Software Equity Group's 2010 M&A Survey

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Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has guided and advised companies on five continents, including privately-held software and technology companies in the United States, Canada, Europe, Asia Pacific, Africa and Israel. We have represented public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity Group also advises several of the world's leading private equity firms. We are ranked among the top ten investment banks worldwide for application software mergers and acquisitions.

Our value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology domain expertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including Software-as-a Service (SaaS), software on-demand and perpetual license. We have profound understanding of software company finances, operations and valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.

Perhaps most important are the relationships we've built and the industry reputation we enjoy. Software Equity Group is known and respected by publicly traded and privately owned software and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity Reports are read and relied upon by more than eighteen thousand industry executives, entrepreneurs and equity investors in sixty-one countries, and we have been quoted widely in such leading publications as The Wall Street Journal, Barrons, Information Week, The Daily Deal, The Street.com, U.S. News & World Report, Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit Free Press, Entrepreneur Magazine, Softletter, Software Success, Software CEO Online and Software Business Magazine. Software Equity Group’s senior bankers have keynoted and spoken at more than one hundred software industry conferences and seminars, including Software Business, SoftExpo, Culpepper, VAR Conference, ACETECH, and the Arizona, Colorado, Chicago, Southern California, Denver, San Diego, Washington State and Boulder Software Associations.

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2009 Annual Software Industry Equity Report Contents

U.S. ECONOMY: SOFTWARE INDUSTRY MACROECONOMICS...... 1 IT SPENDING...... 2 PUBLIC SOFTWARE COMPANY STOCK PERFORMANCE ...... 2 PUBLIC SOFTWARE COMPANY MARKET VALUATIONS ...... 3 PUBLIC SOFTWARE COMPANY FINANCIAL PERFORMANCE ...... 5 PUBLIC SOFTWARE COMPANY PERFORMANCE BY PRODUCT CATEGORY ...... 6 PUBLIC SOFTWARE AS A SERVICE (SAAS) COMPANY MARKET VALUATIONS AND FINANCIAL PERFORMANCE...... 8 PUBLIC INTERNET COMPANY MARKET VALUATIONS AND FINANCIAL PERFORMANCE ...... 9 INITIAL PUBLIC OFFERINGS...... 11 VENTURE CAPITAL INVESTMENT...... 12 THE BUYERS SPEAK: SOFTWARE EQUITY GROUP’S 2010 M&A SURVEY...... 14 MERGERS AND ACQUISITIONS: THE NUMBERS...... 17

M&A DEAL VOLUME AND SPENDING: ALL INDUSTRY SECTORS ...... 17

SOFTWARE M&A DEAL VOLUME AND SPENDING...... 18

SOFTWARE M&A DEAL CURRENCY ...... 19

PRIVATE VS. PUBLIC BUYERS ...... 20

SOFTWARE M&A VALUATIONS ...... 21

M&A EXIT VALUATIONS BY SOFTWARE CATEGORY...... 23

SAAS ...... 24 APPENDIX A: 2009 PUBLIC MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY ...... 26 APPENDIX B: 2009 MERGERS AND ACQUISITIONS, SELECT PUBLIC SELLER VALUATIONS...... 29 APPENDIX C: 2009 MERGERS AND ACQUISITIONS, MOST ACTIVE BUYERS ...... 30 APPENDIX D: 2009 MERGERS AND ACQUISITIONS, SOFTWARE INDUSTRY MEGA-DEALS...... 33 APPENDIX E: 2009 MERGERS AND ACQUISITIONS, SELECT SOFTWARE-AS-A-SERVICE SELLERS ...... 34 APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT...... 35 APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS ...... 42 APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS – SEEKING SOFTWARE ACQUISITIONS . 55

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Figure 1: U.S. Gross Domestic Product and Unemployment Rate

10%

8% 7.5%

5.7% 6% 4.8% 3.6% 3.9% 4% 3.5% 3.5% 3.6% 3.0% 3.0% 3.2% 2.7% 2.7% 2.5% 2.6% 2.1% 2.1% 2.2% 2% 1.5% 1.2% 1.3% 1.1% 1.2% 0.2% 0% 4Q 4 4Q04 4Q05 4Q06 4Q 4 4Q09 Q Q 0 03 07 -0.7% 08 2 -0.7% -2%

-2.7% -4%

-5.4% -6% -6.4%

-8% GDP % Growth Unemployment Rate

U.S. ECONOMY: SOFTWARE INDUSTRY MACROECONOMICS

We begin our review of 2009, as always, with a growth. The Index is now slightly higher than its brief synopsis of U.S. Gross Domestic Product July 2007 peak. (GDP) behavior over the course of the year. GDP is best defined as the total market value of all Looking a bit closer at the Conference Board’s final goods and services produced in a country LEI, eight of ten indicators increased in in a given year, equal to total consumer, November. The positive contributors, beginning investment and government spending, plus the with the largest positive contributor, were interest value of exports, minus the value of imports. rate spread, building permits, average weekly initial claims for unemployment insurance When we published our 2008 Annual Report a (inverted), stock prices, index of consumer year ago, in January 2009, 4Q08 GDP was expectations, index of supplier deliveries (vendor forecast to contract 3.3%. The actual 5.4% performance), money supply and manufacturers’ decline, equating to $183 billion, was far worse new orders for nondefense capital goods. The than predicted. The GDP nosedive continued in average workweek of production workers and 1Q09, declining on an annualized basis by 6.4% manufacturers’ new orders for consumer goods (Figure 1). In February 2009, President Obama and materials held steady in December. signed the $787 billion stimulus package into law. Although the impact of this legislation is the Despite the GDP turnaround and modest subject of ongoing debate, the GDP’s rate of progress on other fronts, it wasn’t all good news. decline slowed in 2Q09 to 0.7% and GDP actually In January 2009, the U.S. unemployment rate grew by an encouraging 2.2% in 3Q09. stood at 7.7% amid signs it would worsen before getting better. As predicted, unemployment The Bureau of Economic Analysis (BEA) is increased throughout 2009, but the job loss rate predicting GDP will rise 5.7% in 4Q09 (Figure 1). began to level off at the end of the year. The U.S. This latest, and quite optimistic forecast seems Labor Department estimates the unemployment credible in light of recently released economic rate increased to 9.3% in 3Q09 and 10.0% during data. The U.S. Conference Board’s Leading 4Q09, markedly worse than the 6.9% Economic Index (LEI) increased 0.3% in October, unemployment rate of a year earlier (Figure 1). 1.0% in November and 1.1% in December marking the ninth consecutive month of LEI

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Nonfarm payroll employment declined by an server load balancing and storage integration additional 85,000 jobs in December, with the most solutions are likely to fare poorly in attracting job losses coming from the construction, enterprise IT dollars in 2010 (Figure 2). manufacturing and retail sectors. The healthcare and temporary help services sectors added jobs The IT spending surveys also underscore the in December. While no cause for celebration, reluctance of most enterprise CTOs to invest serious job cutting appears to have subsided, and heavily in SaaS applications. SaaS proponents we believe 2010 will see signs of stabilization, predicted the recession would stimulate increased followed by measured improvement. enterprise adoption of SaaS apps because of lower entry (subscription vs. perpetual license) IT SPENDING costs, but that does not appear to have been the case. However, if IT spending forecasts of +5% CIOs reined back hard on spending for software, prove accurate, we anticipate greater enterprise hardware and IT services in 2009. Following IT adoption of SaaS in the arenas it has proved most spending increases of 9% in 2007, and 6% in popular – CRM and workforce management. We 2008, most IT spending surveys are estimating also see greater enterprise adoption of discrete, domestic IT capital spending will have declined functionally specific SaaS applications, such as 10% - 12% in 2009. To provide some expense management and supply chain/extranet perspective, we estimate every percentage collaboration. But the jury is still out as to whether increase/decrease in IT spending equates to large numbers of enterprises will entrust mission approximately $5 billion. critical tasks and data to third party hosts. We remain convinced that widespread enterprise It appears the worst is over. Extrapolating from adoption of mission critical SaaS solutions will not three different IT spending surveys we’ve occur until CIOs/CTOs are no longer concerned analyzed, it’s likely CIO purse strings will loosen with SaaS security and the viability of integrating considerably in 2010, if the economy doesn’t SaaS apps with on-premise applications. backslide. In its January 2010 survey, Goldman Sachs revised its IT spending forecast to +5% in All that said, we anticipate increased spending by 2010, an encouraging improvement over its +2% Small/Medium Businesses (SMBs) on SaaS projection in July 2009. solutions, particularly ERP, CRM, supply chain and financial applications, provided the GDP According to the Goldman Sachs Survey, desktop continues to recover as forecast. and server virtualization, BI/analytics and security software will be the top CTO spending priorities in PUBLIC SOFTWARE COMPANY STOCK the year ahead, while application acceleration, PERFORMANCE

Figure 2: CTO Tech Spending Priorities (Highest After racking up sizable losses in 1Q09, the public Rankings at Top) markets bottomed out in early March, began to recover in early Q2, and trended upward, albeit in • Server virtualization fits and starts, for the balance of the year. The • Desktop virtualization • Business intelligence and analytics Dow, S&P 500 and NASDAQ closed the year up • Security software / appliances 18.8%, 23.5% and 43.9%, respectively, from the • Data management software first trading day of 2009 (Figure 3). • Unified communications • Data center automation / IT process mgmt software • ERP / on-premise enterprise software applications The SEG Software Index, our tracking survey of • WAN optimization 176 publicly traded software companies, • SaaS software applications consistently outperformed the major stock market • Application integration software / middleware indices in 2009 (Figure 3). As of December 31, • Network management software / appliances • Wireless networking the median stock price of the SEG Software Index • Collaboration software reflected a 50.9% gain over the January 2 • TelePresence opening price. Investors, once again, took • Storage de-duplication technologies relative comfort in the software industry’s unique • Application acceleration / server load balancing ability to maintain healthy operating margins Data Source: Goldman Sachs January 2010 IT Spending Survey

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Figure 3: Major Market Indices Compared to the SEG Software, Internet and SaaS Indices

DOW S&P 500 NASDAQ SEG SaaS Index SEG S/W Index SEG Internet Index

80.0%

60.0%

40.0%

20.0%

0.0%

-20.0%

-40.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec despite flat or declining revenue and a very PUBLIC SOFTWARE COMPANY MARKET difficult economy. VALUATIONS

Indeed, 224 out of the 252 (88.9%) public While stock prices of public software companies companies comprising our Software, SaaS and rebounded sharply by year end, they remained well Internet indices reported higher year-to-date below pre-Recession levels and dragged down (YTD) stock prices at the close of 2009. Ten enterprise values. The median enterprise value achieved YTD market returns greater than 220% (EV) to revenue multiple of public companies in our (Figure 4). What a difference a year makes. At SEG Software Index declined for the second the close of 2008, only 16 of the 270 (5.9%) public consecutive year on an annualized basis, falling companies comprising our indices reported higher from 2.7x in 2007 to 1.9x in 2008 to 1.5x in 2009. stock prices. However, 2009’s quarterly trend line was encouraging, with the median EV/Revenue multiple Figure 4: High Flyers – 2009 Stock Market Return increasing from 1.2x in 1Q09 to 1.9x by close of 4Q09 (Figures 5 and 6). 2009 High Flyers - Stock Market Return 2009 Company Ticker Category Stock Investors, once again, favored the largest (annual Return revenue) public software companies in 4Q09, Multimedia, Graphics, Digital Sonic Solutions SNIC 570% believing they are far better positioned to weather Media a long storm. SEG Software Index companies Sourcefire, Inc. FIRE Security 378% with revenues greater than $1 billion posted a Messaging, Conferencing & Evolving Systems, Inc. EVOL 291% Communications median EV/Revenue multiple of 2.8x in 4Q09, CRM, Sales & Marketing LivePerson LPSN 283% compared to a median EV/Revenue multiple of Software 1.0x for software companies with revenue less ClickSoftware CKSW HR & Workforce Management 278% Technologies Ltd. than $100 million (Figure 12). Education & Computer Based PLATO Learning, Inc. TUTR 263% Training Public software company valuations measured by Blue Coat Systems, Inc. BCSI Security 240% median EV/EBITDA fared similarly during the ModusLink Global Supply Chain Management & MLNK 226% Solutions, Inc. Logistics recession, declining on an annualized basis from Internet - eCommerce & 18.5x in 2007 to 12.5x in 2008 to 10.0x for all Expedia, Inc. EXPE 222% Portals 2009. However here, too, there was marked Baidu, Inc. BIDU Internet - Search Engine 221% improvement by year end, as the median trailing

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twelve months EV/EBITDA valuation multiple software companies are still trading 20% below grew from 8.0x in 1Q09, a ten year low, to 12.8x the 10-year EV/EBITDA median of 16.0x (Figure in 4Q09 (Figures 5 and 6). Nevertheless, public 7). In 4Q02, shortly after the tech bubble burst, the median EV/EBITDA of the SEG Software Figures 5 and 6: SEG Software Index Key Index dropped to 10.2x, yet rebounded to 19.1x Statistics – Annually and Quarterly just one year later.

SEG - Software: Median Metrics Measure 2007 2008 2009 In 4Q09, software companies with revenue greater EV/Revenue 2.7x 1.9x 1.5x than $1 billion posted a median EV/EBITDA multiple EV/EBITDA 18.5x 12.5x 10.0x of 10.8x , while software companies with revenue EV/Earnings 29.0x 19.9x 20.5x between $100 million and $200 million were valued Current Ratio 2.0 1.9 1.9 at 15.5x EV/EBITDA (Figure 12). Sub-$100 million Cash & Eq ($M) $75.2 $76.9 $85.5 public software companies reported a median Gross Profit Margin 66.7% 66.6% 66.6% EV/EBITDA multiple of 11.9x in 4Q09. EBITDA Margin 13.8% 13.4% 15.3% Net Income Margin 7.5% 7.1% 5.5% TTM Revenue Growth 15.8% 14.0% 4.2% As in prior quarters, the highest EV/Revenue TTM Total Revenue ($M) $147.6 $179.9 $219.1 market valuations were awarded to those public TTM Total EBITDA ($M) $17.5 $21.5 $28.7 software companies that were also able to Debt / Equity Ratio 22.7% 26.5% 25.0% maintain impressive EBITDA margins, which is no SEG - Software: Median Metrics easy feat. An analysis of the 176 companies Measure 4Q08 1Q09 2Q09 3Q09 4Q09 comprising the SEG Software Index reveals the EV/Revenue 1.2x 1.2x 1.4x 1.7x 1.9x median EV/Revenue multiple of public software EV/EBITDA 8.4x 8.0x 9.5x 11.2x 12.8x companies with TTM EBITDA margins greater EV/Earnings 14.5x 14.2x 18.9x 24.5x 27.2x than 40% was an astounding ten times greater Current Ratio 1.9 1.9 1.9 1.9 2.0 Cash & Eq ($M) $79.6 $77.0 $78.9 $92.1 $94.7 than those with negative EBITDA margins (Figure Gross Profit Margin 66.9% 66.2% 66.7% 66.4% 67.1% 9). As for TTM revenue growth, the rule of thumb EBITDA Margin 13.2% 14.3% 15.3% 15.6% 15.1% in the current market environment is the higher a Net Income Margin 7.4% 5.1% 4.0% 4.6% 5.4% public software company’s TTM revenue growth, TTM Revenue Growth 13.6% 10.9% 5.5% 1.5% -2.7% the higher its trading multiple (Figure 10). TTM Total Revenue ($M) $199.1 $218.6 $224.1 $215.8 $221.4 TTM Total EBITDA ($M) $23.9 $27.1 $26.6 $29.2 $29.7 Debt / Equity Ratio 28.1% 23.0% 22.7% 26.4% 25.0%

Figure 7: SEG Software Index Historical EV/EBITDA and Median EBITDA 30.0x $35

$30 25.0x

$25

20.0x $20

$15 15.0x Median EV/EBITDA Median $10 Median EBITDA Median millions) ($ 10.0x $5

5.0x $0 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

SEG SW Index EV/EBITDA 10 Year Median EV/EBITDA: 16.0x Total Median EBITDA ($ millions)

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Figure 8: High Flyers – Enterprise Value/Revenue years, Baidu’s revenue skyrocketed from $17 million to $642 million, while its EBITDA margin 2009 High Flyers - Enterprise Value/Revenue Company Ticker Category EV/R swelled from 17.8% to 44.6%. Also boasting Baidu, Inc. BIDU Internet - Search Engine 23.2x impressive market valuation gains were Internet - eCommerce & Mercadolibre (12.4x EV/Revenue, a 183.7% YoY Mercadolibre, Inc. MELI 12.4x Portals increase in value) and SuccessFactors (7.0x Archipelago Learning, Education & Computer Based ARCL 12.2x Inc. Training EV/Revenue, a 175.9% YoY increase in value). SolarWinds, Inc. SWI Networking & Connectivity 11.7x Longtop Financial A word of caution about escalating public software LFT Financial Services Software 10.6x Technologies company market valuations: they’re tenuous and Internet - eCommerce & OpenTable OPEN 8.4x Portals highly dependent upon a continuing economic Internet - eCommerce & recovery. Should GDP growth falter, it’s very NetEase.com, Inc. NTES 8.3x Portals likely we’ll once again see shriking IT budgets, Storage & Systems VMWare VMW 7.9x little or no revenue growth, increased pressure on Management Software Health Care Management margins and falling public software company Athenahealth ATHN 7.4x Software stock prices. Ebix, Inc. EBIX Financial Services Software 7.3x PUBLIC SOFTWARE COMPANY FINANCIAL While most of the listed companies in our tracking PERFORMANCE indices saw improved EV/Revenue multiples in

2009, ten public software, SaaS and Internet Predictably, reduced IT spending by large companies defied the economic downturn and enterprises had a devastating impact on the top excelled at boosting their market valuations line growth of public software companies (Figure (Figure 8). Overall, these overachievers reported 6). The median trailing twelve month revenue an exceptional median EV/Revenue multiple of growth rate of companies comprising the SEG 2.7x at the close of 2009, in no small measure Software Index was in relative free fall during due to a year end TTM median revenue growth most of 2009, declining from +13.6% in 4Q08, to a rate of 39.9% and an impressive TTM median scant +1.5% in Q3 to -2.7% by year end (Figure EBITDA margin of 38.0%. 6). As we’ve noted in prior reports, there’s

typically a six to nine month lag between IT The ultimate overachiever was Baidu, often spending cuts and public software company referred to as “China’s Google”. Baidu’s median growth rate decline due to contractual obligations 4Q09 EV/Revenue of 23.2x, boosted by year- and previously allocated funds. The 2009 cycle over-year (YoY) revenue growth of 68.1% and an proved true to form. EBITDA margin of 42.3%, once again catapulted

the company to the top spot on our EV/Revenue With little ability to drive their top lines due to valuation list. Baidu has been a top ten dramatically reduced IT budgets, software EV/Revenue performer in every quarter since companies remained squarely focused on 2Q07, and for good reason. In the past five

Figures 9 and 10: EV/Revenue Multiple vs. TTM EBITDA Margin and Revenue Growth Rate

8.0x 5.0x

7.0x 7.0x 4.2x 4.0x 6.0x

5.0x 3.0x 2.6x 4.0x 2.4x

2.0x 3.0x 2.6x 1.5x Median EV / Revenue EV Median Median EV / Revenue Median 2.0x 1.2x 2.0x 1.0x 0.9x 1.0x 0.7x

0.0x 0.0x >40% >20% to 40% >10% to 20% >0% to 10% <0% >20% >10% to 20% >0% to 10% >-10% to 0% <-10% TTM EBITDA Margin TTM Revenue Growth

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Figure 11: Expected vs. Delivered Revenue and Make no mistake though, managing revenue EPS Results (as of December 31) performance while slashing expenses to maintain acceptable EBITDA margins and earnings per Company Revenue EPS Microsoft Corporation share was daunting, and proved too much for Cisco Systems, Inc. some. Despite conservative revenue and Oracle Corporation Company Revenues: earnings forecasts, it appears many public Google Inc. Greater than software companies underestimated the severity Adobe Systems Incorporated $1 billion Electronic Arts Inc. of the recession’s impact on both revenue and BMC Software, Inc. operating income, and especially related Mentor Graphics Corporation restructuring charges. According to our random Lawson Software, Inc. Jack Henry & Associates, Inc. Company sample of the Q4 earnings calls of 28 public Revenues: TIBCO Software Inc. software companies (Figure 11), only thirteen $500 million Avid Technology Inc. to $1 billion (46%) exceeded their most recent revenue and Open Text Corporation EPS projections; four (14%) beat their EPS NICE Systems Ltd. guidance to the Street; and only three beat both CSG Systems International, Inc. QAD Inc. their EPS and recenue projections. Websense, Inc. Company Revenues: MicroStrategy Incorporated $100 - $500 Most public software companies generated cash Quest Software Inc. million Blackboard Inc. and maintained strong balance sheets in 2009, no Rovi Corporation small feat in a major recession when many others American Software, Inc. are drawing down cash to subsidize operating Rainmaker Systems Inc. losses. SEG Software Index companies PDF Solutions, Inc. Company Revenues: Chordiant Software, Inc. increased their year-over-year cash and cash Less than SourceForge, Inc. $100 million equivalents by a median 11.2% in 2009 (Figure Pervasive Software Inc. 6), while maintaining a healthy median current NetSol Technologies Inc. ratio of 1.9, historically consistent with previous : Exceeded or Met Expectations years and quarters (Figures 5 and 6). : Did Not Meet Expectations The significant cash reserves and strong balance profitability in 2009, as they have in every prior sheets of most public software companies, downturn. Since variable expenses typically particularly the industry’s largest players, bode comprise 60% of a public software company’s well for small and mid-cap software companies, total operating costs, they have the flexibility to especially those that enable buyers to extend their respond quickly and aggressively to keep product offerings and capture new turf. expenses in line with declining revenues (Figure 5). They didn’t hesitate to do so in in this PUBLIC SOFTWARE COMPANY PERFORMANCE BY recession. As a result, the median TTM EBITDA PRODUCT CATEGORY margin of SEG Software Index companies increased to 15.3% in 2009 from 13.4% in 2008, While the median valuation and financial but slipped a bit in 4Q09 to 15.0% from 15.6% in performance of public software companies in out the third quarter. That could either be a sign the tracking index are useful for purposes of trend worst is behind us as buyers ramp up and analysis and comparison to other industry sectors, software providers prepare to respond or, a deeper analysis of these metrics by software conversely, that there’s nowhere left to cut. We’re product category highlights the diversity and confident it’s the former, but time will tell.

