with

one another in seeking Court approval of the Order for Notice and Hearing , the Stipulation an d

the Settlement, and to promptly agree upon and execute all such other documentation as may be

reasonably required to obtain final approval by the District Court and as necessary, th e

Bankruptcy Court, of the Settlement-

LI'TE DEPALMA GREENBERG& RIVAS, LLC

By: L ta4a~t,ep J. ePalma, Esq .

to Gateway Center, 12d` FloorNewark, NJ 07102-5003Telephone: (973) 623-3000

Liaison Counsel for Plaintiffs

25

SCRUFRIN & BARROWAY, LLP

By: C I" (

Richard S . Schiffrin , Esq .Stuart L. Berman, Esq .Marc Wi11ner, Esq .Three Bala Plaza East , Suite 400Bala Cynwyd , PA 19072Tel : (610) 667-7706

Lead Counsel for Plaintiffs

MILBERG WEISS BERSHADHYNES & LERACH LLP

By :Melvyn I . eiss, Esq .Francis P . Karam, Esq .Daniel Altman, Esq .One Pennsylvania PlazaNew York, NY 10119Tel: (212) 594-530 0

-AND --

BERGER & MONTAGIJE, P.C.

By, 7dL 5 /. 4Todd S. Collins, Esq_Jacob A. Goldberg, Esq.Douglas Risen, Esq.1622 Locust StreetPhiladelphia, PA 19103Tel: (215) 875-300 0

Executive Committee for Plaintiffs

26

KELLER ROHRBAC , LLPLynn Lincoln Sarko, Esq .Juli Desper, Esq .1201 Third Ave_, Suite 3200Seattle, WA 98101-3052(206) 623-1900

By:

27

THE OLSEN LAW FIRMKurt Olsen, Esq.2121 K Street, N.W .Suite 800Washington, D .C. 20037(703) 351-5199

Attorneys for Plaintiffs

DAVIS POLK & WARDWELL

Stephen 11 . Case, Esq .Eric F . Grossman, Esq .450 Lexington Avenu eNew York, New York 10017Telephone : (212) 450-400 0

Counsel for Defendant AremisSoftCorporation

RERGER & MONTAGl1)E, P.C.

By:Todd S. Collins, Esq.Jacob A, Goldberg, Esq-Douglas Ibsen, Esq,1622 Locust StreetPhiladelphia, PA 19103Tel: (215) 875-3000

Executive Committee for Plainti%

TELLER ROEL"ACKC, PLynn Lincoln Sarko, Esq.Juli Despcr, Fsq .1201 Third Ave ., Suite 3200Seattle, WA 98101-3052(206) 623-1900

THE OLSEN LAW FIRMKurt Olsen, Esq-2121 K Street, N .W,Suitt 800Washington . D.C 200-37(703) 351-5199

Attorneys for Plaintiffs

D VIS K & WAR DWELL

By:hen H. Case, Esq .

Sic F. Grosse , Esq .450 Lexington Avenue

New York, New York 10017Telephone: (212) 450-400 0

Counsel for Defendant AremisSuftCorporation

A