Figure 12: SEG Software Valuation and Financial Performance by Size of Buyer (TTM Revenue)

SEG Software Index Companies EV/Revenue EV/EBITDA 4Q09 4Q09 TTM EBITDA Rev Growth 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 Margin Revenue Greater Than $1 billion 1.8x1.8x2.2x2.0x2.8x7.2x7.4x8.7x7.9x10.8x-2.9% 24.1% Revenue Between $200 million and $1 billion 1.5x 1.7x 1.8x 1.4x 2.1x 10.7x 10.3x 11.4x 10.1x 12.6x 1.1% 18.2% Revenue Between $100 million and $200 million 1.2x 1.3x 1.5x 1.2x 2.1x 11.8x 9.8x 13.7x 9.4x 15.5x 2.7% 12.7% Revenue Less Than $100 million 0.6x 0.6x 0.8x 0.7x 1.0x 11.8x 5.4x 6.4x 6.4x 11.9x -7.2% 4.2%

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Figure 13: SEG Software Index Median Metrics by Category

SEG - Software: Median Metrics by Category YTD Revenue EBIT DA EBIT DA EV/Revenue EV/EBITDA Stock Grow th Grow th Margin Category Re tur n 4Q09 4Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 2009 (TTM) (TTM) (TTM) Infrastructure Software Database & File Management 1.4x 1.3x 1.4x 1.6x 2.1x 7.6x 7.2x 7.8x 7.7x 8.7x -1.3% 18.5% 22.9% 38.4% Development Tools, Operating Systems & 1.1x 0.8x 1.2x 1.4x 1.3x 6.4x 5.6x 8.3x 9.7x 12.8x -4.2% -0.1% 16.6% 54.3% Application Testing Softw are eCommerce Softw are 2.3x 2.4x 3.0x 3.0x 2.6x 22.1x 16.5x 20.4x 19.4x 18.4x 7.9% 44.7% 14.1% 46.3% Enterprise Application Integration 1.2x 1.1x 1.4x 2.1x 2.1x 6.3x 6.8x 7.7x 11.3x 9.6x -3.6% 15.4% 20.5% 75.2% Messaging, Conferencing & Communications 0.6x 0.6x 0.9x 1.4x 1.6x 6.8x 5.7x 8.2x 8.6x 8.1x 4.2% 0.8% 12.4% 48.3% Netw orking & Connectivity 1.5x 1.9x 1.7x 2.0x 2.2x 12.4x 8.1x 8.0x 10.8x 13.7x 0.7% 54.4% 20.5% 69.6% Security 2.3x 2.0x 2.4x 3.4x 3.3x 13.1x 11.6x 11.3x 12.8x 13.8x 8.5% 28.8% 16.5% 38.0% Storage & Systems Management Softw are 1.5x 1.5x 1.6x 2.1x 2.4x 7.4x 8.5x 9.8x 11.0x 13.8x -0.3% -4.7% 18.0% 47.5% Wireless 1.5x 1.4x 0.9x 1.0x 1.3x 11.1x 11.0x 11.7x 13.6x 14.8x -10.2% 26.2% 7.9% 38.6% Infrastructure Softw are Median: 1.5x 1.4x 1.5x 2.1x 2.2x 8.4x 8.4x 9.7x 10.8x 12.7x 2.1% 16.0% 16.7% 48.3% Application Softw are Billing & Service Management 1.0x 0.9x 1.1x 1.3x 1.4x 5.2x 4.7x 5.5x 6.6x 6.4x -1.0% 2.5% 17.3% 33.4% Business Intelligence 1.1x 1.1x 1.5x 1.9x 2.4x 6.4x 7.1x 8.5x 10.6x 12.9x -0.5% 25.5% 17.0% 104.7% Content/Document Management 1.4x 1.6x 1.6x 1.7x 1.7x 5.4x 5.2x 6.5x 6.8x 7.4x -11.6% 12.3% 23.0% 72.8% Customer Relationship Management, Marketing & 0.5x 0.4x 0.5x 0.7x 0.6x 17.2x 25.7x 51.0x 15.5x 17.1x -17.2% -18.0% -3.0% 41.4% Sales Softw are Education & eLearning 1.5x 1.2x 2.2x 2.1x 1.8x 12.0x 9.4x 13.5x 17.4x 14.1x 11.7% 120.4% 16.6% 49.7% Electronic Design Automation 0.7x 0.8x 0.9x 1.1x 1.4x 7.2x 16.6x 9.1x 9.7x 9.6x -17.5% -131.4% -2.3% 70.8% Engineering, PLM & CAD/CAM Softw are 1.1x 1.1x 1.4x 1.6x 1.7x 6.8x 5.7x 7.8x 12.3x 13.3x -13.8% -47.1% 12.2% 58.1% Enterprise Resource Planning 1.2x 1.0x 1.1x 1.4x 1.5x 8.7x 8.6x 9.0x 9.9x 9.7x -9.0% 10.5% 17.3% 40.3% Entertainment 1.3x 0.7x 1.0x 1.0x 1.0x 2.6x 4.4x 4.9x 8.1x 6.6x -5.2% 12.9% 22.4% 88.5% Financial Services Softw are 2.0x 1.8x 2.1x 2.3x 2.5x 9.7x 8.2x 10.6x 11.3x 11.1x 2.1% 8.7% 19.3% 29.8% Healthcare 1.8x 1.7x 2.4x 2.4x 2.6x 12.5x 10.4x 13.7x 15.2x 17.7x 8.9% 21.4% 20.3% 45.3% Multimedia, Graphics, Digital Media 1.0x 1.5x 1.8x 2.0x 2.5x 8.4x 9.0x 8.2x 13.1x 17.9x -13.3% -18.2% 11.6% 45.8% Supply Chain Management & Logistics 0.9x 0.9x 1.1x 1.2x 1.5x 5.5x 8.5x 9.7x 9.8x 13.0x -8.9% 39.9% 11.3% 55.1% Application Softw are Median: 1.1x 1.1x 1.4x 1.7x 1.7x 8.1x 7.7x 9.5x 11.0x 12.1x -3.5% 9.0% 15.6% 55.4% disparateness of the software ecosystem. By industry median EV/Revenue for more than two analyzing how public software companies in years, signaling a distinct lack of investor discrete product categories are performing, we enthusiasm for providers in this category. Still, increase our understanding of market trends, the median EV/Revenue multiples for this and all product category lifecycles, M&A trends, IT other software product categories we track, spending priorities and stock market behavior. except Wireless and Entertainment, have increased year-over-year. As we’ve noted in past reports, public software company valuations each quarter vary widely by Interestingly, there seemed to be little correlation product category, and median multiples for the in 4Q09 between a product category’s median same category often fluctuate wildly from year-to- EBITDA growth and its year-to-date stock return. year. That axiom held true, once again, in 2009 Public Education and eLearning software (Figure 13). companies grew median TTM EBITDA aggressively (120.4% YoY), but reported a Security software had the highest market median 2009 stock gain of 49.7% over their valuation among all software categories in 4Q09. January 2 opening prices. Conversely, public The 3.3x median EV/Revenue multiple of security software companies comprising the Electronic software providers was buoyed by stellar Design Automation category saw median TTM valuations for Check Point Software (6.7x), EBITDA decline 131.4% in 4Q09 from 4Q08, yet Sourcefire (5.2x), Commtouch Software (4.7x) saw their median 2009 stock return increase and ArcSight (4.6x). By contrast, traditional (i.e., 70.8% from January 2. perpetual license, non-SaaS) CRM companies bore the stigma of the lowest EV/Revenue We noted the inconsistencies among product multiple (0.6x) of any software product category. categories as they relate to EBITDA growth and The median valuations of these traditional CRM stock performance, and decided to analyze providers have been well below the software further. First, it’s likely investors were more

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Copyright © 2010 Software Equity Group, L.L.C., All Rights Reserved Software Equity Group, L.L.C. Investment Banking / Mergers & Acquisitions focused on future returns, fearing education Figures 14 and 15: SEG SaaS Index Key budget cuts due to funding cuts, while anticipating Statistics – Annually and Quarterly an enterprise refresh cycle in PC and device SEG - SaaS: Median Metrics orders. Second, public companies comprising our Measure 2007 2008 2009 Education and eLearning category are relatively EV/Revenue 6.4x 3.2x 2.6x small, with a median TTM revenue of $103 EV/EBITDA 59.6x 43.9x 31.4x million. By comparison, the median TTM revenue EV/Earnings 82.2x 82.9x 99.4x of companies in the Electronic Design Automation Current Ratio 1.6 1.9 1.6 category is $808 million, providing far more Cash & Eq ($M) $53.3 $79.9 $92.0 Gross Profit Margin 68.2% 67.7% 68.0% resiliency in tough times. For many investors in EBITDA Margin 5.0% 3.4% 6.7% the current economy, size trumps EBITDA growth Net Income Margin -1.0% -1.2% -3.0% (Figure 12). TTM Revenue Growth 45.9% 41.4% 26.0% TTM Total Revenue ($M) $86.9 $114.5 $143.9 Investors appeared to give Business Intelligence TTM Total EBITDA ($M) $3.3 $3.7 $9.4 providers a second chance, seeing the product Debt / Equity Ratio 0.8% 0.2% 0.2% category as ripe for rebound in 2009 after their SEG - SaaS: Median Metrics punishing selloff in 2008 (-61.0%). BI posted a Measure 4Q08 1Q09 2Q09 3Q09 4Q09 median end of year stock price increase of EV/Revenue 2.0x 1.9x 2.5x 2.7x 3.1x 104.7%, leading all other categories in median EV/EBITDA 25.0x 21.1x 44.7x 36.9x 38.8x stock price gain. Among the most noteworthy EV/Earnings 39.2x 57.1x 51.2x 70.9x 98.9x Current Ratio 1.6 1.4 1.4 1.5 1.6 market performers in 2009 (Jan 2 open - Dec 31 Cash & Eq ($M) $78.5 $82.9 $78.2 $91.8 $93.0 close) were Pegasystems (175.1%), Gross Profit Margin 68.3% 67.0% 67.9% 67.2% 68.0% MicroStrategy (153.2%) and Datawatch (120.8%). EBITDA Margin 3.7% 2.6% 2.6% 4.3% 6.7% Net Income Margin 2.4% -5.0% -4.8% -4.3% -2.1% TTM Revenue Growth 35.5% 31.5% 23.0% 20.8% 14.9% PUBLIC SOFTWARE AS A SERVICE (SAAS) TTM Total Revenue ($M) $126.3 $139.6 $147.7 $154.2 $147.2 COMPANY MARKET VALUATIONS AND FINANCIAL TTM Total EBITDA ($M) $3.7 $4.2 $4.3 $8.3 $10.5 PERFORMANCE Debt / Equity Ratio 0.5% 1.0% 0.8% 0.8% 0.2%

The economic downturn, reduced IT spending, 2009, the median SaaS EV/Revenue multiple had shifting SMB priorities and slower than anticipated dropped to 3.1x vs. 1.9x for on-premise software enterprise adoption of SaaS, all took their toll on companies, narrowing the differential valuation public SaaS providers in 2009. By the close of premium to 63%. Eight of the seventeen the year, the annual median TTM revenue growth companies in the SEG SaaS Index were trading rate of public SaaS companies had plummeted to at year end 2009 at or below a market valuation of 26.0% from 41.4% a year earlier (Figures 14 and 3.0x EV/Revenue. 15). It was the ninth consecutive quarterly decline in SaaS revenue growth since 3Q07, and the Should there still be any doubt about whether the downward trajectory appears to be steepening. public markets value SaaS providers more on the The SaaS growth rate dropped steadily basis of revenue growth than profitability, it should throughout 2009 before hitting a low of 14.9% by be noted that SaaS companies with TTM revenue year end. Only four of seventeen SaaS growth rates higher than the 26% group median companies (Medidata Solutions, Constant commanded a median 4.3x EV/Revenue multiple, Contact, SuccessFactors and Athenahealth) had compared to a median 2.5x EV/Revenue multiple achieved greater than 25% TTM revenue growth for SaaS companies with lower TTM revenue at year end. growth rates (Figure 16). By comparison, SaaS companies with EBITDA margins higher than the The market responded accordingly to the sharp group median trade at a median 3.1x EV/Revenue decline in public SaaS company revenue growth, multiple vs. a median 3.2x EV/Revenue multiple and valuations plummeted. To provide historical for SaaS companies with EBITDA margins lower perspective, at the close of 2007, public SaaS than the group median. Clearly, revenue growth companies commanded a median EV/ Revenue continues to trump EBITDA from a SaaS valuation multiple of 6.4x, compared to 2.7x for their standpoint, even in today’s earnings driven perpetual license/on-premise counterparts - a market. 137% SaaS valuation premium. By the close of

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Figure 16: 4Q09 Public SaaS Company Revenue their traditional counterparts at a time investors Growth Rate and EBITDA Margin vs. Revenue refocused on profit in lieu of top line growth. The Multiple stratospheric pre-recession valuations of SaaS

5.0x companies reflected irrational exuberance among investors and analysts about the rate of SaaS 4.3x adoption among small-medium businesses TTM 4.0x revenue (“SMB”) and large enterprises alike. That said, growth rate > there’s still a good deal of low hanging fruit ripe 3.1x 3.2x SEG SaaS for the picking, primarily in the SMB market, and a 3.0x TTM Index TTM EBITDA Median 2.5x EBITDA good deal of pent-up demand. We believe 2010 margin < margin > TTM SEG SaaS SaaS revenue growths will return to 30% - 35% in SEG SaaS 2.0x revenue Index Index 2010 as the economy recovers, and public SaaS growth Median

Median EV/Revenue Median rate < companies will be rewarded with markedly higher SEG SaaS 1.0x Index market valuations. Median We continue to believe enterprise adoption of 0.0x SaaS will lag analyst forecasts, as CIOs continue to wrestle with concerns about security and back That said, we do believe profitability will become office application integration. As a result, behind more important to SaaS providers and investors the firewall mission-critical enterprise applications over time. And while profitability remains elusive will garner the bulk of carefully spent application for many public SaaS providers, the tide appears and infrastructure software dollars in 2010. to be turning for some who are beginning to reap the benefits of subscription renewals, operational PUBLIC INTERNET COMPANY MARKET improvements and reduced infrastructure VALUATIONS AND FINANCIAL PERFORMANCE spending. The median TTM EBITDA margin for the SEG SaaS Index was 6.7% in 4Q09, almost Though the software and Internet / eCommerce / twice that of a year ago. Only two profitable SaaS Web 2.0 sectors are rapidly converging, clear companies, DealerTrack and Kenexa, saw their distinctions remain between the two in terms of TTM EBITDA margin decrease from 4Q08 (Figure business model, revenue model, solution 17). Still, the median SaaS TTM EBITDA margin deployment and end user requirements. We've as of the close of Q4 is less than half the 15.0% opted to track these major categories separately median TTM EBITDA margin of the SEG Software to enable a more granular analysis of each. Index. Broadly defined, Internet companies are primarily It was predictable the Great Recession would internet based and their solutions are primarily – have a disproportionate impact on public SaaS often exclusively – web deployed. Our Internet companies since they were less profitable than Index is comprised of companies whose principal Figure 17: Public SaaS Companies

SEG SaaS Index EV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin Company Category 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 Athenahealth (ATHN) Health Care Mgmt 6.6x 7.5x 6.5x 7.2x 7.4x 60.1x 63.0x 50.6x 54.2x 56.2x 35.2% 38.5% 39.9% 41.5% 41.6% 11.0% 11.9% 12.8% 13.2% 13.2% Concur (CNQR) Accounting & Finance 5.5x 4.0x 5.0x 6.2x 6.6x 24.8x 17.6x 20.9x 25.0x 26.3x 66.9% 50.6% 35.5% 24.1% 14.9% 22.2% 22.5% 23.8% 24.7% 25.0% Constant Contact (CTCT) CRM 3.4x 3.4x 3.9x 4.6x 3.3x 159.4x 397.4x 335.4x 177.8x 66.8x 80.1% 72.8% 64.9% 57.2% 52.0% 2.2% 0.9% 1.2% 2.6% 4.9% DealerTrack (TRAK) Vertical - Automotive 1.0x 1.1x 1.7x 2.6x 2.5x 5.1x 6.7x 12.6x 25.0x 21.9x 13.7% 3.8% -5.0% -8.9% -8.7% 19.4% 16.4% 13.8% 10.2% 11.2% DemandTec (DMAN) SCM 1.8x 2.0x 2.0x 2.4x 2.3x -----30.1%22.4%15.8%10.9%10.9%-3.4%-2.4%-4.0%-5.0%-5.0% Kenexa (KNXA) Workforce Mgmt 0.6x 0.5x 0.9x 1.4x 1.4x 3.3x 2.9x 5.9x 10.7x 13.0x 21.0% 12.0% 3.4% -11.0% -20.7% 19.0% 17.3% 15.1% 12.6% 10.6% LivePerson (LPSN) CRM 0.8x 0.9x 1.5x 2.2x 3.1x 12.7x 11.7x 13.1x 15.3x 17.3x 56.8% 42.9% 32.8% 21.7% 14.6% 6.6% 7.5% 11.4% 14.3% 17.8% Medidata Solutions (MDSO) Clinical Mgmt - 0.0x 3.3x 2.5x 2.1x - 0.0x 102.4x 32.1x 16.6x - 69.8% 0.0% 0.0% 78.3% -41.4% -6.8% 3.3% 7.9% 12.6% Netsuite (N) ERP 2.7x2.6x3.8x4.4x5.1x-----47.2%40.5%33.9%25.5%15.5%-7.9%-7.7%-7.0%-6.9%-6.3% RightNow (RNOW) CRM 1.1x 1.1x 1.3x 2.1x 2.6x - - 63.4x 49.7x 38.8x 22.6% 25.3% 20.4% 13.0% 9.0% -4.8% -1.5% 2.1% 4.3% 6.7% Salary.com (SLRY)Workforce Mgmt0.3x0.3x0.5x0.8x0.8x-----35.9%28.1%23.0%20.8%17.2%-42.0%-43.3%-43.9%-37.9%-31.9% Salesforce.com (CRM) CRM 3.2x 2.8x 3.8x 4.5x 6.0x 37.8x 32.0x 38.8x 41.7x 51.3x 48.5% 43.8% 36.0% 29.0% 23.6% 8.4% 8.6% 9.8% 10.7% 11.8% SoundBite Communications CRM - - - 0.3x 0.3x 10.7x - - - 63.1x 17.7% 9.4% 1.6% -6.8% -8.3% -2.3% -2.7% -1.2% -1.0% 0.5% (SDBT) SuccessFactors (SFSF)Workforce Mgmt2.9x2.1x2.9x3.9x7.0x-----76.9%76.7%66.2%58.5%46.7%-78.7%-56.3%-39.3%-23.6%-10.4% Taleo (TLEO) Workforce Mgmt 1.3x 1.3x 2.2x 2.7x 3.6x 25.0x 21.1x 31.6x 30.9x 31.5x 32.4% 31.5% 33.7% 35.0% 26.0% 5.1% 6.0% 7.0% 8.6% 11.3% The Ultimate Software Group Workforce Mgmt 2.0x 1.8x 2.5x 3.3x 3.4x 54.3x 69.6x 94.6x 94.8x 63.5x 20.1% 17.9% 16.1% 15.0% 13.4% 3.7% 2.6% 2.6% 3.4% 5.4% (ULTI) Vocus (VOCS) CRM 3.5x 2.7x 2.5x 3.3x 3.0x 69.1x 49.3x 94.6x 94.8x 50.0x 35.9% 17.9% 16.1% 15.0% 13.5% 5.1% 2.6% 2.6% 3.4% 6.1% Median: 2.0x 1.9x 2.5x 2.7x 3.1x 25.0x 21.1x 44.7x 36.9x 38.8x 35.5% 31.5% 23.0% 20.8% 14.9% 3.7% 2.6% 2.6% 4.3% 6.7% 9| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

Figures 18 and 19: SEG Internet Index Key • Networking & Connectivity – Companies Statistics – Annually and Quarterly which provide content sharing, testing, measurement, and other related services via SEG - Internet: Median Metrics the Internet. Representative companies Measure 2007 2008 2009 EV/Revenue 2.5x 1.4x 1.2x include Internap Network Services, iPass, EV/EBITDA 18.8x 11.8x 10.0x Keynote Systems, and Sify Technologies. EV/Earnings 31.7x 20.0x 16.6x • New Media – Companies that provide online Current Ratio 2.7 2.2 2.4 information and content. Representative Cash & Eq ($M) $74.5 $67.1 $68.3 companies include TheStreet.com, WebMD Gross Profit Margin 59.9% 59.5% 60.1% and TechTarget. EBITDA Margin 14.5% 13.1% 10.2% • Search Engine – Companies include Net Income Margin 5.6% 3.9% 2.2% TTM Revenue Growth 19.1% 14.4% 2.9% Baidu.com, LookSmart, Sohu.com and Yahoo! TTM Total Revenue ($M) $126.4 $133.7 $135.9 TTM Total EBITDA ($M) $16.3 $15.9 $13.3 The SEG Internet Index fared similarly to the SEG Debt / Equity Ratio 20.7% 12.0% 15.7% Software Index in 2009 (Figure 3). The median 2009 and 4Q09 EV/TTM Revenue multiple for 59 SEG - Internet: Median Metrics public companies comprising the SEG Internet Measure 4Q08 1Q09 2Q09 3Q09 4Q09 Index was 1.2x and 1.3x, respectively, while the EV/Revenue 1.0x 0.9x 1.1x 1.3x 1.3x EV/EBITDA 7.2x 8.0x 9.7x 11.3x 10.8x median 2009 and Q4 Internet company EV/TTM EV/Earnings 13.4x 13.4x 15.5x 17.3x 21.5x EBITDA multiples were 10.0x and 10.8x, Current Ratio 2.2 1.9 2.1 2.4 2.6 respectively (Figures 18 and 19). The median Cash & Eq ($M) $62.7 $67.0 $64.1 $67.0 $77.0 current ratio, measured as current assets divided Gross Profit Margin 61.2% 58.1% 58.8% 59.7% 62.1% by current liabilities, an indication of a company’s EBITDA Margin 11.6% 9.7% 9.2% 11.1% 10.6% Net Income Margin 4.5% -1.5% 0.6% 2.6% 2.4% liquidity, was 2.6 in 4Q09, up from 2.2 in 4Q08, TTM Revenue Growth 16.2% 11.3% 5.0% 1.7% -1.0% suggesting many Internet /eCommerce providers TTM Total Revenue ($M) $132.3 $137.0 $135.9 $134.5 $137.0 controlled spending and eschewed, or couldn’t TTM Total EBITDA ($M) $15.9 $14.9 $13.5 $13.0 $12.6 get, additional debt financing. Indeed, the median Debt / Equity Ratio 16.5% 15.7% 22.0% 18.7% 10.8% cash and equivalents of these Internet providers business models fall within one or more of the increased by $14.3 million during that same following categories: period.

Nevertheless, Internet and Web 2.0 providers • Advertising – Companies that provide key were hard hit by the Great Recession. As a result elements in the Internet advertising arena such as search marketing services, software of sharply reduced consumer spending in the first three quarters, the median TTM revenue growth to host and manage ads and a network of rate of the SEG Internet Index moved into net loss websites that run ads. Representative territory, declining to -1.0% in 4Q09 from +16.2% companies include InfoSpace, SINA, and ValueClick. in 4Q08. The growth rate decline was almost identical to the sharp drop experienced by public • Communications – Companies that provide software companies. web-based communications, products, and

services. Representative companies include Enterprise valuations of companies comprising Delta Three, j2 Global Communications, and the SEG Internet Index varied widely by Internet EarthLink. category in 2009 (Figure 20). Internet Search • eCommerce & Portals – Companies whose Engine companies led all other categories main line of business is conducted over the throughout 2009, and posted an impressive 3.0x web. Representative companies include 1- EV/Revenue median valuation in 4Q09 and year- 800 FLOWERS.COM, Amazon.com, Bluefly, over-year revenue growth of 34.4%. Far less eBay and Expedia. impressive were Internet Networking and • Financial – Companies that provide online Connectivity companies, which posted a 0.8x financial services, content, and financial median EV/Revenue multiple and a median information resources. Representative revenue growth of just 3.2% over the same companies include Banks.com, Track Data, period. and Online Resources.

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Figure 20: SEG Software Index Median Metrics by Category

SEG - Internet Index

Revenue EBTIDA YTD EV/Revenue EV/EBITDA Gr ow th Gr ow th Stock Category (TTM) (TTM) Return

4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 4Q09 4Q09 2009 Advertising 0.8x 0.7x 0.8x 1.1x 0.9x 7.9x 7.6x 7.5x 11.3x 14.0x -5.2% 2.8% 71.6% Communications 0.9x 0.8x 0.9x 0.9x 1.3x 4.2x 4.1x 4.0x 4.8x 5.4x -8.8% -12.5% 22.9% eCommerce & Portals 0.9x 1.1x 1.6x 2.2x 1.9x 7.0x 7.1x 12.3x 15.3x 13.8x -3.4% 5.9% 36.6% Financial 1.7x 1.6x 1.8x 1.5x 1.2x 9.0x 8.8x 12.1x 12.4x 10.1x -2.0% -6.6% 7.4% Networking & Connectivity 0.4x 0.4x 0.5x 0.9x 0.8x 9.3x 3.4x 6.4x 6.6x 10.1x 3.2% 48.4% 27.3% New Media 1.3x 0.8x 1.5x 1.3x 1.4x 9.2x 7.2x 12.1x 16.4x 17.0x 10.3% 45.5% 61.6% Search Engine 4.0x 3.2x 3.2x 3.3x 3.0x 11.4x 10.9x 13.7x 13.2x 14.1x 34.4% 7.6% 37.5%

INITIAL PUBLIC OFFERINGS Most of those who invested in 2009’s new issues neither fared poorly nor reaped big rewards. The Globally, $57.7 billion was raised by 218 IPOs on median new issue on major U.S. stock exchanges all major exchanges in 2009, compared to $62.2 was up 1.1% in 2009, a significant improvement billion raised by 255 IPOs in 2008. Asia-Pacific over 2008’s year end median -37.3% IPO return. accounted for more than half of the IPOs worldwide, with China garnering the lion’s share The domestic software IPO market showed signs (53). Of the top 20 IPOs worldwide, 14 were from of life in 2009 after a near-death experience in emerging markets. There were 66 IPOs on the 2008 (Figure 21). In the fourth quarter, Toronto Stock Exchange and the TSX Venture Archipelago Learning (NASDAQ: ARCL) joined market in 2009 that collectively took in $1.7 billion, the ranks of 2009’s five prior software company a 73.7% increase from the $978.7 million raised in IPOs. Together, these six new public software 2008 from 130 new offerings. companies touted a median TTM revenue growth rate of 26.7% and a median TTM EBITDA margin Domestically, across all industry sectors, 76 of 27.1%. The six software companies raised companies went public on the major U.S. stock $891.3 million collectively, a respectable showing, exchanges in 2009, compared to 51 in 2008 and all things considered. 266 in 2007. Of these 76 new offerings in 2009, only 22 listed in the first six months of the year. 2009’s software IPOs hinted at pent-up investor Together, 2009’s 76 IPOs raised $19.3 billion, a demand due to low interest rates and way too 31.3% shortfall from 2008’s $28.1 billion tally. much uninvested cash and capital. This time However, if Visa’s 2008 IPO proceeds of $17.9 around, however, investors were focused and billion are excluded from the calculation, the total disciplined, insisting on a track record of revenue IPO dollars raised in 2009 increased 89.2% year- growth and earnings. As a result, and despite the over-year. We believe this is a more accurate success of 2009’s six successful IPOs, the U.S. representation of investor receptivity and current software IPO pipeline narrowed further in Q4, with valuations. only one S-1 filing (Figure 22). Mobile resource Figure 21: 2009 U.S. Software IPOs

Offering Enterprise EV / EV / First Day YTD Company Category IPO Date Amount Value Rev EBITDA Return Return Rosetta Stone, Inc. (NYSE: RST) Education Software 4/16/09 $115,000,000 $580,600,000 2.6x 14.1x 39.6% -28.5% DigitalGlobe (NYSE:DGI) Geospatial Information Software 5/14/09 $279,300,000 $1,048,200,000 3.8x 6.5x 13.2% 12.6% SolarWinds, Inc. (NYSE: SWI) Network Software 5/20/09 $250,000,000 $1,123,200,000 11.6x 25.2x 10.0% 67.3% Medidata Solutions, Inc. Clinical Development Software 6/25/09 $86,250,000 $405,700,000 3.4x 105.3x 21.4% -8.1% (NASDAQ: MDSO) CDC Software Corporation ERP/SCM/CRM 8/6/09 $57,600,000 $312,467,000 1.5x 8.3x -16.8% -3.3% (NASDAQ:CDCS) Archipelago Learning, Inc. Education Software 11/19/09 $103,130,000 $523,850,000 12.3x 34.0x 13.8% 10.3% (NASDAQ:ARCL) Median: $109,065,000 $552,225,000 3.6x 19.7x 13.5% 3.5% *Enterprise Value and associated multiples as of offering date. *First day return compares listed offering price to first day close. *Bold denotes pure play SaaS companies. 11| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

Figure 22: U.S. Software IPO Pipeline

TTM Filing Offering Annual Net Company Category Revenue Date Amount Revenue Income Growth Content/Document Syngence Corporation (TBD) 11/15/07 $12,000,000 $2,703,000 -$2,253,000 -26.6% Management Multimedia, Graphics, Digital Domain (NASDAQ: DTWO) 12/11/07 $78,000,000 $77,800,000 -$19,910,000 16.1% Digital Media Mobile Resource TeleNav, Inc. (NASDAQ: TNAV) 10/30/09 $75,000,000 $110,880,000 $29,618,000 130.7% Management *Bold denotes pure play SaaS companies. Median: $75,000,000 $77,800,000 -$2,253,000 16.1% management provider TeleNav joined the IPO 45.1% fewer than were funded during the prior waiting list touting 130.7% TTM revenue growth twelve month period. and a 39.9% EBITDA margin. Software companies dropping out of the IPO queue were Series A investments, one of the most important ExactTarget (withdrew registration), Gomez software industry bellwethers, plummeted a (acquired by Compuware) and OpenLink stunning 53.7%, from $7.0 billion to $3.3 billion. Financial (withdrew registration). Using 2002 as the base year, total annual VC dollars invested and total annual fundings have Of the companies remaining in the IPO pipeline, fallen 26.6% and 16.6%, respectively. Exits of we believe TeleNav will be well received, given its VC-backed companies, a catalyst for future VC impressive revenue growth and profitability. investment activity, also declined in 2009 from a Conversely, IPO aspirants such as Digital Domain year earlier. According to the NVCA, only 262 and Syngence will most likely have to shore up venture-backed companies sold in 2009, their financial performance or let their filings compared to 348 a year earlier. There was a lapse. Figures 23 and 24: Aggregate VC Dollars and How will the software IPO market fare in 2010? Number of VC Investments by Company Stage

Given the current economic climate, it’s Aggregate VC Dollars Invested by Company Stage impossible to conjecture. Still, a case can be made that if the economy continues to recover $1,614M and the market indices respond in kind, pent-up $6,288M $4,187M investor demand could create a much improved environment for software IPOs - especially for $5,860M those on the waiting list or prospective entrants with demonstrated market appeal and profitability. In such case, we are forecasting 12 – 15 software IPOs in 2010, and a host of new filings. Startup/Seed Early Stage Expansion Later Stage VENTURE CAPITAL INVESTMENT

Venture capital investments across all industry Aggregate Number of VC Investments by Company Stage sectors declined in 2009 from a year earlier. According to the PricewaterhouseCoopers / 295 848 Thompson Venture Economics / National Venture 839 Capital Association MoneyTreeTM Survey, there were 2,814 VC equity financings across all 832 industry sectors in the U.S. during the trailing four quarters through 3Q09, a 32.2% drop from the prior 12 month period. Total dollars invested fell a whopping 40.7%, from $30.2 billion to $17.9 Startup/Seed Early Stage billion a year earlier, and the average investment Expansion Later Stage declined 12.5%, from $7.3 million to $6.4 million. Only 721 companies received first-time funding,

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bright spot, however - venture-backed IPO’s Software companies receiving first-time financing increased from 6 in 2008 to 13 in 2009. fell 42.1% to 154 from 266 last year, and the average Series A investment decreased 16.6%, Across all industry sectors, VCs were less from $3.9 million to $3.3 million. risk/reward oriented, funding fewer seed stage companies (-43.9%) with markedly fewer dollars In terms of company lifecycle stage, the same VC in 2009 (-8.0%) year-over-year. VC investments biases applied to the software sector as the in expansion stage companies, perceived by VCs broader market (Figures 25 and 26). Of $3.0 to be safer bets in prior years, decreased 35.8% billion invested by VC’s in the software sector, in number of companies funded, and 48.1% in $116 million, or 3.9%, went to fund 34 aggregate amount funded. Later stage startup/seed stage deals. That translates to companies receiving equity financing in this same 64.2% fewer software startup/seed stage time period decreased 32.5% in 2009 from a year companies funded in 2009, and a 58.1% year- earlier, and dollars invested declined 45.4%. over-year reduction in dollars invested. Consistent with historic norms, expansion and Expansion and later stage companies accounted later stage companies continued to garner the for 66.2% of the total number of software lion’s share of the fewer dollars invested in 2009, companies financed, and 72.5% of the total VC receiving 67.7% of all VC investments on a TTM dollars invested in software. basis as of 3Q09, down slightly from a year earlier (Figures 23 and 24). Those software providers lucky enough to receive some of the relatively few VC dollars invested in While the number of software companies financed 2009 used the funds to bolster sales and in 2009, at 648, was down from the prior year, the marketing, accelerate research and development number of software companies funded by VCs efforts, expand geographically and selectively exceeded that of any other industry sector. acquire smaller companies. One example is Software companies raised $3.0 billion (-45.4% SaaS provider Service-now.com, which is using year-over-year), yielding an average investment the $66 million Series C proceeds raised in per company of $4.6 million. By comparison, 402 November 2009 to ramp up sales and marketing biotech companies (-22.2%) received $3.6 billion and build additional infrastructure. (-21.1%), yielding an average investment of $8.9 million, and 604 Internet/Web 2.0 companies received $2.9 billion, a 47.8% decrease from 2008.

Figures 25 and 26: Software VC Dollars and Number of Software VC Investments by Company Stage

Software VC Dollars Invested by Company Stage ($ millions) Software VC Investments by Company Stage $3,000 400 376 371 337 $2,488 350 327 $2,500 311 299 301 $2,136 300 $2,073 $2,068 $2,025 $1,965 $2,047 286 $2,000 250 $1,861 250 245 226 203 203 $1,500 200 185 $1,198 176 $968 150 $1,000 $951 $864 $705 95 $608 $666 100 67 69 $500 55 $276 $184 $184 50 $79 $116 34 $0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Startup/Seed Early Stage Expansion Later Stage Startup/Seed Early Stage Expansion Later Stage

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THE BUYERS SPEAK: SOFTWARE EQUITY GROUP’S 2010 M&A SURVEY

Software Equity Group conducted its inaugural M&A buyers survey in January 2009 to better assess the coming year and what it portended for both buyers and prospective sellers. We polled 203 of the largest software companies in North America, both public and private, and received an excellent response. Last year’s survey provided proprietary insight into buyer motives and drivers, valuation expectations and deal activity that proved to be remarkably accurate.

In early January 2010, we polled 226 public software companies, asking additional questions about their 2010 M&A plans, motives, budgets, priorities and psyche. And this year, we received an even greater response. Collectively, these companies comprise the industry’s most active acquirers of software companies, and their strategies and playbook will heavily influence software M&A in the year ahead. As evidence, the respondents to our 2010 survey collectively spent $12.3 billion on software acquisitions in 2009, and that figure represents only publicly reported deal values. The final tally is considerably higher.

Unsurprisingly, 72% of our respondents bought at least one software company in 2009, but stayed close to home, focusing on strategic acquisitions. Buyers remained focused on transactions that leveraged and enhanced their core businesses, acquiring tuck-ins and eschewing bargain shopping and unsought opportunities. Their M&A behavior in this regard was consistent with their responses to our 2009 survey, and reflected the tough economic times and declining growth rates most were experiencing.

What lies ahead? The number of software M&A transactions will almost certainly grow this year, as 97% of respondents stated they plan to acquire at least one software company in 2010. Even better, 53% of this year’s survey respondents stated they plan to acquire three or more software companies in 2010, as compared to the 34% of 2009’s survey respondents that actually acquired three or more software companies last year.

And what’s motivating these buyers? In many ways, the M&A drivers in 2010 are broader than last year, when 75% of respondents were focused on tuck-ins and bolt-ons. In 2010, respondents seemed almost evenly divided when identifying their primary acquisition objectives, with 28% seeking inorganic revenue growth/earnings accretion; 31% seeking greater market share through consolidation, SaaS forays, etc; and only 24% focused on tuck-ins. Look for many buyers to venture further afield this year in a quest for a greater share of their customers’ IT budget.

Software M&A spending is expected to be robust in 2010, with 62% of respondents expecting to spend at least $100 million on software acquisitions this year. Valuations should also see an uptick. 70% of respondents expect to pay at least 10% more in 2010 for a company very similar to one acquired in 2009. What does this equate to? The companies that responded to our 2010 survey paid a median 2.0x TTM revenue for software acquisitions in 2009, which suggests a conservative estimate for 2010’s median exit multiple is 2.2x TTM revenue. But what about the 30% of respondents who indicated they’d pay the same in 2010 vs. 2009? They’re to be forgiven; they paid a whopping median 4.1x TTM revenue for their software acquisitions in 2009.

(continued)

THE BUYERS SPEAK: SOFTWARE EQUITY GROUP’S 2010 M&A SURVEY

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THE BUYERS SPEAK: SOFTWARE EQUITY GROUP’S 2010 M&A SURVEY (CONTINUED)

Given all the hype and media attention surrounding SaaS, one might suspect buyers would be equally attracted to acquiring the perceived benefits of SaaS: substantial recurring revenue, SMB penetration, high adoption rates, painless upgrades, etc. Not so. Only 3% of respondents deemed SaaS an absolutely essential target requirement. Almost half (47%) of all respondents indicated the delivery model makes no difference when prioritizing acquisitions. The lesson: while SaaS M&A premiums continue to exist, it’s not every public software company’s cup of tea.

What, then, makes a company worth 3.0x – 5.0x TTM revenue in the eyes of a potential acquirer? The answer may surprise you. 52% of our respondents identified synergy and timing as the most important M&A driver for them in 2010 when buyers are prioritizing acquisitions and valuing targets, 31% more than the next driver (incremental revenue). In fact, 76% of our respondents ranked synergy and timing either first or second. Exit multiples that make headlines occur because a buyer wants the target’s products/technology now to fulfill a strategic objective. The target’s revenue growth and profitability are, of course, factored in, but they’re not the primary reason public buyers acquire a software company.

Finally, we wanted to better understand the implications of missing the boat when buyers in a particular product category place their bets elsewhere after a rapidly growing, best-of-breed ISV rejects their advances. Will buyers replace the products of a prior acquisition with the better products of the ISV once it’s amenable to sale? In our experience, many ISVs believe so, but they’re usually wrong. 70% of our respondents told us they never or very rarely do so; 30% do so occasionally.

It’s clear from our survey that buyers fully intend to be considerably more acquisitive in 2010, to pay a bit more and to venture further from home. Thus far, as we go to press, that certainly appears to be the case. We’ll detail that more in our 1Q10 Quarterly Report.

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Software Equity Group's 2010 Software M&A Outlook Survey

Approximately how many software companies did you acquire in 2009? Response % 0 28% 1-2 38% 3-5 25% 6-10 6% More than 10 3%

What was the primary M&A driver for your 2009 acquisitions? Response %

Strategic: We remained focused on our core business, enhancing our product suites, expanding our market reach, etc. 79%

Opportunistic: We encountered unexpected opportunities for consolidation and/or expansion 11% Financial: Valuations of targets were just too good to pass up; inorganic revenue growth 7% Other 4%

If you had to guess now, how many software companies do you anticipate acquiring in 2010? Response % 0 3% 1-2 44% 3-5 38% 6-10 6% More than 10 9%

Please rank in order of importance (1=most important, 4=least important) your acquisition objectives in Ranking 2010: 1234 Financial: Inorganic growth and/or earnings accretion 29% 9% 26% 35% Product Enhancement: Plug holes, add functionality, improve user experience 21% 32% 15% 32% Market Expansion: Add new product categories, enter new markets, expand territories 21% 26% 41% 12% Strategic: Consolidation, channel acquisition, SaaS exploration, meet/beat our competition 29% 32% 18% 21%

In aggregate, about how much do you plan to spend on acquisitions in 2010? Response % Less than $100 million 38% Between $100 million and $300 million 34% Between $300 million and $500 million 7% Between $500 million and $1 billion 17% Greater than $1 billion 3%

What's your current view of valuations? How much would you expect to pay in 2010 for a company very Response % similar to the one you acquired in 2009? The same 30% Less 0% 10% to 20% more 60% 21% to 30% more 7% 31% to 40% more 3% Greater than 40% more 0%

How important is it for you in 2010 that the target be all or substantially SaaS/subscription based? Response % Unimportant 47% Somewhat 38% Very 13% Absolutely essential 3%

When prioritizing your acquisitions and valuing targets, please rank the following M&A drivers in order of Ranking importance (1=most important, 4=least important): 1234 Synergy and Timing: We need/want the target's products/technology now to fulfill a strategic objective 52% 24% 15% 9% Growth: The target is growing at a rate far greater than average, demonstrating strong market demand, and we want to ride that 21% 30% 39% 10% wave and drive revenue Profitability: The target is highly profitable, apparently well run, and the deal will be accretive 21% 12% 27% 39% Management and Operations: Great team, proven performers, deep domain expertise 6% 33% 18% 42%

How often have you replaced an internally developed or previously acquired application or technology by Response % later acquiring a company with a much superior application or technology? Never 17% Very rarely 53% Occasionally 30% Frequently 0%

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Figure 27: U.S. Merger & Acquisition Activity

16,000 $1,679B $1,800 $1,550B

12,586 $1,500 $1,273B 11,769 12,000 11,254 Value ($ billions) 9,941 $1,200 9,585 9,043 9,296 $1,095B 7,762 8,000 $900 $764B 7,219 $904B

Number ofDeals $776B $525B $550B $600

4,000

$300

0 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Deals Value Source: Capital IQ

MERGERS AND ACQUISITIONS: THE NUMBERS

M&A Deal Volume and Spending: All Industry from 2,049 deals in 1Q09 to 2,840 deals in 4Q09, Sectors an increase of 38.6%.

Global merger and acquisition spending totaled Total M&A spending across all U.S. industry $3.2 trillion dollars in 2009 according to Capital sectors, however, was particularly volatile in 2009. IQ, a 14.0% year-over-year decline from 2008’s M&A spending in Q1 totaled $270.5 billion, but $3.7 trillion. However, worldwide M&A spending plummeted to $117.0 billion in 2Q09. To be fair, increased sharply in 4Q09 to $928.6 billion, a 1Q09’s M&A spending was largely boosted by 37.0% increase over 3Q09’s $677.7 billion. three megadeals: Roche Holdings – Genentech Nevertheless, a good number of buyers were ($110.1 billion), Pfizer – Wyeth ($66.8 billion) and unable to raise the requisite financing, while many Merck – Schering-Plough ($40.1 billion). 4Q09 targets perceived the offers to be opportunistic M&A spending totaled $252.7 billion and closed and inadequate. Some 419 deals worth $50.1 out the year on an encouraging note as we billion were scrapped or rejected in 2009, headed into 2010. including Aluminum Corporation of China’s $11.8 billion bid for Rio Tinto’s mining assets, and CVC We anticipate 2010 M&A deal volume and M&A Capital Partner’s $6.5 billion bid for Barclay’s spending across all U.S. industries will continue to iShares business. improve, but will not reach 2008 levels. Consolidation to acquire greater market share, In the U.S., M&A transaction volume across all vertical integration to achieve financial and industry sectors aggregated 9,585 deals, with a distribution efficiencies, a quest for new markets combined price tag of $776.2 billion, down 14.8% and product lines, and higher target valuations will from 2008’s 11,254 deals, and 29.1% below all drive deal volume in 2010. As our survey 2008’s total M&A spend of $1.1 trillion (Figure 27). results noted, larger buyers are prepared to ramp The year’s trend line, however, gave cause for up their acquisition activity in 2010, and expect to guarded optimism. Analyzed quarterly, U.S. M&A pay modestly more than in 2009. But just how transaction volume in 2009 grew each quarter, much smaller buyer purse strings will loosen

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largely depends on the cost and availability of Figures 28 and 29: U.S. Software Sector M&A financing, how receptive seller shareholders are Activity and Dollars Spent by Year to buyer stock and a host of other factors. 2500

1,894 U.S. leveraged buy-outs and private equity 2000 backed transactions remained lackluster in 2009, 1,758 1,723 following the credit market meltdown in 2008. 1500 According to Capital IQ, there were just 989 buy- 1,271 outs in 2009, down from 1,269 deals in 2008. 1000 # of Deals Aggregate U.S. LBO spending inched up to $67.0 500 billion in 2009 from $65.4 billion in 2008, although Berkshire Hathaway’s $34.1 billion bid for 0 Burlington Northern Santa Fe accounted for 2006 2007 2008 2009 50.9% of 2009’s total. Without Burlington, 2009’s average deal size was $33.3 million, compared to $100.0 $51.5 million a year earlier. There were only four $81.9 leveraged buy-outs greater than $1 billion in 2009, $80.0 compared to 17 in 2008. $57.7 $56.2 $60.0 LBO valuations reflected the mood of the times; $31.9 private equity firms were selective, discerning and $40.0 tight fisted in 2009, even when acquiring profitable ($ billions) $20.0 companies. Targets with EBITDAs greater than $50 million fetched a median 6.7x TTM EBITDA, $0.0 down from 2008’s median 9.5x TTM EBITDA. 2006 2007 2008 2009 Companies generating less than $50 million in EBITDA were valued at a median 9.1x TTM EBITDA, up from 2008’s median 8.3x TTM billion total price tag included $32.6 billion from 21 EBITDA. In summary, as private equity acquirers mega-deals, with the remaining $23.6 billion were forced to use more of their own cash, they attributable to 1,702 smaller transactions made fewer deals and spent fewer dollars, a trend (average: $13.9 million per deal). we expect to continue until debt leverage once again becomes a viable financing option. A quarter-by-quarter analysis of U.S. software M&A activity is equally instructive. Commencing Software M&A Deal Volume and Spending in 2Q08, deal activity continued to decline through the first two quarters of 2009, before edging up in Software M&A transactions accounted for 13.3% Q3 and again in the final quarter (Figures 30 and of all U.S. M&A activity in 2009, down from 15.3% 31). Although 4Q09’s 325 software transactions in 2008. There were 1,271 mergers and were 4.1% fewer than 4Q08’s 339 transactions, acquisitions worth $31.9 billion in the U.S. the recent uptick in deal volume is encouraging. software sector in 2009, compared to 1,723 What’s more, 4Q09 U.S. software M&A spending transactions aggregating $56.2 billion in 2008 was up 26.7% year-over-year, from $6.1 billion to (Figures 28 and 29). $7.7 billion. Note to our readers: The deal and dollar volumes in Figures 28 and 29 have been While software deal activity declined 26.2% year- updated from our previously published quarterly over-year, the total software M&A dollars spent in reports due to transactions reported and added 2009 plunged 43.1% from 2008, primarily subsequent to our publication date. because of the relative dearth of software industry mega-deals (transactions with enterprise values Although we’re less than one month into the year greater than $500 million). Of 2009’s $31.9 billion at the time we go to press, we are seeing an total software M&A outlay, $19.2 billion was spent extraordinary level of software industry M&A on 13 mega-deals, leaving $12.7 billion dollars to activity in North America, unprecedented for this be spread across 1,258 deals (average: $10.1 time of the year. The greatly heightened level of million per deal). By comparison, 2008’s $56.2 activity is being driven by pent-up buyer demand,

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Figures 30 and 31: U.S. Software Sector M&A Activity and Dollars Spent 600

502 511 500 470 475 456 439 466 398 400 339 321 325 306 319 300 # of Deals 200

100

0 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

$35.0 $32.0 $30.0

$24.3 $25.0

$22.4 $20.0 $15.0 $16.0 $15.0

($ billions) ($ $13.4 $12.6 $11.5 $9.8 $7.7 $10.0 $7.5 $5.0 $6.1 $3.3 $0.0 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

record cash on buyer balance sheets, valuations Software M&A Deal Currency perceived as still reasonable, and an obsession among the industry’s behemoths to grab a greater In 2009, cash was the exclusive form of payment share of the IT spend by extending their reach in approximately 72% of all software M&A into new technologies, territories and product transactions. The stock market’s continuing categories. It’s too early to tell if the current level rebound spurred a comeback in all-stock deals in of activity will continue, but we believe 1Q10 3Q09, accounting for 13% of transactions, but software M&A deal volumes will increase seller wariness about a sustained recovery drove approximately 30% to 425 transactions, a level the all-stock deals back down to 6% of total in last seen since 2Q08. Of course, that assumes a 4Q09. continuing economic recovery, GDP growth in the range of +3%, and IT spending at +3% to +4%, as Transactions featuring a combination of cash and forecast. stock increased markedly to 23% of Q4’s software M&A total, the highest percentage since 3Q07 when cash + stock deals comprised 27% of total

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Figure 32: Software M&A – Form of Payment the current mood of the software M&A market and (Annual & Quarterly) the level of interest and likely valuation range a 9% 5% 9% 10% potential sell-side candidate might attract. Low M&A deal volumes and fewer public buyers usually connote depressed valuations. 20% 16% Conversely, higher deal volume and 40%+ public 21% 18% buyers mean increased deal competition and more strategic valuations.

In 2009, public companies comprised approximately 37% of all software M&A buyers, compared with 42% of all buyers in 2008. Clearly, 75% 72% 69% 75% public software companies, which comprised only 34% of buyers in 1H09, were exercising acquisition restraint during the sharp downturn (Figure 33). Public buyers then began to return to the table in search of strategic tuck-ins, accounting for 40% of all M&A deals in the 2006 2007 2008 2009 second half of the year, and the median exit multiple advanced in response (see below). Cash Cash & Stock Stock Figure 33: Public vs. Private Software 11% 9% 13% 6% M&A – Buyers and Sellers

17% 23% 18% 15% 58% 65% 62% 67%

72% 71% 71% 74% 42% 38%

Percentage of Software Buyers 33% 35%

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Public Private

Cash Cash & Stock Stock

(Figure 32). As the public markets become less volatile, stock returns continue to improve, and buyers seek to retain newly wealthy founders of 95% acquired companies with the lure of boundless 94% 94% 95% upside, look for a greater number of deals employing stock as partial currency.

Private vs. Public Buyers Percentage of Software Sellers 6% 6% 5% 5%

In assessing each quarter’s M&A activity, we continue to track the mix of public and private Q1 2009 Q2 2009 Q3 2009 Q4 2009 buyers because it provides useful insight about Public Private

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Figure 34: Software M&A Valuation as a Multiple of Revenue (Annually) 5.0x 4.1x 4.0x 3.0x 3.0x 2.0x 2.0x 2.1x 1.9x 1.8x 2.0x 1.6x 1.7x 1.3x 1.4x

1.0x

0.0x 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

The top 20 public software companies made 38 more receptive to paying a bit more, believing exit acquisitions in 2H09, compared with 29 in 1H09. valuations would continue to climb in 2010. In our Private buyers, primarily private equity firms, view, that’s sound thinking. growth equity VCs, and the private portfolio companies of each, were more cautious, watching We also analyzed 2009 M&A valuations on a closely but restrained by rising valuations and multiple of EBITDA basis. Due to the lack of lingering fears about the pace and timing of an sufficient data to ascertain median EBITDA exit economic recovery. multiples from private seller software M&A transactions, we limited our analysis to the Software M&A Valuations EBITDA exit multiples for transactions featuring public sellers. Public software company sellers The software industry’s median benchmark exit commanded a modest 13.0x TTM EBITDA exit multiple for 2009 was 1.8x TTM revenue, a multiple in 2009, the same as 2008. negligible decline from 2008’s median software M&A valuation of 1.9x TTM revenue, and only Measured quarterly, the median TTM EBITDA exit modestly lower than 2007’s 2.1x median exit multiple declined 5.6% from 12.5x 1Q09 to 11.8x multiple (Figure 34). in 4Q09 (Figure 36). The decline in 3Q09 is primarily attributable to several 3Q08 transactions When parsed on a quarterly basis, the exit with highly inflated EBITDA multiples dropping out multiple trend line was encouraging. The median of the TTM calculation, including McAfee’s TTM revenue multiple of software M&A acquisition of Secure Computing (1.9x TTM transactions increased 46.2% during the year, revenue, 137.9x TTM EBITDA); IBM’s acquisition from 1.3x in 1Q09 to 1.9x in 4Q09 (Figure 35). of ILOG SA (1.1x TTM revenue, 40.2x TTM Clearly, the rising exit multiple reflected fewer fire EBITDA); and Tripos’ acquisition of Pharsight sales, growing optimism, a mandate to put (1.4x TTM revenue, 17.8x TTM EBITDA). balance sheet cash to work and fierce competition among the industry’s largest players for differentiation and market share. Simply put, as the public markets recovered and public software Figure 36: Software M&A Valuation as a buyers saw their own valuations climb, they were Multiple of EBITDA (Quarterly) 15.6x Figure 35: Software M&A Valuation as a 12.5x 11.8x Multiple of Revenue (Quarterly) 11.3x 8.7x 2.0x 1.6x 1.6x 1.9x 1.3x

Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 21| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

We’ve repeatedly demonstrated in prior SEG As a first step, we sorted 2009’s transactions by Quarterly Reports that three of the most important ownership type, separating public from private determinants of exit valuation are the seller’s software company sellers to ascertain any ownership structure, financial performance and difference in median exit valuation (Figure 37). product category. The axiom held true, once Public sellers received a median exit value of 1.2x again, in 2009. We analyzed all M&A TTM revenue in 2009, while private sellers transactions in 2009 with ascertainable revenue received a median exit value of 1.6x TTM multiples to determine the specific impacts on revenue. Over the past few years, we’ve noted a valuation of ownership (private vs. public shrinking variance between public and private company), size (revenue) of buyer and seller, and seller exit valuations, with historically higher public the seller’s software product category. company exit premiums declining over time as their market valuations dropped and many of the best performing and most valuable public Figure 37: 2009 Median Multiples – companies were acquired. The public seller Segmentation (Enterprise Value/Revenue) premium eventually disappeared, as a good number of those public sellers remaining saw Public Sellers 1.2x Median Multiple revenue flatten or decline, working capital shrink, and stock prices plummet. In 2009, the 32% shareholders of several of these walking wounded public companies deemed a 10% premium above 68% their current trading price to be a palatable outcome.

Private Sellers As a next step, we separated public and private 1.6x Median Multiple software company buyers to ascertain any difference in median purchase price paid in 2009. Private Buyers For historical context, in 2006 and 2007 public 1.2x Median Multiple buyers shelled out a median 2.7x and 2.5x TTM revenue, respectively, for their acquisitions, while 26% private buyers paid 1.9x and 2.0x TTM revenue, 74% respectively. In 2008, we saw the historical variance narrow considerably, with public software companies paying a median purchase price of 2.0x TTM revenue, compared to a median Public Buyers 1.7x TTM revenue paid by private buyers. 1.9x Median Multiple

During 2009, the public-private buyer differential Buyer Greater Buyer Less Than increased drastically. Public buyers paid a Than $200 million $200 million 2.2x Median 1.2x Median median 1.9x TTM revenue, well within historic Multiple Multiple norms. Private buyers, however, paid a miserly 1.2x TTM revenue exit multiple, in many cases acquiring competitors that were struggling to 51% survive the downturn. 49% Additionally, we sliced the 2009 median software M&A multiple horizontally and vertically, segregating vertical market software company sellers (e.g. retail, financial services, telecom, Seller Greater Seller Greater manufacturing, etc.) from sellers with horizontal Than $20 Than $20 software solutions (infrastructure, enterprise million: 0.8x1.7x million: 1.5x1.0x applications, etc.). In 2009, providers of vertical Seller Less Seller Less software accounted for an unprecedented 41% Than $20 Than $20 (Figure 38) of all software M&A, while horizontal million: 2.0x2.4x million: 2.4x1.4x solution providers comprised 59% of sellers.

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While vertical market software providers are still in Among the 11 product categories we tracked in demand, they’re not fetching the same premiums 2009 (Figure 40), Development Tools and IT of a year ago. In 2009, providers of vertical Asset Management software boasted the highest software companies received a median 1.6 x TTM category exit valuation, at 3.0x TTM revenue. revenue (Figure 39) exit valuation, while Transactions in this category included horizontal solution providers garnered a 1.7x TTM Telephonetics’ acquisition of Eden Origin ($5.6 revenue valuation. million, 7.2x TTM revenue) in 1Q09; Cisco’s acquisition of Tidal Software ($105 million, 4.0x Figure 38: 2009 Horizontal vs. Vertical Sellers TTM revenue estimate) in 2Q09; EMC’s acquisition of Configuresoft ($87 million, 3.0x TTM revenue estimate) in 2Q09; VMWare’s acquisition 41% 59% of SpringSource ($446 million, 14.8x TTM revenue estimate) in 3Q09; and Compuware’s acquisition of Gomez ($290 million, 5.5x TTM revenue) in 4Q09.

Vertical Horizontal Figure 40: Software M&A by Category Figure 39: Horizontal vs. Vertical Software M&A Multiples Development Tools & IT Asset 3.0x Mgm t Horizontal Vertical BI, Risk and 4Q09 1.7x 2.3x Compliance 2.6x 3Q09 2.3x 1.5x Mgm t 2Q09 1.7x 1.6x Multimedia, 1Q09 1.3x 1.1x Graphics, & 2.2x Median 2009 1.7x 1.6x Digital Media 4Q08 1.2x 1.8x Financial 3Q08 1.3x 2.7x Services 2.0x 2Q08 1.5x 2.7x Software 1Q08 2.2x 2.0x HR & Workforce 1.7x Median 2008 1.5x 2.0x Mgm t

Healthcare M&A Exit Valuations by Software Category 1.5x Software While company size and software delivery model demonstrably impact valuation, software product Other Verticals 1.5x category continued to be the single most (A&D, Telco, Retail, etc.) important M&A valuation driver in 2009. For most software product categories, there is often an Messaging, insufficient number of transactions that publicly Conferencing & 1.3x report both seller TTM revenue and buyer Communications purchase price, essential data in ascertaining the Accounting & applicable median exit value for the product 1.2x Finance category. Consequently, we aggregate the data each quarter on a TTM basis. As a result, it may Supply Chain take several quarters to detect changing product 1.1x category valuation trends, and certain outlier Mgmt & Logistics transactions consummated nine or twelve months ago may have a residual impact on their product Enterprise category multiples. Resource 0.7x Planning

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Exit valuations for other software product SaaS categories ranged from 2.6x TTM revenue for providers of BI, Risk and Compliance There’s nothing like a major recession to take the Management software, to 0.7x TTM revenue for wind out of the sails of a high-flying technology Enterprise Resource Planning (ERP) software. In trend. Until 3Q08, the stellar revenue growth of terms of volatility, exit valuation multiples in the SaaS providers, their promise of a more Development Tools and IT Asset Management predictable and profitable revenue model, and category fluctuated most year-over-year, jumping unprecedented hype by many industry pundits from 1.9x TTM revenue in 2008 to 3.0x in 2009. who regarded SaaS as the second coming, helped drive SaaS exit multiples through the roof From a deal activity standpoint, Healthcare (e.g., median 5.5x TTM revenue in 1Q07; 4.8x in software led all other product categories in 2009, 1Q08). followed closely by Development Tools/IT Asset Management and Financial Services (Figure 41). Then came Lehman Brothers, sub-prime mortgage defaults, AIG, etc. The recession took

Figure 41: Software M&A by Product Category

Security Storage & Systems Mgmt Web Analytics Supply Chain Mgmt & Logistics Wireless Telecommunications Accounting

Manufacturing & Asset Mgmt Billing & Service Provisioning Retail Business Intelligence

Other Verticals Content/Document Mgmt

CRM, Marketing & Sales Software

Database & File Mgmt

Healthcare

Dev. Tools, IT Asset Mgmt Gov't / A&D & App. Testing

Education & Computer Financial Services Based Training

Networking & Connectivity Electronic Commerce

Electronic Design Multimedia, Graphics, Entertainment Automation Digital Media Enterprise Resource Messaging, Conferencing Planning Engineering, PLM & & Communications CAD/CAM

HR & Workforce Mgmt

24| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

its toll on both enterprises and small/medium 3.3x TTM revenue. Notable SaaS deals in 3Q09 businesses (SMBs) alike, IT spending plummeted include Omniture’s announced sale to Adobe and the median TTM revenue growth rate of the ($1.6 billion, 4.7x TTM revenue), and Etap-On- public companies comprising our SEG SaaS Line’s acquisition by Concur ($40 million, 3.3x dropped steadily, from 48.9% in 4Q07 to 35.5% in TTM revenue). 4Q09 provided additional signs of 4Q08 to 14.9% in the final quarter of 2009 (Figure a SaaS exit valuation recovery. Twenty SaaS 42). providers were acquired in 4Q09 for a median 3.3x TTM revenue, led by Gomez’ sale to It took some time for the rapidly declining SaaS Compuware for $290 million, a 5.5x TTM revenue growth rates to sink in. SaaS exit valuations multiple. remained high in 3Q08 (5.4x TTM revenue) and 4Q08 (4.8x TTM revenue), but far fewer buyers We see better times ahead for SaaS, particularly showed an appetite for SaaS’ lofty multiples. The for the growing number of public SaaS providers number of SaaS M&A transactions declined that have finally turned the corner on profitability. quickly and sharply - from 36 deals in 1H08 to 25 SaaS adoption at the enterprise level will grow – SaaS exits in 2H08, a 31% drop. In 1H09, as the albeit not nearly as quickly as many analysts and median TTM growth rate of public SaaS pundits predict, but the real updraft will come from companies continued to fall, M&A activity and exit resumed spending on SaaS by SMBs. And that’s valuations slipped further, as well. There were likely only if the slow but steady economic only nine SaaS deals reported in 1Q09, reflecting recovery continues unabated and GDP growth a median exit valuation of 1.2x TTM revenue, and exceeds 3% each quarter. Should that occur, eight SaaS transactions in 2Q09 (insufficient data SaaS companies with 12% to 15% EBITDA to calculate a reliable median exit multiple). margins and 40% TTM revenue growth rates can expect to, once again, exit for a premium in 2010, In 3Q09, however, after four consecutive quarters should they opt to do so. of decline, SaaS M&A activity and exit valuations both improved. The median valuation of the thirteen SaaS companies that exited in 3Q09 was

Figure 42: Historical Public SaaS Company Financial Performance vs. Median SaaS Exit Multiples (EV/Revenue)

60.0% 6.0x 5.5x 5.4x 5.3x 5.2x 5.0x 50.0% 4.8x 4.8x 5.0x TTM EV/Rev Exit Multiple

40.0% 3.7x 4.0x 3.3x 3.3x

30.0% 3.0x

20.0% 2.0x

1.2x 10.0% 1.0x TTM Rev Growth & EBITDA Margin n/a

0.0% 0.0x 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

TTM EV/Rev Exit Multiple TTM Rev Growth TTM EBITDA Margin

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APPENDIX A: 2009 PUBLIC MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY

Billing & Service Management 4Q08 1Q09 2Q09 3Q09 4Q09 Dev. Tools, Op Systems & App Testing 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.8 2.8 2.8 3.0 3.0 Current Ratio 2.0 2.1 2.1 2.1 2.0 EBITDA Margin 12.0% 13.7% 17.0% 20.2% 17.3% EBITDA Margin 14.3% 15.8% 18.2% 17.5% 16.6% Gross Profit Margin 49.0% 50.6% 51.4% 52.0% 50.4% Gross Profit Margin 70.4% 70.4% 70.4% 70.4% 70.2% Net Income Margin 11.1% 11.3% 10.9% 10.8% 11.7% Net Income Margin 11.2% 7.2% 7.2% 6.2% 6.7% TTM Earnings Growth (YoY) 3.8% 5.5% 10.8% -3.1% 6.2% TTM Earnings Growth (YoY) 17.6% -11.8% -24.4% -3.0% -50.5% TTM Revenue Growth (YoY) 12.6% 11.0% 8.5% 19.6% -1.0% TTM Revenue Growth (YoY) 16.9% 14.1% 7.2% 3.1% -4.2% TTM EBITDA Growth (YoY) 20.6% 61.4% 9.0% 9.3% 2.5% TTM EBITDA Growth (YoY) 31.0% 33.3% 24.9% 20.1% -0.1% Cash as Percent of Market Cap 41.2% 41.4% 27.0% 27.7% 23.6% Cash as Percent of Market Cap 29.6% 32.4% 28.2% 19.3% 28.8% Enterprise Value Growth (YoY) -46.5% -40.0% 5.5% -10.9% 108.8% Enterprise Value Growth (YoY) -60.5% -55.0% -45.0% -21.0% 40.1% EV/Revenue 1.0x 0.9x 1.1x 1.3x 1.4x EV/Revenue 1.1x 0.8x 1.2x 1.4x 1.3x EV/EBITDA 5.2x 4.7x 5.5x 6.6x 6.4x EV/EBITDA 6.4x 5.6x 8.3x 9.7x 12.8x EV/Earnings 9.5x 8.8x 9.4x 12.1x 11.7x EV/Earnings 11.5x 14.5x 17.7x 25.3x 24.0x

Business Intelligence 4Q08 1Q09 2Q09 3Q09 4Q09 eCommerce Software 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.0 2.0 2.2 2.2 2.2 Current Ratio 1.5 1.7 1.8 1.8 1.8 EBITDA Margin 15.7% 16.4% 17.6% 17.4% 17.0% EBITDA Margin 5.3% 8.1% 10.5% 13.2% 14.1% Gross Profit Margin 77.7% 77.8% 78.2% 77.8% 78.0% Gross Profit Margin 59.9% 62.4% 63.8% 65.2% 65.6% Net Income Margin 12.6% 11.0% 11.2% 11.4% 11.3% Net Income Margin -2.9% -13.8% -14.9% -8.0% 5.7% TTM Earnings Growth (YoY) -13.1% -3.7% 3.3% 27.9% -10.7% TTM Earnings Growth (YoY) -150.9% -37.6% 30.3% 297.5% 119.0% TTM Revenue Growth (YoY) 12.0% 6.9% 1.5% -0.5% -0.5% TTM Revenue Growth (YoY) 20.1% 30.1% 12.3% 7.9% 7.9% TTM EBITDA Growth (YoY) 2.8% 8.2% 2.7% 12.0% 25.5% TTM EBITDA Growth (YoY) 393.2% 154.1% 86.0% 61.0% 44.7% Cash as Percent of Market Cap 37.2% 35.7% 32.5% 27.5% 22.4% Cash as Percent of Market Cap 22.2% 26.2% 27.9% 26.2% 26.7% Enterprise Value Growth (YoY) -70.4% -47.3% -32.3% 2.4% 133.6% Enterprise Value Growth (YoY) -41.9% -45.1% -47.9% -37.3% 9.6% EV/Revenue 1.1x 1.1x 1.5x 1.9x 2.4x EV/Revenue 2.3x 2.4x 3.0x 3.0x 2.6x EV/EBITDA 6.4x 7.1x 8.5x 10.6x 12.9x EV/EBITDA 22.1x 16.5x 20.4x 19.4x 18.4x EV/Earnings 8.8x 11.2x 13.6x 18.9x 22.1x EV/Earnings 35.8x 25.6x 29.8x 45.0x 45.0x

Content & Document Management 4Q08 1Q09 2Q09 3Q09 4Q09 Education & eLearning 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 1.6 1.2 1.2 1.4 1.4 Current Ratio 1.0 0.9 1.1 0.9 1.0 EBITDA Margin 25.3% 25.0% 24.2% 23.1% 23.0% EBITDA Margin 10.2% 10.7% 12.2% 9.0% 12.5% Gross Profit Margin 71.8% 72.0% 72.7% 72.5% 72.6% Gross Profit Margin 72.8% 72.4% 72.6% 72.6% 70.1% Net Income Margin 8.0% 6.4% 0.2% -13.1% -6.6% Net Income Margin -0.1% -1.9% -1.3% 0.9% 1.9% TTM Earnings Growth (YoY) 21.2% 85.7% 63.4% 34.4% -55.7% TTM Earnings Growth (YoY) 138.7% 56.1% 65.0% -45.3% 132.3% TTM Revenue Growth (YoY) 13.4% 7.6% -7.0% -0.7% -11.6% TTM Revenue Growth (YoY) 7.3% 3.7% 3.9% 11.7% 11.7% TTM EBITDA Growth (YoY) 33.4% 7.8% 13.6% 6.0% 12.3% TTM EBITDA Growth (YoY) 13.2% 26.3% 40.5% -4.2% 89.6% Cash as Percent of Market Cap 66.7% 30.9% 25.2% 18.8% 34.0% Cash as Percent of Market Cap 17.5% 17.5% 12.6% 14.0% 18.5% Enterprise Value Growth (YoY) -51.0% -50.5% -28.8% -4.9% 50.9% Enterprise Value Growth (YoY) -47.8% -50.7% -31.5% -12.4% 208.7% EV/Revenue 1.4x 1.6x 1.6x 1.7x 1.7x EV/Revenue 1.5x 1.2x 2.2x 2.1x 1.8x EV/EBITDA 5.4x 5.2x 6.5x 6.8x 7.4x EV/EBITDA 12.0x 9.4x 13.5x 17.4x 14.1x EV/Earnings 4.4x 8.5x 14.6x 31.8x 46.7x EV/Earnings 327.3x 119.9x 104.3x 79.9x 77.5x

Customer Relationship Management 4Q08 1Q09 2Q09 3Q09 4Q09 Electronic Design Automation 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 1.4 1.4 1.4 1.4 1.5 Current Ratio 1.7 1.7 1.8 1.8 1.8 EBITDA Margin 1.3% 0.9% 0.4% -0.7% -1.2% EBITDA Margin 10.1% 2.2% -4.4% -9.7% -2.3% Gross Profit Margin 57.5% 54.0% 53.9% 52.9% 56.4% Gross Profit Margin 82.4% 79.8% 79.3% 78.2% 79.3% Net Income Margin -8.0% -11.3% -13.4% -7.4% -9.2% Net Income Margin -10.5% -22.2% -86.9% -89.8% -69.9% TTM Earnings Growth (YoY) 118.1% 48.8% -5.3% 28.9% -70.0% TTM Earnings Growth (YoY) 45.6% 27.6% 35.0% -514.0% -91.8% TTM Revenue Growth (YoY) 0.8% -8.7% -9.1% -15.8% -17.5% TTM Revenue Growth (YoY) 10.3% -31.1% -39.1% -32.3% -17.5% TTM EBITDA Growth (YoY) 2.1% 164.2% -12.8% -13.1% -26.4% TTM EBITDA Growth (YoY) 59.1% 112.2% 26.4% 16.5% -131.4% Cash as Percent of Market Cap 43.3% 42.9% 46.0% 35.2% 29.8% Cash as Percent of Market Cap 50.1% 42.8% 34.6% 35.6% 33.6% Enterprise Value Growth (YoY) -65.7% -60.2% -55.9% -38.4% 50.5% Enterprise Value Growth (YoY) -78.1% -69.9% -51.5% -31.0% -15.0% EV/Revenue 0.5x 0.4x 0.5x 0.7x 0.6x EV/Revenue 0.7x 0.8x 0.9x 1.1x 1.4x EV/EBITDA 17.2x 25.7x 51.0x 15.5x 17.1x EV/EBITDA 7.2x 16.6x 9.1x 9.7x 9.6x EV/Earnings 23.7x - - 26.6x 28.8x EV/Earnings 17.0x - 10.1x 10.3x 13.1x

Database & File Management 4Q08 1Q09 2Q09 3Q09 4Q09 Engineering, PLM & CAD/CAM Software 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.1 2.1 2.0 2.4 2.4 Current Ratio 1.7 1.7 1.8 1.8 1.9 EBITDA Margin 22.2% 22.0% 20.9% 22.4% 22.9% EBITDA Margin 21.2% 20.1% 19.2% 15.1% 12.2% Gross Profit Margin 81.2% 81.7% 82.1% 83.0% 83.7% Gross Profit Margin 82.7% 81.8% 82.0% 81.9% 81.3% Net Income Margin 13.8% 12.3% 12.7% 13.5% 13.9% Net Income Margin 10.2% 7.4% 4.4% 2.9% 0.7% TTM Earnings Growth (YoY) 2.5% -1.6% -2.6% -2.6% 0.9% TTM Earnings Growth (YoY) 23.0% -30.7% -33.2% -23.8% -68.5% TTM Revenue Growth (YoY) 16.4% 10.5% 5.0% 2.0% -1.3% TTM Revenue Growth (YoY) 18.1% 11.1% 2.0% -4.4% -13.8% TTM EBITDA Growth (YoY) 30.7% 18.8% 21.2% 18.6% 18.5% TTM EBITDA Growth (YoY) 35.7% 22.6% -6.5% 0.0% -47.1% Cash as Percent of Market Cap 40.1% 36.5% 30.8% 31.7% 24.4% Cash as Percent of Market Cap 24.6% 29.7% 21.3% 18.3% 18.7% Enterprise Value Growth (YoY) -31.6% -25.4% -9.8% -2.9% 49.3% Enterprise Value Growth (YoY) -54.7% -53.4% -51.5% -31.0% 38.9% EV/Revenue 1.4x 1.3x 1.4x 1.6x 2.1x EV/Revenue 1.1x 1.1x 1.4x 1.6x 1.7x EV/EBITDA 7.6x 7.2x 7.8x 7.7x 8.7x EV/EBITDA 6.8x 5.7x 7.8x 12.3x 13.3x EV/Earnings 13.5x 14.3x 14.8x 17.2x 18.0x EV/Earnings 15.1x 13.0x 18.2x 22.8x 29.8x

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Software Equity Group, L.L.C. Investment Banking / Mergers & Acquisitions

APPENDIX A: 2009 PUBLIC MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY (CONTINUED)

Enterprise Application Integration 4Q08 1Q09 2Q09 3Q09 4Q09 Messaging, Conferencing & Comm. 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.1 2.1 1.9 1.8 1.8 Current Ratio 1.8 1.7 1.8 1.8 2.0 EBITDA Margin 17.7% 18.5% 18.8% 19.8% 20.5% EBITDA Margin 8.8% 10.0% 10.4% 11.0% 12.7% Gross Profit Margin 70.6% 70.7% 71.3% 71.5% 71.2% Gross Profit Margin 61.4% 63.2% 64.5% 64.2% 63.3% Net Income Margin 11.5% 11.3% 9.5% 10.1% 10.0% Net Income Margin 8.8% 4.9% 4.0% 4.6% 6.3% TTM Earnings Growth (YoY) -6.9% -6.7% -4.0% 1.3% 0.3% TTM Earnings Growth (YoY) -75.1% -60.3% -54.9% -42.7% -49.9% TTM Revenue Growth (YoY) 13.0% 7.9% 0.9% -5.2% -3.6% TTM Revenue Growth (YoY) 10.5% 5.5% 4.3% 6.4% 3.9% TTM EBITDA Growth (YoY) 10.4% 15.0% 10.3% 15.5% 15.4% TTM EBITDA Growth (YoY) 44.1% 32.5% -16.7% 15.0% -7.2% Cash as Percent of Market Cap 30.7% 32.0% 29.3% 38.6% 33.0% Cash as Percent of Market Cap 35.8% 40.4% 27.0% 22.5% 20.0% Enterprise Value Growth (YoY) -50.0% -39.9% -24.1% 2.3% 75.4% Enterprise Value Growth (YoY) -61.6% -65.1% -21.8% 7.7% 141.5% EV/Revenue 1.2x 1.1x 1.4x 2.1x 2.1x EV/Revenue 0.6x 0.6x 0.9x 1.4x 1.6x EV/EBITDA 6.3x 6.8x 7.7x 11.3x 9.6x EV/EBITDA 6.8x 5.7x 8.2x 8.6x 8.1x EV/Earnings 13.2x 14.0x 16.1x 19.7x 21.0x EV/Earnings 16.1x 16.1x 11.9x 13.3x 23.1x

Enterprise Resource Planning 4Q08 1Q09 2Q09 3Q09 4Q09 Multimedia, Graphics, Digital Media 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 1.3 1.2 1.2 1.2 1.6 Current Ratio 2.2 2.1 2.1 2.2 2.2 EBITDA Margin 13.0% 14.1% 15.3% 17.4% 16.8% EBITDA Margin 13.5% 15.4% 15.6% 14.9% 11.6% Gross Profit Margin 55.3% 54.0% 53.9% 54.8% 57.0% Gross Profit Margin 70.5% 69.7% 69.7% 68.9% 68.7% Net Income Margin 3.8% 3.4% 3.9% 4.7% 5.7% Net Income Margin 8.1% 8.1% 6.8% 3.7% 5.1% TTM Earnings Growth (YoY) -8.7% 0.3% -5.3% -1.7% 3.2% TTM Earnings Growth (YoY) 6.7% -34.7% -16.4% -60.2% -55.5% TTM Revenue Growth (YoY) 12.9% 11.3% 3.2% -3.2% -9.3% TTM Revenue Growth (YoY) 8.6% 1.2% -7.0% -12.6% -13.3% TTM EBITDA Growth (YoY) 2.1% 18.4% 15.6% 8.0% 8.4% TTM EBITDA Growth (YoY) 46.9% 43.5% 34.0% -14.8% -18.2% Cash as Percent of Market Cap 22.9% 32.1% 31.4% 25.5% 25.2% Cash as Percent of Market Cap 27.8% 32.9% 25.5% 20.4% 15.3% Enterprise Value Growth (YoY) -44.2% -45.3% -25.3% -8.5% 24.0% Enterprise Value Growth (YoY) -56.7% -57.8% -48.5% -29.8% 45.6% EV/Revenue 1.2x 1.0x 1.1x 1.4x 1.5x EV/Revenue 1.0x 1.5x 1.8x 2.0x 2.5x EV/EBITDA 8.7x 8.6x 9.0x 9.9x 9.7x EV/EBITDA 8.4x 9.0x 8.2x 13.1x 17.9x EV/Earnings 16.8x 16.4x 20.4x 22.5x 21.5x EV/Earnings 13.2x 17.2x 21.0x 24.5x 29.6x

Entertainment 4Q08 1Q09 2Q09 3Q09 4Q09 Networking & Connectivity 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.0 1.7 1.8 1.9 1.7 Current Ratio 1.7 2.0 2.0 2.2 2.2 EBITDA Margin 18.6% 17.5% 13.8% 24.0% 22.4% EBITDA Margin 9.2% 13.9% 18.8% 19.8% 21.5% Gross Profit Margin 57.6% 55.5% 56.1% 59.0% 60.3% Gross Profit Margin 76.0% 76.2% 77.0% 77.6% 78.2% Net Income Margin 5.2% 6.2% 3.9% -2.7% -2.7% Net Income Margin 2.3% 3.9% 7.5% 9.0% 10.2% TTM Earnings Growth (YoY) 71.1% 50.4% -32.1% 31.1% -17.7% TTM Earnings Growth (YoY) 9.8% 1.5% 32.4% 34.1% 28.6% TTM Revenue Growth (YoY) 25.4% 32.6% 47.7% 14.0% -5.2% TTM Revenue Growth (YoY) 13.8% 11.1% 6.8% 4.0% 1.8% TTM EBITDA Growth (YoY) -1.0% 34.8% 3.7% 57.7% 12.9% TTM EBITDA Growth (YoY) -0.9% 4.9% 19.7% 54.4% 37.4% Cash as Percent of Market Cap 42.2% 49.1% 36.9% 31.4% 29.2% Cash as Percent of Market Cap 34.0% 36.1% 27.3% 27.0% 26.1% Enterprise Value Growth (YoY) -70.6% -69.6% -63.0% -44.1% 42.4% Enterprise Value Growth (YoY) -47.1% -42.4% -27.3% -14.3% 40.7% EV/Revenue 1.3x 0.7x 1.0x 1.0x 1.0x EV/Revenue 1.5x 1.9x 1.7x 2.0x 2.2x EV/EBITDA 2.6x 4.4x 4.9x 8.1x 6.6x EV/EBITDA 12.4x 8.1x 8.0x 10.8x 13.7x EV/Earnings 4.1x 5.3x 9.4x 13.1x 13.8x EV/Earnings 19.1x 16.0x 25.9x 28.4x 37.7x

Financial Services Software 4Q08 1Q09 2Q09 3Q09 4Q09 Security 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 1.3 1.4 1.4 1.3 1.3 Current Ratio 1.8 1.9 2.1 2.2 2.2 EBITDA Margin 20.6% 20.1% 19.6% 18.9% 19.3% EBITDA Margin 13.5% 14.1% 17.3% 18.5% 16.5% Gross Profit Margin 58.9% 57.7% 55.2% 55.7% 57.6% Gross Profit Margin 75.9% 76.7% 76.9% 77.0% 77.4% Net Income Margin 10.3% 9.7% 8.7% 9.0% 9.4% Net Income Margin 6.7% 2.0% 0.6% 2.4% 5.7% TTM Earnings Growth (YoY) -2.6% -18.7% -7.5% -12.0% 5.5% TTM Earnings Growth (YoY) -2.4% 7.2% 11.5% 7.3% 13.9% TTM Revenue Growth (YoY) 16.1% 10.1% 5.6% 3.4% 2.1% TTM Revenue Growth (YoY) 17.5% 19.7% 11.7% 10.2% 8.5% TTM EBITDA Growth (YoY) 18.1% 20.9% 13.9% 9.8% 8.7% TTM EBITDA Growth (YoY) 18.0% 32.4% 33.6% 26.4% 28.8% Cash as Percent of Market Cap 17.7% 18.7% 15.5% 13.6% 12.1% Cash as Percent of Market Cap 26.9% 23.6% 22.3% 19.3% 16.4% Enterprise Value Growth (YoY) -46.6% -36.7% -23.6% -13.0% 25.1% Enterprise Value Growth (YoY) -57.0% -34.4% -12.0% 3.7% 43.7% EV/Revenue 2.0x 1.8x 2.1x 2.3x 2.5x EV/Revenue 2.3x 2.0x 2.4x 3.4x 3.3x EV/EBITDA 9.7x 8.2x 10.6x 11.3x 11.1x EV/EBITDA 13.1x 11.6x 11.3x 12.8x 13.8x EV/Earnings 18.9x 20.6x 25.1x 26.3x 25.9x EV/Earnings 13.7x 15.4x 20.5x 29.6x 30.7x

Healthcare 4Q08 1Q09 2Q09 3Q09 4Q09 Storage & Systems Management 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.8 2.5 2.7 2.3 2.4 Current Ratio 2.1 2.0 2.0 2.1 2.1 EBITDA Margin 16.6% 19.6% 19.9% 20.3% 20.3% EBITDA Margin 20.0% 20.2% 20.3% 19.6% 18.0% Gross Profit Margin 56.9% 57.1% 57.3% 57.7% 57.3% Gross Profit Margin 80.0% 80.5% 80.4% 80.7% 80.9% Net Income Margin 9.9% 8.1% 7.7% 9.3% 5.4% Net Income Margin 10.2% 8.4% 7.1% 6.4% 6.0% TTM Earnings Growth (YoY) 48.4% 14.4% -7.4% -46.5% -21.3% TTM Earnings Growth (YoY) 7.3% 21.4% 10.8% 0.2% -17.0% TTM Revenue Growth (YoY) 8.8% 6.6% 7.4% 8.9% 8.9% TTM Revenue Growth (YoY) 12.4% 9.6% 12.5% 8.9% -0.3% TTM EBITDA Growth (YoY) 17.4% 21.4% -7.6% 11.8% 21.4% TTM EBITDA Growth (YoY) 25.4% 26.6% 29.0% 18.3% -4.7% Cash as Percent of Market Cap 19.2% 22.2% 19.1% 12.2% 11.0% Cash as Percent of Market Cap 27.7% 24.3% 21.3% 18.1% 18.7% Enterprise Value Growth (YoY) -37.8% -34.2% -7.7% 15.9% 46.6% Enterprise Value Growth (YoY) -55.9% -36.8% -30.9% -13.1% 48.2% EV/Revenue 1.8x 1.7x 2.4x 2.4x 2.6x EV/Revenue 1.5x 1.5x 1.6x 2.1x 2.4x EV/EBITDA 12.5x 10.4x 13.7x 15.2x 17.7x EV/EBITDA 7.4x 8.5x 9.8x 11.0x 13.8x EV/Earnings 17.0x 19.5x 24.4x 42.5x 49.5x EV/Earnings 16.1x 16.7x 19.4x 26.0x 30.8x

27| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

Software Equity Group, L.L.C. Investment Banking / Mergers & Acquisitions

APPENDIX A: 2009 PUBLIC MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY (CONTINUED)

Supply Chain Management & Logistics 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 1.6 1.4 1.8 1.8 2.3 EBITDA Margin 10.6% 10.1% 11.3% 10.8% 11.7% Gross Profit Margin 56.5% 54.5% 54.9% 55.3% 60.4% Net Income Margin 2.1% -0.4% 1.4% 1.6% 3.6% TTM Earnings Growth (YoY) -25.9% 26.8% 73.9% 19.9% -51.8% TTM Revenue Growth (YoY) 0.8% -0.9% 0.4% 1.0% -9.2% TTM EBITDA Growth (YoY) -0.9% -24.4% -26.6% -20.6% 28.2% Cash as Percent of Market Cap 33.9% 37.8% 21.7% 25.3% 23.9% Enterprise Value Growth (YoY) -49.6% -53.2% -35.9% -26.0% 80.9% EV/Revenue 0.9x 0.9x 1.1x 1.2x 1.5x EV/EBITDA 5.5x 8.5x 9.7x 9.8x 13.0x EV/Earnings 10.0x 14.4x 27.8x 23.6x 33.9x

Wireless 4Q08 1Q09 2Q09 3Q09 4Q09 Current Ratio 2.4 2.3 3.1 2.8 4.8 EBITDA Margin 9.9% 10.5% 10.2% 11.9% 7.9% Gross Profit Margin 48.1% 47.5% 47.3% 46.8% 42.1% Net Income Margin 1.1% 1.5% -0.1% 0.7% -12.1% TTM Earnings Growth (YoY) 80.2% 95.5% 73.5% 33.2% -32.7% TTM Revenue Growth (YoY) 20.3% 1.5% -0.6% -1.5% -10.2% TTM EBITDA Growth (YoY) 94.9% 76.8% 72.9% 91.2% 26.2% Cash as Percent of Market Cap 37.6% 41.5% 39.4% 34.3% 34.5% Enterprise Value Growth (YoY) -48.4% -35.4% -3.9% -5.4% 7.7% EV/Revenue 1.5x 1.4x 0.9x 1.0x 1.3x EV/EBITDA 11.1x 11.0x 11.7x 13.6x 14.8x EV/Earnings - - 181.1x 67.0x 48.9x

28| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

Software Equity Group, L.L.C. Investment Banking / Mergers & Acquisitions

APPENDIX B: 2009 MERGERS AND ACQUISITIONS, SELECT PUBLIC SELLER VALUATIONS

TTM Revenue Date Buyer Seller Purchase Price Enterprise Value EV/Rev EV/EBITDA Growth

12/15/2009 ADP Network Services Limited OneClickHR plc (AIM:OCR) $25,360,000 $22,870,000 2.2x 17.0x 14.1%

12/14/2009 Descartes Systems Group Inc. (TSX:DSG) Porthus N.V. (ENXTBR:ALPTH) $43,200,000 $36,980,000 1.1x 8.7x -2.0%

12/14/2009 Abbott Laboratories (NYSE:ABT) Starlims Technologies Ltd (TASE:LIMS) $119,750,000 $88,540,000 3.1x 16.1x 16.1%

Cavium Networks, Inc. 11/6/2009 MontaVista Software, Inc. (NASDAQ:CAVM) $117,640,000 $108,200,000 3.6x - - (NASDAQGM:CAVM) JDA Software Group Inc. 11/4/2009 I2 Technologies, Inc. (NASDAQ:ITWO) $746,940,000 $561,430,000 2.4x 11.2x -9.2% (NASDAQ:JDAS) Valor Computerized Systems Ltd. 10/12/2009 Mentor Graphics Corp. (NASDAQ:MENT) $81,410,000 $53,100,000 1.5x 13.0x -15.0% (XTRA:VCR)

9/15/2009 Adobe Systems Inc. (NASDAQ: ADBE) Omniture Inc. (NASDAQ: OMTR) $1,675,720,000 $1,558,840,000 4.7x 45.4x 55.8%

8/26/2009 NYSE Technologies Limited NYFIX Inc. (NASDAQ: NYFX) $215,720,000 $164,070,000 1.5x 80.9x -10.8%

International Business Machines Corp. 7/27/2009 SPSS Inc. (NASDAQ: SPSS) $1,121,610,000 $783,730,000 2.7x 10.0x -4.9% (NYSE: IBM)

7/20/2009 SAP AG (DB: SAP) SAF AG (XTRA: S4X) $90,570,000 $51,740,000 2.2x 7.5x 33.3%

7/7/2009 Elliott Capital Advisors MSC Software Corp. (NASDAQ: MSCS) $386,680,000 $238,440,000 1.0x 12.0x -7.8%

6/12/2009 Groupe 21; Quadrivio SGR SpA RGI SpA (CM:RGI) $74,680,000 $61,690,000 1.2x 3.9x 13.0%

6/11/2009 Infor Global Solutions SoftBrands (AMEX:SBN) $95,570,000 $81,380,000 0.8x 6.1x 7.4%

6/4/2009 Intel (NASDAQ:INTC) Wind River Systems (NASDAQ:WIND) $884,390,000 $793,400,000 2.2x 20.8x 4.7%

5/30/2009 Merge Healthcare (NASDAQ:MRGE) etrials Worldwide (NASDAQ:ETWC) $23,020,000 $13,960,000 0.9x - -29.2%

5/18/2009 OptiCon Systems (OTC:OPCN) Propalms (OTC:PRPM) $10,610,000 $10,600,000 12.0x - -19.2%

5/5/2009 Micro Focus International (LSE:MCRO) Borland Software (NASDAQ:BORL) $109,670,000 $77,590,000 0.5x - -13.8%

4/16/2009 Unify (NASDAQ:UNFY) AXS-One (OTC:AXSO) $9,480,000 $9,020,000 0.7x - 0.7%

4/3/2009 Vista Equity Partners SumTotal Systems (NASDAQ:SUMT) $132,230,000 $106,670,000 0.9x 36.2x -11.3%

3/31/2009 Fidelity National Info. Services (NYSE:FIS) Metavante Technologies (NYSE:MV) $5,075,270,000 $4,806,490,000 2.8x 11.5x 6.8%

3/19/2009 SintecMedia Ltd. Pilat Media Global plc (AIM:PGB) $27,500,000 $27,500,000 1.1x 17.9x -

2/26/2009 Kudelski SA (VIRTX:KUD) OpenTV Corp. (NASDAQ:OPTV) $128,440,000 $46,270,000 0.4x 3.1x 5.9%

Nuance Communications, Inc. 2/26/2009 ZI Corp. (TSX:ZIC) $34,350,000 $31,160,000 2.3x - 1.6% (NASDAQ:NUAN)

2/23/2009 AMICAS Inc. (NASDAQ:AMCS) Emageon Inc. (NASDAQ: EMAG) $39,300,000 $25,780,000 0.4x - -33.7%

2/14/2009 - Retalix (NASDAQ:RTLX) $167,220,000 $130,430,000 0.6x 17.8x 0.1%

2/12/2009 Square Enix Ltd. Eidos plc (LSE:EID) $152,880,000 $124,690,000 0.6x 2.2x 15.4%

Fortsum Business Solutions Inc. 2/2/2009 GFI Solutions, Inc. $36,450,000 $25,610,000 1.0x 5.4x 10.0% (TSXV:FRT)

1/22/2009 Autonomy Corp (LSE: AU.) Interwoven (NASDAQ:IWOV) $767,570,000 $582,340,000 2.2x 13.1x 15.3%

29| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX C: 2009 MERGERS AND ACQUISITIONS, MOST ACTIVE BUYERS

Buyer Seller Purchase Price Enterprise Value TTM Rev EV/Rev ADP Automaster Oy - - - - OneClickHR plc (AIM:OCR) $25,360,000 $22,870,000 $10,348,416 2.2x Advanced Computer Software Healthy Software Limited $1,510,000 $1,510,000 $1,675,916 0.9x StaffPlan Ltd. $2,300,000 $2,300,000 $2,436,441 0.9x AFS Technologies Becton Schantz Inc. - - - - Softrax Corporation - - - - Interactive Management Systems, Inc. - - - - Asseco Poland SA Z.U.I. OTAGO sp. z o.o $9,340,000 $9,830,000 - - Terminal Systems S.A. $5,780,000 $6,800,000 $3,222,749 2.1x Bakbone Software ColdSpark, Inc. $15,900,000 $15,900,000 - - Asempra Technologies, Inc. $1,850,000 $1,850,000 - - Blackboard Terriblyclever Design, LLC $4,000,000 $4,000,000 - - *ANGEL Learning, Inc. $100,000,000 $100,000,000 $25,000,000 4.0x Blytheco Evanoff Business Software, Inc. - - - - Synergistic Software Solutions LLC, MAS Practice - - - - BMC Software Tideway Systems Limited - - - - MQSoftware, Inc. - - - - CA Oblicore, Inc. - - - - *NetQoS, Inc. $200,000,000 $200,000,000 $56,500,000 3.3x Cassatt Corporation - - - - Orchestria Corporation - - - - Calypso Technology Green River Computing Services, Inc. - - - - Codefarm Software Limited - - - - CDC Software Informance International, Inc. - - - - Categoric Software Corporation - - - - Activplant Corporation - - - - Truition, Inc. - - - - gomembers, Inc. - - - - Cisco Systems *Tidal Software, Inc. $105,000,000 $105,000,000 $26,000,000 4.0x Richards-Zeta Building Intelligence, Inc. - - - - ClickSoftware Technologies ClickSoftware India Private Limited $26,500,000 $26,500,000 - - AiPoint LTD. $1,500,000 $1,500,000 - - Constellation Software EZFacility, Inc. - - - - The Enterprise of America, Ltd. - - - - Integrated Dealer Systems Canada, Ltd. - - - - Continential Automotive Switzerland AG, Transit - - - - Tailored Business Systems, Inc. $3,000,000 $3,000,000 - - MediSolution Ltd., Resource Management Business $27,120,000 $27,120,000 - - Global Software Corporation - - - - Common CENTS Solutions, Inc. - - - - Compusource Corporation - - - - Cybernet Systems Maplesoft - - - - Sigmetrix, LLC - - - - Dassault Systemes International Business Machines Corp., Sales and $600,000,000 $600,000,000 $400,000,000 1.5x Intercim, Inc. - - - - Descartes Systems Group Porthus N.V. (ENXTBR:ALPTH) $43,200,000 $36,980,000 $34,240,741 1.1x Scancode Systems Inc. $6,610,000 $6,610,000 - - Oceanwide USA Inc. $8,450,000 $8,450,000 - - EMC FastScale Technology, Inc. - - - - Configuresoft, Inc. - - - - Explorations Group ME2 Security, LLC $1,600,000 $1,600,000 - - Hawk Biometric Technologies, Inc. - - - - Fluke Networks ClearSight Networks, Inc. - - - - AirMagnet, Inc. - - - - Foresight Group Diagnos.co.uk Limited $10,700,000 $10,700,000 $7,867,647 1.4x ICA Group Ltd. - - - - Fujitsu Fujitsu Transaction Solutions, Inc. $13,700,000 $13,700,000 - Comneon GmbH, Software Development Centre In Linz - - - - Gemalto NV O3SIS AG - - - - NXP B.V., Wireless Chip Services Business - - - -

30| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX C: 2009 MERGERS AND ACQUISITIONS, MOST ACTIVE BUYERS (CONTINUED)

Buyer Seller Purchase Price Enterprise Value TTM Rev EV/Rev GenArts Wondertouch, LLC - - - - SpeedSix Software Limited - - - - Glodyne Technoserve Compulink Systems Ltd. (NSEI:COMSYS) $4,520,000 $3,640,000 $3,033,333 1.2x Broadllyne Technologies Ltd. - - - - iBrands Richard Software Services, Inc. - - - - E-Strategic Solutions, LLC - - - - IHS Inc. Environmental Support Solutions, Inc. $59,000,000 $59,000,000 $20,000,000 3.0x LogTech Canada Ltd. $2,990,000 $2,990,000 - - Informatica Agent Logic, Inc. - - - - AddressDoctor GmbH - - - - Applimation, Inc. $40,000,000 $40,000,000 - - Intel RapidMind, Inc. - - - - Wind River Systems, Inc. (NasdaqGS:WIND) $884,390,000 $793,400,000 $354,300,000 2.2x IBM Guardium, Inc. - - - - Lombardi Software, Inc. - - - - Ounce Labs, Inc. - - - - SPSS Inc. (NasdaqGS:SPSS) $1,121,610,000 $783,730,000 $290,800,000 2.7x Exeros, Inc. - - - - Outblaze Limited - - - - Kudelski SA Medialive S.A. - - - - OpenTV Corp. (NasdaqGM:OPTV) $128,440,000 $46,270,000 $116,500,000 0.4x LM Ericsson Telephone LHS Telekommunikation GmbH & Co. KG (DB:LHS) - - - - Bizitek Software Development & Internet Technologies - - - - Magellium SAS GeoTexel S.A. - - - - Générale d' Infographie, Defense Branch - - - - Marlin Equity Partners Servigistics, Inc. - - - - Click Commerce, Inc. - - - - Medasys SA Mega-Bus International SAS - - - - Thales, hospital information systems integration activity - - - - Mediware Information Systems Healthcare Automation, Inc. $4,450,000 $4,450,000 - - SciHealth, Inc. $2,000,000 $2,000,000 - - Mentor Graphics Valor Computerized Systems Ltd. (XTRA:VCR) $81,410,000 $53,100,000 $35,637,584 1.5x Expert Dynamics $2,500,000 $2,500,000 - - Embedded Alley Solutions, Inc. - - - - Agility Design Solutions Inc., C Synthesis - - - - Micro Focus Borland Software Corp. (NasdaqGM:BORL) $183,990,000 $49,390,000 $161,000,000 0.3x Compuware Corp., Testing and ASQ Business $80,000,000 $80,000,000 - 1.1x Microsoft Opalis Software, Inc. - - - - Sentillion, Inc. - - - - Interactive Supercomputing, Inc. - - - - Rosetta Biosoftware - - - - Neusoft Europe AG Almitas Oy $6,110,000 $6,110,000 - - Sesca Mobile Software Oy $4,980,000 $4,980,000 - - Sesca Technologies SRL $1,710,000 $1,710,000 - - NICE Systems Orsus Solutions, Inc. $22,000,000 $22,000,000 - - Hexagon System Engineering Ltd. $11,000,000 $11,000,000 - - Noble Systems dvsAnalytics, Inc., Liberation Unified Communications - - - - Touchstar Software Corporation - - - - Nokia cellity AG - - - - bit-side GmbH - - - - Nuance Communications *SpinVox, Ltd. $104,660,000 $104,660,000 $50,000,000 2.1x ZI Corp. (TSX:ZIC) $34,350,000 $31,160,000 $13,316,239 2.3x Oracle Silver Creek Systems, Inc. - - - - GoldenGate Software, Inc. - - - - HyperRoll, Inc. - - - - Virtual Iron Software, Inc. - - - - mValent, Inc. - - - - Relsys International, Inc. - - - - Petris Technology Intervera, Ltd. - - - - ZEH Software, Inc. - - - -

31| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX C: 2009 MERGERS AND ACQUISITIONS, MOST ACTIVE BUYERS (CONTINUED)

Buyer Seller Purchase Price Enterprise Value TTM Rev EV/Rev Phase Forward Maaguzi LLC $11,000,000 $11,000,000 - - Covance Inc., Interactive Voice and Web Response $10,000,000 $10,000,000 - - Waban Software, Inc. $13,990,000 $13,990,000 $3,997,143 3.5x Protacon Engineering Futeco Oy - - - - Metso Automation, Oy, DNAroAd - Roll Tracking System - - - - QHR Technologies CLINICARE Corporation $4,730,000 $4,730,000 - - Momentum Healthware, Inc., Financial Software Division $3,980,000 $3,980,000 - - SAP SAF Simulation, Analysis and Forecasting AG $90,570,000 $51,740,000 $23,953,704 2.2x Highdeal, S.A. - - - - Clear Standards, Inc. - - - - Coghead, Inc. - - - - SunGard Genix Systems AG - - - - Performance Pathways, Inc. - - - - TAKE Supply Chain EntComm, Inc. - - - - PSI Software, Inc. - - - - TeleCommunication Systems Networks In Motion, Inc. $169,840,000 $169,840,000 - - LocationLogic LLC $25,390,000 $25,390,000 $18,135,714 1.4x The Carlyle Group OpenLink Financial, Inc. - - - - Broadleaf Co., Ltd. $211,650,000 $211,650,000 - - Siemens RuleStream Corporation - - - - Elan Software Systems SA - - - - Thomson Reuters Sabrix, Inc. - - - - Abacus Enterprise Limited - - - - Vhayu Technologies Corp. - - - - Trimble Navigation CTN Data LLC - - - - QuickPen International Corp. - - - - Triplefin Flintfox International Ltd. - - - - Flintfox USA - - - - Tyler Technologies Assessment Evaluation Services, Inc. $1,600,000 $1,600,000 - - PulseMark, LLC - - - - Parker-lowe & Associates of North Carolina, Inc. $700,000 $700,000 - - UBI Soft Entertainment SA Southlogic Studios - - - - Action Pants, Inc. - - - - UFIDA Software Beijing Space Time Science & Technology Co., Ltd. $6,290,000 $6,290,000 - - Taizhou Hanyi Software Co., Ltd. - - - - Maite Technology $1,020,000 $1,020,000 - - Ultra Electronics Holdings Scytale, Inc. $9,300,000 $9,300,000 - - Tisys SA $6,880,000 $6,880,000 $5,504,000 1.3x Unify AXS-One Inc. (OTCBB:AXSO) $9,480,000 $9,020,000 $12,222,222 0.7x CipherSoft, Inc. - - - - Versata Everest Software, Inc. - - - - AlterPoint, Inc. - - - - Vista Equity Partners MicroEdge, Inc. $30,660,000 $30,660,000 - - SumTotal Systems Inc. (NasdaqGM:SUMT) $132,230,000 $106,670,000 $114,400,000 0.9x Warner Bros. Entertainment Midway Games Inc., Substantially All Assets $234,920,000 $234,920,000 - - Snowblind Studios, Inc. - - - - Schlumberger EDS France, several assets including Artemis and Aix - - - - Techsia SA - - - - Wolters Kluwer Axentis, Inc. - - - - S.B.G. Software Engineering s.r.l. - - - - * Seller Revenue Estimate

32| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX D: 2009 MERGERS AND ACQUISITIONS, SOFTWARE INDUSTRY MEGA-DEALS

Purchase Enterprise TTM Revenue Buyer Seller Price Value EV/Rev EV/EBITDA Growth Fidelity National Information Services Metavante Technologies $5,075,270,000 $4,806,490,000 2.8x 11.5x 6.8% (NYSE:FIS) (NYSE:MV)

Adobe Systems Inc. (NASDAQ: ADBE) Omniture Inc. (NASDAQ: OMTR) $1,675,720,000 $1,558,840,000 4.7x 45.4x 55.8%

Wind River Systems Intel (NASDAQ:INTC) $884,390,000 $793,400,000 2.2x 20.8x 4.7% (NASDAQ:WIND)

International Business Machines Corp. SPSS Inc. (NASDAQ: SPSS) $1,121,610,000 $783,730,000 2.7x 10.0x -4.9% (NYSE: IBM)

IBM., Sales and Customer Support Dassault Systemes SA (ENXTPA:DSY) $600,000,000 $600,000,000 1.5x - - Unit for PLM Software

Autonomy Corp. (LSE:AU) Interwoven (NASDAQ:IWOV) $767,570,000 $582,340,000 2.2x 13.1x 15.3%

I2 Technologies, Inc. JDA Software Group Inc. (NASDAQ:JDAS) $746,940,000 $561,430,000 2.4x 11.2x -9.2% (NASDAQ:ITWO)

33| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX E: 2009 MERGERS AND ACQUISITIONS, SELECT SOFTWARE-AS-A-SERVICE SELLERS

Enterprise Seller Buyer Seller Date Value Revenue EV/Rev API Healthcare Clearview Staffing 12/21/2009 - - - Deltek mySBX 12/15/2009 - - - Descartes Systems Porthus N.V. 12/14/2009 $36,980,000 $32,700,000 1.1x GXS Inovis 12/07/2009 - - - Gerber Technology Yunique Solutions 11/25/2009 $2,000,000 - CDC Software Truition 11/20/2009 - - - GuestTek International Enable Software 11/16/2009 $1,000,000 - - Bloosky Interactive Tracking202 11/13/2009 - - - Blue Frog Solutions Prospect9 11/11/2009 - - - ROK Entertainment Textic 11/11/2009 - - - RealPage Propertyware 11/10/2009 - - - Talent2 Zapper Services 11/03/2009 - - - NCR Netkey 11/02/2009 - - - MessageLabs SoftScan 11/01/2009 - - - Persistent Systems Paxonix 10/21/2009 - - - Barracuda Networks Purewire 10/13/2009 - - - Compuware Gomez 10/06/2009 $290,000,000 $52,400,000 5.5x DataMentors TouchPoint Technologies 10/06/2009 - - - Pentaho LucidEra, Inc., Clearview 10/05/2009 - - - Total Attorneys Virtual Law Office Technology 10/02/2009 - - - Salary.com Makana Solutions 9/29/2009 - - - Adobe Systems Omniture 9/15/2009 $1,558,840,000 $335,500,000 4.7x Taleo Worldwide Compensation 9/14/2009 $20,460,000 - - Rightnow Technologies HiveLive 9/8/2009 $5,600,000 - - Channel Intelligence Vcommerce Corporation 9/1/2009 - - - Concur Technologies Etap-On-Line* 8/1/2009 $39,870,000 $12,000,000 3.3x United Business Media The Fuel Team 7/31/2009 $7,000,000 $3,500,000 2.0x OpenAir QuickArrow 7/22/2009 $19,400,000 - - CCH Axentis 7/17/2009 - - - Teranet Atsource Solutions 7/17/2009 - - - Glodyne Technoserve Ltd Broadllyne Technologies 7/16/2009 - - - Alterian Techrigy SM2 7/15/2009 $5,070,000 - - Jaguar Capital Partners UniRisX Ltd 7/10/2009 - - - InnovationsKapital Projectplace International AB 6/26/2009 - $16,590,000 - Integrated Medical Software IMS Maxims plc 5/20/2009 $16,940,000 - - SinnerSchrader AG newtention technologies GmbH 5/19/2009 - - - Merkle CognitiveDATA 5/18/2009 - $19,000,000 - Emptoris Click Commerce 5/15/2009 - - - SAP AG Clear Standards 5/11/2009 - - - Railcar Management 10East Corp 4/14/2009 - - - Edustructures National Transcript Center 4/9/2009 - - - Teachscape Edgenuity 3/9/2009 - - - SAP AG Coghead 2/18/2009 - - - CSG Openline BLUEROADS 2/18/2009 - - - Itella Information Logistics AS, BasWare A/S 1/26/2009 $2,110,000 $1,773,109 1.2x Invoice Automation Business Xactly Centive 1/22/2009 - - - LMI Aerospace Powerway 1/16/2009 - - - IBM Outblaze Ltd 1/15/2009 - - - Joyent Reasonably Smart 1/14/2009 - - - Meez Pulse Entertainment 1/14/2009 - - - *revenue estimate

34| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT

Abbot Laboratories (NYSE: ABT) acquires Starlims (TASE: LIMS) Category: Laboratory Information Management Software Purchase Price: $88,540,000EV Seller Revenue (TTM): $28,950,000 Seller EBITDA (TTM): $5,510,000 Revenue Multiple (TTM): 3.1xEV EBITDA Multiple (TTM): 16.1xEV Payment Terms: Cash

SEG’s Perspective: Healthcare product and medical device behemoth, Abbot Laboratories, acquires Starlims, a leading provider of laboratory information management software. The acquisition bolsters Abbot’s position in the clinical diagnostics space, will help to drive sales of Abbot’s high price tag diagnostics systems, and is complementary to its current portfolio of middleware, interface engines, reagent management and quality control solutions. Starlims also brings Abbot into several new non-clinical markets; including forensics, microbiology, and public health. Abbot’s $14 per share tender offer represents a 46% premium over Starlim’s pre-announcement average last 30 days closing stock price.

Adobe Systems (NASDAQ: ADBE) acquires Omniture (NASDAQ: OMTR) Category: Web Analytics Purchase Price: $1,558,840,000EV Seller Revenue (TTM): $335,510,000 Seller EBITDA (TTM): $34,350,000 Revenue Multiple (TTM): 4.6xEV EBITDA Multiple (TTM): 45.4xEV Payment Terms: Cash

SEG’s Perspective: Digital content publishing giant, Adobe Systems, acquires Omniture, the leading provider of SaaS web analytics. Through the acquisition, Adobe aims to close the loop between its web flash content applications and Omniture’s web analytics capabilities – allowing Adobe customers to transparently monetize flash content advertising and marketing initiatives. Omniture also provides Adobe a competitive advantage over Microsoft Silverlight, which competes against Adobe Flash but does not offer native analytic capabilities, and brings with it a strong recurring revenue stream through its SaaS business model. Adobe’s $21.50 per share tender offer represents a 45% premium over Omniture’s pre-announcement average 30 days closing stock price. Prior to acquisition, Omniture trailed Salesforce.com as the second largest public pure-play SaaS company.

Authoria acquires Peopleclick Category: Recruitment Management Software Purchase Price: $100,000,000EV Seller Revenue (TTM): $60,000,000 Revenue Multiple (TTM): 1.7xEV Payment Terms: Cash

SEG’s Perspective: Private equity-backed Authoria, acquires Peopleclick, a provider of on-demand recruitment management and affirmative action solutions. Peopleclick will offer Authoria a large customer base to cross-sell its enterprise performance and compensation management solutions, but will have some overlap in recruitment management solutions. With the acquisition, Authoria is better positioned to compete against vendors Taleo, Kenexa, SuccessFactors, and others, and eliminates the risk of Peopleclick falling into the hands of a competitor. The 1.7x TTM revenue multiple is a healthy valuation for a company rumored to be struggling to grow its top and bottom lines.

35| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

Autonomy (LSE: AU) acquires Interwoven (NASDAQ: IWOV) Category: Document Management Total Transaction Size: $767,570,000 Purchase Price: $582,340,000EV Seller Revenue (TTM): $260,290,000 EBITDA (TTM): $44,720,000 Revenue Multiple (TTM): 2.2xEV EBITDA Multiple (TTM): 13.1xEV Payment Terms: Cash

SEG’s Perspective: Autonomy, a leading enterprise search and retrieval software provider, acquires Interwoven, a leader in enterprise content management software. Interwoven’s subsidiary, Discovery Mining, will bring to Autonomy some 4,500 new customers, most of them law firms that may be good prospects for Autonomy’s Meridio data and record management offering. UK-based Autonomy has aggressively pursued market share with such acquisitions as Verity (enterprise search) and eTalk (customer interaction analysis software) in 2005 and Zantaz (email archiving) in 2007. The $775 million, all-cash offer will be financed by an underwritten placement of £220 million ($310.74 million) in ordinary shares of Autonomy, a new revolver credit facility of ~$200 million from Barclays, and cash from both companies’ reserves. Autonomy agreed to pay a $25 million break up fee if the agreement is terminated; Interwoven agreed to pay a $7 million break up if it fails to secure shareholder approval.

CA (NASDAQ: CA) acquires NetQos Category: Network Performance Management Purchase Price: $200,000,000 Seller Revenue (Estimate): $60,000,000 Revenue Multiple (Estimate): 3.3x Payment Terms: Cash

SEG’s Perspective: IT infrastructure vendor, CA, acquires NetQos, a provider of network traffic analysis solutions. The acquisition plugs a hole in CA’s network management portfolio, which is strong in network fault management and network performance reporting, but has lacked the ability to analyze network traffic at a granular level – NetQos fills that gap. The acquisition builds on CA’s initial foray into network management through its 2005 acquisition of Concord Communications ($331.8EV million, 3.0xEV TTM revenue) and puts CA in better position to compete against network management vendors HP, IBM and EMC. IT performance management has been a key area of interest for infrastructure software buyers in 2009, including purchases by Cisco, EMC, VMWare, Riverbed, Oracle and BMC.

Compuware (NASDAQ: CPWR) acquires Gomez Category: Web Application Performance Management Software Purchase Price: $290,000,000 Seller Revenue (TTM): $52,410,000 Seller EBITDA (TTM): $5,790,000 Revenue Multiple (TTM): 5.5x EBITDA Multiple (TTM): 50.1x Payment Terms: Cash

SEG’s Perspective: Leading infrastructure management software vendor, Compuware, acquires Gomez, a provider of SaaS delivered web application performance management solutions. Gomez further extends Compuware’s reach in the APM space to monitoring internet applications, in addition to it current enterprise application management solutions, and enables Compuware to offer an attractive price point for sales into the SME market and enterprise divisions through its SaaS delivery model. Compuware’s purchase of Gomez follows a string of on-premise APM acquisitions by leading infrastructure applications vendors HP, Cisco, BMC, Riverbed, CA, and others.

36| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

Dassault Systemes (ENXTPA: DSY) acquires IBM PLM Sales and Support Unit Category: PLM Software Purchase Price: $600,000,000 Seller Revenue (Estimate): $400,000,000 Revenue Multiple (Estimate): 1.5x Payment Terms: Cash

SEG’s Perspective: Leading 3D and PLM provider, Dassault Systemes, acquires the Dassault PLM sales and support unit of IBM. The acquisition enables Dassault to consolidate its sales efforts, act as the sole vendor of its product suite, and ease the migration of Dassault PLM customers to its v.6 platform. The divestiture will allow IBM to continue to focus on its core business, infrastructure applications, and give other PLM providers more comfort in partnering with IBM Global Services and IBM’s software group. The acquisition ends a mutually beneficial partnership that lasted for nearly three decades – IBM began selling Dassault’s PLM software on its hardware in the early 1980’s, and retained the sales and support activities for U.S. customers. Through the early partnership, Dassault gained entre into North America, landed large accounts, and streamlined its market position against Autodesk and PTC.

DealerTrack (NASDAQ: TRAK) acquires American Auto Exchange Category: Automotive Industry Software Purchase Price: $32,500,000EV Payment Terms: Cash

SEG’s Perspective: DealerTrack, a leading provider of on-demand automotive industry software solutions, acquires American Auto Exchange (AAX), a provider of real-time inventory management systems to North American automotive dealerships. AAX brings DealerTrack a state of the art automotive industry in-store inventory management system used by the top six U.S. dealer groups, and technology complementary to DealerTrack’s current inventory price optimization and marketing products - InventoryPro and PriceDriver. In addition, the acquisition further extends DealerTrack’s reach in one of the fastest growing segments of the dealership technology space. AAX continues DealerTrack’s aggressive inorganic growth strategy, which stalled in 2008, but aggregated ten acquisitions from 2005 through 2007.

Fidelity National Information Services (NYSE: FIS) acquires Metavante (NYSE: MV) Category: Financial Services Software Total Transaction Size: $5,075,270,000 Purchase Price: $4,806,490,000EV Seller Revenue (TTM): $1,707,270,000 EBITDA (TTM): $418,630,000 Revenue Multiple (TTM): 2.8xEV EBITDA Multiple (TTM): 11.5xEV Payment Terms: Stock

SEG’s Perspective: Fidelity, the leading provider of financial industry transaction processing, card issuer solutions and outsourcing services, acquires Metavante, a leading provider of banking and payment technologies. Through its acquisition of Metavante, Fidelity adds approximately 8,000 new customers, significantly expands its U.S. footprint among small and mid-size banks, gains access to Metavante’s highly efficient business process outsourcing model, provides Metavante new channels to grow international revenues, and puts the combined entity in much better position to compete with 800 pound gorilla Fiserv. Metavante shareholders will receive 1.35 shares of Fidelity stock for each share owned – representing a 34% premium over Metavante’s pre-announcement average last 30 days closing stock price. The combined entity will have approximately $5 billion of TTM revenue and $3.8 billion of debt ($1.45 billion of debt related to the acquisition). Metavante shareholders will own approximately 44% of the combined entity.

37| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

IBM (NYSE: IBM) acquires SPSS (NASDAQ: SPSS) Category: Predictive Analytics Purchase Price: $783,730,000EV Seller Revenue (TTM): $290,800,000 Seller EBITDA (TTM): $78,670,000 Revenue Multiple (TTM): 2.7xEV EBITDA Multiple (TTM): 10.0xEV Payment Terms: Cash

SEG’s Perspective: Infrastructure technology behemoth, IBM, acquires SPSS, a leading provider of predictive analytics software. With the addition of SPSS, IBM will now offer a suite of solutions to monitor and analyze current and historical data (picked-up through its acquisition of Cognos) and more accurately forecast and predict future performance (SPSS). IBM’s purchase of SPSS highlights the Company’s continuing information and data management initiatives, and is yet another software acquisition aimed to leverage the value corporations place on information. In March, IBM and SPSS announced a strategic partnership to integrate and resell SPSS’ predictive analytics technologies through the IBM Cognos BI channel. In the ensuing months, SPSS is rumored to have been courted by several other acquirers, likely prompting IBM to acquire the business. In 2007, IBM, Oracle and SAP purchased the largest providers of BI solutions. IBM’s acquisition of SPSS may spark similar consolidation in the predictive analytics space – including SPSS’ competitor, SAS Institute. IBM’s $50 per share tender offer represents a 51% premium over SPSS’ pre-announcement average 30 days closing stock price.

IHS (NYSE: IHS) acquires Environmental Support Solutions (ESS) Category: Environmental, Health and Safety Solutions Purchase Price: $59,000,000EV Seller Revenue (TTM): $20,000,000 Revenue Multiple (TTM): 3.0xEV Payment Terms: Cash

SEG’s Perspective: Information management software and solutions provider, IHS, acquires ESS, a provider of environmental, health and safety sustainability solutions for corporate governance, risk and compliance. The acquisition further leverages IHS’ position within the EH&S space and brings with it a substantial amount of recurring revenue and customers leveraging ESS’ SaaS architecture. IHS has steadily built its position within the EH&S arena through acquisition – acquiring Environmax, Dolphin Software and Environmental Software Providers in 2007 and 2008. IT, financial and environmental GRC software companies have been high priorities for industry buyers this year, including acquisitions by SAP, Oracle, Thomson Reuters, Wolters Kluwer, NICE systems and IBM.

Infor acquires SoftBrands (AMEX: ABN) Category: Manufacturing and Hospitality ERP Software Purchase Price: $80,520,000EV Seller Revenue (TTM): $99,700,000 Seller EBITDA (TTM): $13,370,000 Revenue Multiple: 0.8xEV EBITDA Multiple: 6.0xEV Payment Terms: Cash

SEG’s Perspective: Golden Gate Capital backed, Infor Global Solutions, acquires Softbrands, a provider of mid-market ERP software. The acquisition provides Infor further penetration down market and extends the company’s expertise in the manufacturing and hospitality markets. Additionally, it breathes new life into the company’s traditional inorganic growth strategy. Since making acquisitions of six companies in 2004, nine companies in 2005, seven companies in 2006, and three companies in 2007, Infor has since failed to announce any new transactions – leading to rumors the software titan did not have the cash to continue purchasing smaller entities. Infor’s $0.92 per share tender offer represents a 100% premium over Softbrands’ pre-announcement last day closing stock price.

38| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

Informatica (NASDAQ: INFA) acquires Applimation Category: Data Archiving Software Purchase Price: $40,000,000 Payment Terms: Cash and Earn-out

SEG’s Perspective: Informatica, a leading provider of data integration software, acquires Applimation, a provider of database archiving, subsetting and test data management technologies for enterprise applications. Applimation gives Informatica a cost effective way to manage and archive application data for out-of-the-box software solutions offered by large industry players such as Oracle and SAP, and provides Informatica entrée to the fast growing database archiving market, which Gartner predicts will grow at a 5 year compound annual growth rate of 34.6%. The acquisition, similar to IBM’s 2007 acquisition of Princeton Softech, further solidifies database archiving as a priority for data and application management vendors.

Intel (NASDAQ: INTC) acquires WindRiver Systems (NASDAQ: WIND) Category: Operating Systems Software Purchase Price: $793,400,000EV Seller Revenue (TTM): $354,270,000 Seller EBITDA (TTM): $38,070,000 Revenue Mutliple (TTM): 2.2x EV EBITDA Multiple (TTM): 20.8x EV Payment Terms: Cash

SEG’s Perspective: Hardware computing behemoth, Intel, moves into software through its acquisition of WindRiver Systems, a provider of operating systems, middleware and development tools for the mobile device market. The acquisition provides market leading and complementary software assets to help further grow Intel’s presence within the embedded systems and mobile device markets. It also reinforces Intel’s stated intentions to move beyond its traditional stronghold in the PC market, and diversify its revenue model to offer more than semiconductors. The acquisition also falls short of creating conflict between Intel and its largest ally, Microsoft, because WindRiver’s operating system solutions are not targeted at the PC market. However, it could hurt Microsoft’s hopes for products like Windows Mobile and Windows Embedded. Intel’s $11.50 per share tender offer represents a 44% premium over WindRiver’s pre-announcement last day closing stock price.

McAfee (NYSE: MFE) acquires Solidcore Systems Category: Security Software Purchase Price: $47,000,000EV Payment Terms: Cash and Earnout

SEG’s Perspective: McAfee acquires Solidcore Systems, a provider of dynamic whitelisting technology that ensures only pre- authorized software is enabled to run on company infrastructure. Through the acquisition, McAfee expands its reach into new geographic markets, strengthens its position in the $6 billion endpoint security market, and improves strengthens its virtualization offering - with Solidscore’s capabilities for locking down virtual environments. Other recent infrastructure software acquisitions include Cisco’s acquisition of Tidal Software for $105 million (4.0x TTM revenue est.) and EMC’s acquisition of ConfigureSoft (3.0x TTM revenue est.).

39| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

Meetic (ENXTPA: MEET) acquires Match.Com Category: Internet Software Total Transaction Size: $111,868,000 Purchase Price: $111,868,000EV Seller Revenue (TTM): $76,692,000 Revenue Multiple (TTM): 1.5xEV Payment Terms: stock and cash

SEG’s Perspective: Online dating company Meetic acquires rival Match.Com's European operations from IAC. Match.com and Meetic are two of the largest online dating services in Europe and the combination creates a clear pan-European leader serving a growing population of online daters in Europe. Match.Com’s well established European brand compliments Meetic’s 13.9 million registered profiles in 13 European countries. Match.Com’s European operation includes 15 countries and contributes 13% of Match’s consolidated operating income before amortization. Meetic established its European footprint in the past years by acquiring eFriendsNet, Lexa, ParPerfeito, DatingDirect, Cleargay and Neu. Meetic will issue 6.1 million shares and promissory note of €5.3 million, giving Match.Com 26.8% of Match’s share capital.

Micro Focus International (LSE: MCRO) acquires Borland Software (NASDAQ: BORL) Category: Application Lifecycle Management Software Purchase Price: $77,590,000EV Seller Revenue (TTM): $161,020,000 EBITDA (TTM): $(6,500,000) Revenue Multiple (TTM): 0.5xEV Payment Terms: Cash

SEG’s Perspective: Micro Focus, a UK-based developer of enterprise application modernization and management software acquires Borland Software, a developer of application lifecycle management tools. The acquisition allows Micro Focus to capture greater market share, further penetrate the U.S. market, increase its customer base, and cut cost significantly through company synergy. The $1 per share offer represents a premium of 67% over the pre- announcement average 30-days closing price of 60 cents. Concurrently, Micro Focus announced it would acquire Compuware's application testing and automated software quality business unit for $80 millionEV in cash (1.1xEV revenue multiple). Since 2006, Micro Focus has purchased 7 companies in the legacy infrastructure management software market.

Phase Forward (NASDAQ: PFWD) acquires Waban Software Category: Health Care Technology Software Purchase Price: $13,990,000EV Seller Revenue (TTM): $4,000,000 Revenue Multiple (TTM): 3.5xEV Payment Terms: Cash

SEG’s Perspective: Phase Forward, a leading provider of data management solutions for clinical trials and drug safety, acquires Waban Software, a provider of platform solutions for the automation and compliance of clinical trials data analysis. The acquisition extends Phase Forward’s portfolio for clinical data solutions, enabling an integrated end-to-end solution from study setup through analysis and submission. In addition, Waban provides Specimen Management Systems (Waban SMS) and Laboratory Information Management Solutions (Waban LIMS) for biobanking, pharmacogenomics and biomarker development. Last year, Phase Forward acquired Clarix, an innovative provider of Web-integrated interactive response technology, for $41.8EV million (15.3xEV TTM revenue).

40| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX F: 2009 MERGERS AND ACQUISITIONS – DEAL INSIGHT (CONTINUED)

Symphony Technology and Elliot Management acquire MSC Software (NASDAQ: MSCS) Category: Engineering Software Purchase Price: $198,760,000EV Seller Revenue (TTM): $246,790,000 Seller EBITDA (TTM): $22,540,000 Revenue Multiple (TTM): 0.8x EV EBITDA Multiple (TTM): 8.8x EV Payment Terms: Cash

SEG’s Perspective: Private equity firms, Symphony Technology Group and Elliot Management, acquire MSC Software, a provider of simulation software and services to product manufacturing industries. The low multiple represents traditional private equity financial engineering. Over the past several years, MSC Software has seen its EBITDA and recurring maintenance (+50% of revenue) revenues steadily increase, while letting its license software and services revenue streams steadily decline. The $7.63 per share tender offer represents a 13% premium over MSC Software’s pre-announcement last day closing stock price.

Vista Equity Partners acquires SumTotal Systems (NASDAQ: SUMT) Category: Talent Development Software Purchase Price: $106,670,000EV Seller Revenue (TTM): $114,350,000 EBITDA (TTM): $2,950,000 Revenue Multiple (TTM): 0.9xEV EBITDA Multiple (TTM): 36.2xEV Payment Terms: Cash

SEG’s Perspective: Vista Equity Partners acquires SumTotal Systems, a provider of talent development solutions. Vista will acquire all the outstanding shares of SumTotal common stock for $4.85 per share in cash. The purchase price represents a premium of approximately 196.9% over SumTotal's pre-announcement average closing share price for the 30 trading days ending on April 3, 2009. Concurrent with entering into agreement with Vista, SumTotal terminated its previously announced merger agreement with affiliates of Accel-KKR and will be required to pay a termination fee of $6.67 million. After making four acquisitions in 2008, SumTotal marks Vista’s first investment in 2009.

VMWare (NYSE: VMW) acquires SpringSource Category: Infrastructure Software Purchase Price: $446,000,000 Seller Revenue (Estimate): $30,000,000 Revenue Multiple (Estimate): 14.8x Payment Terms: Cash

SEG’s Perspective: Virtualization specialist, VMWare, acquires SpringSource, a developer of open-source Java application development and management tools. SpringSource extends VMWare outside of its core competency - storage virtualization, and into the broader infrastructure application development and monitoring arenas - helping to tie together knowledge of the infrastructure and application layers. In addition, the combination will allow VMWare to build PaaS technologies that customers can host, build upon, and manage in VMWare’s cloud based operating system, VShpere. The acquisition also places VMWare in direct competition with infrastructure players BMC, CA, HP and IBM. According to Gartner, roughly 3 million Java developers currently leverage the SpringSource framework.

41| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS Date Buyer Seller 12/31/2009 Oracle Corp. (NasdaqGS:ORCL) Silver Creek Systems, Inc. 12/31/2009 CA, Inc. (NasdaqGS:CA) Oblicore, Inc. 12/31/2009 Peopleclick Authoria Peopleclick, Inc. 12/31/2009 Accellos, Inc. vSync Inc. 12/31/2009 Dunnhumby Limited KSS Retail Ltd. 12/30/2009 Stinger Ghaffarian Technologies Master Solutions, LLC 12/29/2009 Fluke Networks, Inc. ClearSight Networks, Inc. 12/29/2009 Nuance Communications, Inc. (NasdaqGS:NUAN) SpinVox, Ltd. 12/24/2009 Glintt-Global Intelligent Technologies SGPS, SA (ENXTLS:GLINT) Consoft and 55% in Farmasoft Informatica y Servicios 12/23/2009 Andor Technology plc (AIM:AND) Bitplane AG 12/23/2009 ICM Business Continuity Services Ltd. Office Shadow Limited, UK Business and Certain Assets 12/23/2009 Temenos Group AG (SWX:TEMN) Viveo Group SA 12/23/2009 Twitter, Inc. Mixer Labs, Inc. 12/22/2009 Proginet Corp. (OTCBB:PRGF) RocketStream, Inc. 12/22/2009 UFIDA Software Co. Ltd. (SHSE:600588) Beijing Space Time Science & Technology Co., Ltd. 12/21/2009 The Bank of New York Mellon Corporation (NYSE:BK) Portsmouth Financial Systems 12/21/2009 Prophecy International Holdings Ltd. (ASX:PRO) Promadis Pty Ltd. 12/21/2009 API Healthcare Corporation Clearview Staffing Software, Inc 12/18/2009 Healthcare Of Today, Inc. NuvoDigital Technology, Inc. 12/17/2009 Media Education International Pty. Ltd. Beijing Aoni CAMI Software Development Pty Ltd. 12/17/2009 Paradox Interactive Inc. AGE Studio SARL 12/16/2009 International Business Machines Corp. (NYSE:IBM) Lombardi Software, Inc. 12/16/2009 Knorr-Bremse AG Sydac Pty Ltd. 12/16/2009 Kudelski SA (SWX:KUD) Medialive S.A. 12/16/2009 Delta Apparel Inc. (AMEX:DLA) Art Gun Technologies, LLC 12/15/2009 ADP Network Services Limited OneClickHR plc (AIM:OCR) 12/15/2009 Ellie Mae, Inc. Mavent Inc. 12/15/2009 Litéra Corp. SoftWise Corporation 12/15/2009 Tibotec BVBA Ground Zero Software, Inc. 12/15/2009 Deltek, Inc (NasdaqGS:PROJ) mySBX, Inc. 12/15/2009 Rivermine Software, Inc. MBG Expense Management, LLC 12/15/2009 ECA SA (ENXTPA:ECASA) Triton Imaging, Inc. 12/14/2009 Descartes Systems Group Inc. (TSX:DSG) Porthus N.V. (ENXTBR:ALPTH) 12/14/2009 Abbott Laboratories (NYSE:ABT) Starlims Technologies Ltd (TASE:LIMS) 12/14/2009 LifeWorld Group (Pty) Ltd. DTH Dynamic Technology Holdings Ltd., Radical Business Unit 12/14/2009 Groupe Berger Levrault Segilog S.A. 12/13/2009 ActivIdentity Corporation (NasdaqGM:ACTI) CoreStreet, Ltd. 12/11/2009 Morningstar Inc. (NasdaqGS:MORN) Logical Information Machines, Inc. 12/11/2009 Maler Holdings, Inc. Health Systems Solutions, Inc. 12/10/2009 Microsoft Corporation (NasdaqGS:MSFT) Opalis Software, Inc. 12/10/2009 Viveris Management SAS Enovacom SAS 12/10/2009 VocalTec Communications Ltd. (NasdaqCM:VOCL) Outsmart Ltd. 12/10/2009 Microsoft Corporation (NasdaqGS:MSFT) Sentillion, Inc. 12/10/2009 Federal Signal Corp. (NYSE:FSS) Diamond Consulting Services Ltd. 12/9/2009 NuSep Limited (ASX:NSP) BioInquire, LLC 12/8/2009 StudentAid.com, Inc. Think Ahead, LLC 12/8/2009 Magellium SAS GeoTexel S.A. 12/8/2009 Playtech Limited (AIM:PTEC) Gaming Technology Solutions Plc 12/7/2009 GlassHouse Technologies, Inc. vcare Infosystems AG 12/7/2009 SDC Software, Inc. Sammsoft 12/7/2009 SilverBridge Holdings Limited (JSE:SVB) Acczone Systems (Pty) Ltd 12/7/2009 GXS, Inc. Inovis, Inc. 12/7/2009 Softronic AB (OM:SOF B) Mondo A/S, Travel Business Segment 12/5/2009 Mascon Global Ltd (BSE:531131) C-SAM, Inc. 12/4/2009 Tracsis Plc (AIM:TRCS) Safety Information Systems Limited 12/4/2009 XATA Corp. (NasdaqCM:XATA) Turnpike Global Technologies L.L.C. 12/4/2009 Harris Computer Systems, Inc. Tailored Business Systems, Inc.

42| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 12/3/2009 Absolute Software Corporation (TSX:ABT) Pole Position Software GmbH 12/3/2009 Artix Entertainment LLC Epic Inventions LLC 12/3/2009 Acosta, Inc. TrueDemand Software, Inc. 12/2/2009 Paladyne Systems, Inc. Oakwood Financial Technologies, LLC 12/2/2009 Hospira Inc. (NYSE:HSP) TheraDoc, Inc. 12/1/2009 Xybion Medical Systems Corporation Amadeus International, Inc. 12/1/2009 - Heartbeat Software Inc. 12/1/2009 ADTEL Sistemas de Telecomunicación S.L. NRDmultimedia, S.L. 11/30/2009 Politec Ltda. Quintec S.A. (SNSE:QUINTEC) 11/30/2009 International Business Machines Corp. (NYSE:IBM) Guardium, Inc. 11/30/2009 Groupe Elcimai Valérian 11/30/2009 OrthoBanc, LLC Acceptx Financial Solutions, Inc. 11/30/2009 CDC Software Corporation (NasdaqGM:CDCS) gomembers, Inc. 11/30/2009 Zetes Industries (ENXTBR:ZTS) ImageID, Ltd. 11/29/2009 DoubleDay Acquisitions, LLC Vision Objects SA 11/29/2009 Trace One Eqos Limited 11/27/2009 Allocate Software plc. (AIM:ALL) Time Care AB 11/26/2009 iSOFT Group Limited (ASX:ISF) Patient Safety International Pty Ltd. 11/25/2009 Gerber Technology Yunique Solutions Inc. 11/25/2009 Mail.Ru LLC Astrum Online Entertainment Holdings 11/25/2009 TeleCommunication Systems Inc. (NasdaqGM:TSYS) Networks In Motion, Inc. 11/24/2009 Interactive Data Corporation (NYSE:IDC) Dow Jones & Company Inc., Online Financial Solutions Business 11/24/2009 Mediware Information Systems Inc. (NasdaqCM:MEDW) Healthcare Automation, Inc. 11/24/2009 TMW Systems Incorporated BetaZone, Inc. 11/23/2009 NICE Systems Ltd. (TASE:NICE) Orsus Solutions, Inc. 11/23/2009 China Public Procurement Limited (SEHK:1094) Jiaji Tian Cheng Technology Limited 11/20/2009 CDC Software Corporation (NasdaqGM:CDCS) Truition, Inc. 11/20/2009 SS&C Technologies Holdings, Inc. TheNextRound, Inc. 11/20/2009 AFS Technologies, Inc. Softrax Corporation 11/19/2009 Shot Spirits Corporation (OTCPK:SSPT) Guestmetrics Inc. (OTCPK:GESM) 11/19/2009 FUSION5 MS LIMITED Savio Solutions Limited 11/19/2009 Terracotta, Inc. Quartz 11/19/2009 Tendeka B.V. FloQuest 11/19/2009 Raven Industries Inc. (NasdaqGS:RAVN) SST Development Group, Inc. 11/19/2009 Sword Group SA (ENXTPA:SWP) Sword AgencyPort 11/19/2009 Asseco Poland SA (WSE:ACP) Z.U.I. OTAGO sp. z o.o 11/18/2009 Bull SA (ENXTPA:BULL) Amesys 11/18/2009 Jungheinrich AG (DB:JUN3) ISA-Innovative Systemlösungen für die Automation GmbH 11/17/2009 Capsoft UK Ltd. LexisNexis Group, HotDocs® Software Business 11/17/2009 ACI Worldwide, Inc. (NasdaqGS:ACIW) Euronet Essentis Ltd. 11/16/2009 Oscar Software Oy Tietotisma Oy 11/16/2009 Thomson Reuters Corporation (TSX:TRI) Sabrix, Inc. 11/16/2009 Advanced Computer Software plc (AIM:ASW) Healthy Software Limited 11/16/2009 GuestTek International, Inc. Enable Software Ltd. 11/14/2009 Trinnphone Castel, Inc. 11/13/2009 Bloosky Interactive, LLC Tracking202 Inc. 11/13/2009 Smart Communications, Inc. Chikka Holdings Ltd. 11/12/2009 Playdom, Inc. Trippert, Inc. and Green Patch, Inc. 11/12/2009 Motorola Israel, Ltd. BitBand, Inc. 11/11/2009 Markinson Business Solutions Pty Ltd. Adexio Pty Ltd 11/11/2009 Blue Frog Solutions, Inc. Prospect9, LLC 11/11/2009 ROK Entertainment Group, Inc. (OTCPK:ROKE) Textic Ltd. 11/10/2009 Artisan Software Tools Ltd. Extessy AG 11/10/2009 CompuDyne - Public Safety & Justice, Inc. Positron Public Safety Systems Inc., Positron Data Applications 11/10/2009 RealPage, Inc. Propertyware, Inc. 11/9/2009 BQE Software Inc Orange Loft LLC 11/9/2009 Electronic Arts Nederland B.V. Playfish Limited 11/9/2009 QHR Technologies Inc. (TSXV:QHR) CLINICARE Corporation 11/9/2009 AppTech Corp. (OTCPK:APCX) AppTech Global, Inc. 11/9/2009 EJustice Solutions, LLC CrimeCog Technologies, Inc.

43| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 11/6/2009 Cavium Networks, Inc. (NasdaqGM:CAVM) MontaVista Software, Inc. (NasdaqGM:CAVM) 11/6/2009 CDC Software Corporation (NasdaqGM:CDCS) Activplant Corporation 11/6/2009 AddNode AB (OM:ANOD B) Evitbe AB 11/6/2009 The Carlyle Group OpenLink Financial, Inc. 11/6/2009 Fresenius Medical Care North America Health IT Services Group, LLC 11/6/2009 checkitmobile GmbH barcoo UG 11/5/2009 Intergraph Corporation TCS Technische Computer Systeme Süssen GmbH, Sigraph® 11/5/2009 Blytheco, LLC Evanoff Business Software, Inc. 11/5/2009 Namtra Business Solutions, Inc. Intelysys (Intelligent Systems) Corporation, eTaxPortal 11/5/2009 TriLinc Global, LLC PAES, Inc. 11/5/2009 Noble Systems Corporation dvsAnalytics, Inc., Liberation Unified Communications Platform 11/5/2009 Mitchell International, Inc. Scene Genesis, Inc. 11/4/2009 JDA Software Group Inc. (NasdaqGS:JDAS) I2 Technologies, Inc. (NasdaqGS:ITWO) 11/4/2009 Funambol, Inc. Zapatec, Inc. 11/4/2009 Rosca, Inc. (OTCBB:RSCA) Secure Path Technology LLC 11/3/2009 DN Capital Limited Datanomic Limited 11/3/2009 T-Venture Holding GmbH Stakes in Portavita B.V. and MGRID 11/3/2009 Talent2 International Ltd. (ASX:TWO) Zapper Services Pte Ltd. 11/3/2009 GenArts, Inc. Wondertouch, LLC 11/3/2009 Arkeia Corp. Kadena Systems, Inc. 11/3/2009 Internet Pipeline, Inc. AgencyWorks, LLC 11/2/2009 NCR Corp. (NYSE:NCR) Netkey, Inc. 11/2/2009 MP Croissance Exm Company 11/2/2009 WestBridge Fund Managers Limited e2train Ltd. 11/2/2009 Wound Management Technologies, Inc. (OTCBB:WNDM) Virtualhealth Technologies, Inc., Healthcare Assets 11/2/2009 Komutel Inc. ConverTec Inc. 11/2/2009 Beagle Finance Pty Ltd Loankit 11/1/2009 MessageLabs Group Limited SoftScan ApS 11/1/2009 Enghouse Systems Ltd. (TSX:ESL) Pulse Voice, Inc. 10/31/2009 Quantifi, Inc. Moment Analytics, Inc. 10/30/2009 Alliadis SAS Pharmacie Gestion Informatique SPAS 10/30/2009 Állami Nyomda Plc. (BUSE:ANY) Techno-Progress Kft. 10/30/2009 L.S.E. Cegid SA, Construction Business Software Solutions Activity 10/30/2009 Verisk Analytics, Inc. (NasdaqGS:VRSK) Enabl-u Technologies Corp. 10/29/2009 Shackleton Equity Partners LLC SafeHarbor Technology Corporation 10/29/2009 Markit Group Limited ClearPar, LLC 10/28/2009 Glodyne Technoserve Ltd (BSE:532672) Compulink Systems Ltd. (NSEI:COMSYS) 10/27/2009 Halliburton Company (NYSE:HAL) Geo-Logic Systems, LLC 10/27/2009 Sasken Communication Technologies Ltd. (BSE:532663) Ingenient Technologies, Inc. 10/27/2009 The Carlyle Group Broadleaf Co., Ltd. 10/27/2009 Amdocs Ltd. (NYSE:DOX) jNetX, Inc. 10/26/2009 Accel-KKR LLC Kana Software, Inc., Substantially All Assets 10/26/2009 Smarterville Productions LLC Educational Resources, Inc. and Sunburst Technology Corporation 10/26/2009 Dassault Systemes SA (ENXTPA:DSY) International Business Machines Corp., Sales and Customer Support 10/25/2009 Hitachi Ltd. (TSE:6501) Certain Next Generation Packet Core Network Components Assets 10/23/2009 NuMobile, Inc. (OTCBB:NUBL) SecurAct Inc. 10/22/2009 SAI Global Ltd. (ASX:SAI) CINTELLATE Pty Ltd. 10/22/2009 Edline, LLC SchoolWorld Software 10/22/2009 China Shandong Industries, Inc. (OTCBB:CSNH) Mobile Presence Technologies, Inc. 10/22/2009 cVidya Networks Inc. ECtel, Ltd. 10/21/2009 Persistent Systems Limited Paxonix Inc. 10/21/2009 Rapid7, LLC Metasploit LLC 10/21/2009 Hosted Data Transaction Solutions Inc. (TSX:HDX) A&A Ltd. 10/20/2009 Right Grand Limited Ozura Sdn Bhd 10/20/2009 UnitedTech Lender Services, Inc. Default Services And BackInTheBlack 10/20/2009 Equifax Inc. (NYSE:EFX) IXI Corporation 10/20/2009 Loopt, Inc. graffitiGeo, Inc. 10/19/2009 Idera Corporation BinaryWave Limited, Sonar Performance Management Product Line 10/19/2009 BMC Software Inc. (NasdaqGS:BMC) Tideway Systems Limited 10/19/2009 Firehole Technologies, Inc. Peak Composites, Inc., CompositePro

44| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 10/19/2009 Image Solutions, Inc. Apyx, Inc. 10/19/2009 Gallery IP Telephony Ltd. Personeta, Inc. 10/19/2009 Ultra Electronics Holdings plc (LSE:ULE) Scytale, Inc. 10/19/2009 CoStar Realty Information, Inc. Resolve Technology, Inc. 10/16/2009 GPS Industries Inc. (OTCPK:GPSN.Q) Prolink Holdings Corp. (OTCPK:PLKH) 10/15/2009 Mentor Graphics Corp. (NasdaqGS:MENT) Expert Dynamics 10/15/2009 Cognizant Technology Solutions Corp. (NasdaqGS:CTSH) UBS Service Centre (India) Private Limited 10/15/2009 Polaris Software Lab Ltd. (BSE:532254) Laser Soft Infosystems Limited 10/15/2009 ClickSoftware Technologies Ltd. (NasdaqGS:CKSW) AiPoint LTD. 10/15/2009 Euromicron AG (XTRA:EUC) SSM Service Gesellschaft mbH 10/15/2009 Libra Szoftver Zrt. VT-SOFT Videoton Software Kft., Municipality Solution Unit Corso 10/14/2009 Kronos Incorporated Stromberg LLC 10/14/2009 Healthways Inc. (NasdaqGS:HWAY) Healthhonors Corporation 10/13/2009 Innofactor Ltd Software Innovation Finland Oy 10/13/2009 Bentley Systems, Incorporated gINT Software, Inc. 10/13/2009 Insight ID Inc. ESI Integrity Inc. 10/13/2009 Eliza Corporation Sprigley 10/13/2009 Barracuda Networks, Inc. Purewire, Inc. 10/12/2009 Mentor Graphics Corp. (NasdaqGS:MENT) Valor Computerized Systems Ltd. (XTRA:VCR) 10/12/2009 CentriQ Group Limited Cirrus Logistics Limited 10/12/2009 Fast Wind Investments Limited Code Wireless Pte. Ltd. 10/12/2009 Previon AG e-nvention ag 10/10/2009 Become, Inc. Pangora GmbH 10/9/2009 Noetix Corporation Jaros Technologies Corporation 10/9/2009 AFS Technologies, Inc. Becton Schantz Inc. 10/9/2009 WorkThink, Inc. Workstreamer LLC 10/9/2009 Tellabs Inc. (NasdaqGS:TLAB) Wichorus, Inc. 10/8/2009 Sonoma Wire Works Submersible Music, Inc. 10/8/2009 BNY ConvergEx Group, LLC Cogent Consulting, LLC 10/7/2009 Intertrade Systems Corporation TIE Holding NV, EDGE Desktop Business 10/6/2009 Compuware Corp. (NasdaqGS:CPWR) Gomez, Inc. 10/6/2009 DataMentors, Inc. TouchPoint Technologies LLC 10/6/2009 Siemens PLM Software, Inc. RuleStream Corporation 10/6/2009 MDA Federal, Inc. Risk Management Solutions, Inc., Climetrix Software 10/6/2009 CO-OP Financial Services, Inc. The LoanLink Center 10/6/2009 Visionet Systems, Inc. eDoc Synergy LLC 10/6/2009 Monitor Clipper Partners, Inc. Microgame S.p.A. 10/5/2009 Pentaho Corporation LucidEra, Inc., Clearview Technology 10/5/2009 Groupe Axemble Innocad SAS 10/5/2009 Altair SA Orda-S S.A. 10/2/2009 Total Attorneys, Inc. Virtual Law Office Technology, LLC 10/1/2009 A-T Solutions, Inc. Trancite Logic Systems 10/1/2009 Netcall plc (AIM:NET) Q-Max Systems Ltd. 10/1/2009 Signet U.S.A., Inc. Jeppesen Marine, Inc., Nobeltec Line of Marine Navigation Software 10/1/2009 GETECO GmbH TDS Informationstechnologie AG, TDS-Rechnungswesen and TDS- 9/29/2009 Oracle Corp. (NasdaqGS:ORCL) HyperRoll, Inc. 9/29/2009 Salary.com, Inc. (NasdaqGM:SLRY) Makana Solutions, Inc. 9/28/2009 Forte Design Systems, Inc. Arithmatica Inc. 9/25/2009 CHR Solutions, Inc. Martin Group, Inc. 9/24/2009 ReadSoft AB (OM:RSOF B) Spear Solutions AB and Spear Imaging Inc. 9/24/2009 Premier Farnell plc (LSE:PFL) CadSoft Computer GmbH 9/23/2009 Novacap Investments, Inc.; Maranon Capital, L.P.; Grace Matthews, PKWARE, Inc. 9/22/2009 Microsoft Corporation (NasdaqGS:MSFT) Interactive Supercomputing, Inc. 9/22/2009 United BioSource Corporation Gigamoto Technology Partners, Inc. 9/22/2009 TeleTracking Technologies, Inc. RadarFind Corporation 9/21/2009 Webwag S.A. Mobile Scope AG 9/21/2009 Options Technology Ltd. BNP Paribas, Hosted Colocation Business 9/21/2009 Arkoon Network Security (ENXTPA:ALARK) SkyRecon Systems SA 9/21/2009 ITS Group (ENXTPA:ITS) Prisme 9/18/2009 Varsity Media Group Inc. Wireless Grids Corporation

45| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 9/17/2009 IHS Inc. (NYSE:IHS) Environmental Support Solutions, Inc. 9/16/2009 Orsyp S.A Sysload Software SA 9/16/2009 Grapecity Inc. FarPoint Technologies Inc. 9/16/2009 Calypso Technology, Inc. Green River Computing Services, Inc. 9/16/2009 London Stock Exchange Group plc (LSE:LSE) Millennium Information Technologies Ltd. 9/15/2009 Myriad Group AG (SWX:MYRN) Xumii, Inc. 9/15/2009 Adobe Systems Inc. (NasdaqGS:ADBE) Omniture Inc. (NasdaqGS:OMTR) 9/14/2009 Thomson Reuters Corporation (TSX:TRI) Abacus Enterprise Limited 9/14/2009 Connectwise, Inc. CoreConnex, Inc., ConnexIT 9/14/2009 NAVTEQ Corporation Acuity Mobile, Inc. 9/14/2009 CA, Inc. (NasdaqGS:CA) NetQoS, Inc. 9/14/2009 Taleo Corp. (NasdaqGM:TLEO) Worldwide Compensation, Inc. 9/14/2009 Asseco Poland SA (WSE:ACP) Terminal Systems S.A. 9/14/2009 OpenTable, Inc. (NasdaqGM:OPEN) GuestBridge, Inc. 9/14/2009 Banexi Ventures Partners FittingBox 9/10/2009 TrustWave Holdings, Inc. Vericept Corporation 9/10/2009 NGP Software, Inc. Patton Technologies, LLC 9/9/2009 Roamware, Inc. Macalla Software Ltd. 9/9/2009 Smilebox, Inc. Preclick Corporation 9/9/2009 Petro-Chem Development Co., Inc. PFR Energy Systems, Inc. 9/9/2009 Smith Micro Software Inc. (NasdaqGS:SMSI) Core Mobility, Inc. 9/8/2009 Disney Interactive Studios, Inc. Wideload Games Inc. 9/8/2009 Noble Systems Corporation Touchstar Software Corporation 9/8/2009 Rightnow Technologies Inc. (NasdaqGM:RNOW) HiveLive Inc. 9/7/2009 Kofax plc . (LSE:KFX) 170 Systems, Inc. 9/7/2009 Mercury Mobility Limited (ASX:MMY) m.Net Corporation Ltd. 9/4/2009 Augeo Incent, LLC IncentOne, Inc., Performance and Loyalty Solutions Business 9/4/2009 SmartSalary Pty Ltd. SeQoya Pty Ltd. 9/3/2009 Fugro Subsea Services Support B.V. Fugro General Robotics Limited 9/3/2009 Harris Computer Systems, Inc. MediSolution Ltd., Resource Management Business 9/2/2009 Informatica Corp. (NasdaqGS:INFA) Agent Logic, Inc. 9/2/2009 Red Gate Software Ltd. Cachupa 9/2/2009 Election Systems & Software, Inc. Diebold Inc., Election Systems Business 9/2/2009 IHS Inc. (NYSE:IHS) LogTech Canada Ltd. 9/1/2009 Channel Intelligence, Inc. Vcommerce Corporation 9/1/2009 Net@Work, Inc. Solution Strategists, Inc., Sage Software Consulting Practice 9/1/2009 Presagis USA, Inc. Seaweed Systems Inc. 9/1/2009 Pharos Systems International, Inc. Standard Register Co., PathForward and SMARTworks 9/1/2009 SeaChange B.V. eventIS Group B.V. 8/31/2009 EMC Corporation (NYSE:EMC) FastScale Technology, Inc. 8/31/2009 IAGreen CVGV Inc. 8/31/2009 Actimize, Inc. Fortent, Inc. 8/31/2009 NICE Systems Ltd. (TASE:NICE) Hexagon System Engineering Ltd. 8/31/2009 Intelli-Check-Mobilisa, Inc. (AMEX:IDN) Positive Access Corporation 8/31/2009 UFIDA Software Co. Ltd. (SHSE:600588) Taizhou Hanyi Software Co., Ltd. 8/28/2009 Steinhilberschwehr AG Ifax GmbH 8/27/2009 Cray Inc. (NasdaqGM:CRAY) PathScale, LLC 8/27/2009 Minati Capital Corp. (TSXV:MNN.P) First Global Data Corporation 8/27/2009 Green Bridge Industries, Inc. (OTCPK:GRBG) TrakIT, Inc. 8/26/2009 Autodesk, Inc. (NasdaqGS:ADSK) BOSS International, Inc. 8/26/2009 Instinet Group Incorporated TORC Financial, LLC 8/26/2009 PSI AG (XTRA:PSA2) AIS Advanced Information Systems Gmbh & Co. 8/26/2009 NYSE Technologies Limited NYFIX Inc. (NasdaqCM:NYFX) 8/26/2009 Neusoft Europe AG Almitas Oy 8/26/2009 Neusoft Europe AG Sesca Mobile Software Oy 8/26/2009 Neusoft Europe AG Sesca Technologies SRL 8/26/2009 IJJ Corp. (OTCPK:IJJP) V-Clouds, Inc. 8/25/2009 RWE Energy AG PSI AG (XTRA:PSA2) 8/25/2009 LDC Ltd. Independent Specialist Technology Limited 8/24/2009 Platform Computing Inc. Hewlett-Packard Company, HP-MPI

46| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 8/24/2009 Live Gamer, Inc. TwoFish, Inc. 8/24/2009 Research In Motion Ltd. (TSX:RIM) Torch Mobile, Inc. 8/24/2009 TIE Technologies, Inc. (OTCPK:TTCS) Mobile Apps, Inc. 8/21/2009 Reval.com, Inc. FXpress Corporation 8/21/2009 Tibco Software Inc. (NasdaqGS:TIBX) Datasynapse, Inc. 8/20/2009 Yovia, LLC SourceFuse LLC 8/20/2009 School Specialty Inc. (NasdaqGS:SCHS) AutoSkill International Inc. 8/19/2009 Intel Corporation (NasdaqGS:INTC) RapidMind, Inc. 8/19/2009 BeyondTrust Software, Inc. Beyondtrust Corporation 8/19/2009 NuGrowth Solutions LLC Strategic Insurance Software Inc. 8/19/2009 SmartPay Ltd. (NZSE:SPY) ProvencoCadmus Limited, New Zealand and Australian Payments 8/17/2009 Healthland American HealthNet, Inc. 8/14/2009 Blytheco, LLC Synergistic Software Solutions LLC, MAS Practice 8/14/2009 NNIT A/S NNIT Philippines Inc. 8/14/2009 IRIS Group Limited Formation Software Limited 8/14/2009 Alibaba.com Limited (SEHK:1688) Alisoft Holding Limited, Business Management Software Division 8/14/2009 Han Logistics, Inc. (OTCBB:HANO) OnSite Media LLC 8/13/2009 Industrial & Financial Systems IFS AB (OM:IFS B) Multiplus Solutions AS 8/13/2009 Fluke Networks, Inc. AirMagnet, Inc. 8/13/2009 Wallingford Software Limited MWH Soft, Inc. 8/12/2009 TAKE Supply Chain PSI Software, Inc. 8/12/2009 Xora, Inc. Gearworks, Inc. 8/11/2009 Epicor Software (Aust) Pty. Ltd. Spectrax Pty. Ltd. 8/11/2009 Ando Media, LLC Spacial Audio Solutions, LLC 8/10/2009 Extreme Networks Inc. (NasdaqGM:EXTR) Soapstone Networks Inc., Software Assets 8/10/2009 BMC Software Inc. (NYSE:BMC) MQSoftware, Inc. 8/10/2009 TAKE Supply Chain EntComm, Inc. 8/7/2009 Versata Inc. Everest Software, Inc. 8/7/2009 Gary Jonas Computing Ltd. Compusource Corporation 8/7/2009 VMware, Inc. (NYSE:VMW) SpringSource, Inc. 8/6/2009 Becton, Dickinson and Company (NYSE:BDX) ICPA, Inc. 8/5/2009 Apache Design Solutions, Inc. Sequence Design, Inc. 8/5/2009 MB Trading Holdings, LLC The Wizetrade Group, LLP 8/5/2009 TraceLink, Inc. SupplyScape Corporation 8/5/2009 GolfNet Inc. ISaAC Scoring Systems LLC 8/4/2009 Qtech Systems, Inc. delSECUR Corp. (OTCPK:DLSC) 8/4/2009 RedZone Robotics, Inc. ICOMMM, Inc 8/3/2009 Thomson Reuters PLC Vhayu Technologies Corp. 8/3/2009 Rudolph Technologies Inc. (NasdaqGS:RTEC) Rudolph Technologies Process Control Group 8/3/2009 OmniComm Ltd. Logos Technologies Ltd. 8/1/2009 Concur Technologies, Inc. (NasdaqGS:CNQR) Etap-On-Line 7/31/2009 Health Systems International, LLC @Global, Inc. 7/31/2009 Charles River Laboratories International Inc. (NYSE:CRL) Systems Pathology Company, LLC 7/31/2009 Civica UK Limited IBS OPENSystems Ltd., Revenues and Benefits Software Business 7/31/2009 United Business Media plc (LSE:UBM) The Fuel Team, LLC 7/30/2009 Mentor Graphics Corp. (NasdaqGS:MENT) Embedded Alley Solutions, Inc. 7/30/2009 Cybernet Systems Co. Ltd. (TSE:4312) Maplesoft 7/30/2009 VSA ApothekenSysteme GmbH PRO MEDISOFT Software Systeme für das Gesundheitswesen AG 7/29/2009 Wolters Kluwer Italia Srl S.B.G. Software Engineering s.r.l. 7/29/2009 The Peer Group, Inc. Asyst Technologies, Inc., Connectivity Software Business 7/28/2009 International Business Machines Corp. (NYSE:IBM) Ounce Labs, Inc. 7/28/2009 GFI Software Ltd. HoundDog Technology Limited 7/28/2009 Verisk Health, Inc. TIERMED SYSTEMS, LLC 7/28/2009 Evolution Benefits, Inc. BEMAS Software, Inc. 7/28/2009 DIVIDO-HANDSTEP ApS Handstep A/S 7/28/2009 Metaskil Plc Open Square Limited 7/27/2009 International Business Machines Corp. (NYSE:IBM) SPSS Inc. (NasdaqGS:SPSS) 7/27/2009 Vista Equity Partners MicroEdge, Inc. 7/27/2009 Phase Forward Inc. (NasdaqGS:PFWD) Maaguzi LLC 7/27/2009 Entertainment Arts Research Inc. (OTCPK:EARI) Strait Gate Games, Inc.

47| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 7/24/2009 Nokia Corp. (HLSE:NOK1V) cellity AG 7/24/2009 PeriGen (Canada) Ltd LMS Medical Systems (Canada) Ltd. 7/23/2009 Oracle Corp. (NasdaqGS:ORCL) GoldenGate Software, Inc. 7/22/2009 Metrofile Holdings Limited (JSE:MFL) Innovative Document Management (Pty) Ltd. 7/22/2009 V + Beteiligungs 2 GmbH ProximusDA GmbH 7/22/2009 LSI Corporation (NYSE:LSI) ONStor, Inc. 7/22/2009 OpenAir, Inc. QuickArrow, Inc. 7/21/2009 Ebsolut Oy Rihotec Oy 7/21/2009 UC4 Software GmbH UC4 Senactive Software GmbH 7/21/2009 Medfusion, Inc. Medem, Inc. 7/21/2009 Options Media Group Holdings, Inc. (OTCBB:OPMG) Bullroarer Corporation Pty Ltd. 7/20/2009 Initiative & Finance Investissement (ENXTPA:INIT) Sogelink SAS 7/20/2009 SAP AG (DB:SAP) SAF Simulation, Analysis and Forecasting AG (XTRA:S4X) 7/17/2009 CCH, Inc. Axentis, Inc. 7/17/2009 Hewlett-Packard Company (NYSE:HPQ) IBRIX, Inc. 7/17/2009 Teranet Inc. Atsource Solutions Inc. 7/17/2009 Trimble Navigation Ltd. (NasdaqGS:TRMB) CTN Data LLC 7/17/2009 Advanced Technologies Group, Ltd. (OTCBB:AVGG) Dan Khasis LLC, MoveIdiot.com 7/16/2009 WideOrbit, Inc. Google Inc., Radio Automation Business 7/16/2009 Glodyne Technoserve Ltd (BSE:532672) Broadllyne Technologies Ltd. 7/16/2009 Reddwerks Corporation SeayCo Integrators, Inc. 7/16/2009 System C Healthcare plc (AIM:SYS) Liquidlogic Limited 7/16/2009 Tyler Technologies, Inc. (NYSE:TYL) Parker-lowe & Associates of North Carolina, Inc. 7/16/2009 Resource Systems Pty Ltd Resource Systems & Services Pty Ltd. 7/15/2009 Netsmart Technologies, Inc. Crown Software, Inc. 7/15/2009 Phase Forward Inc. (NasdaqGS:PFWD) Covance Inc., Interactive Voice and Web Response Services 7/15/2009 Alterian plc (LSE:ALN) Techrigy SM2 7/15/2009 Advanced Computer Software plc (AIM:ASW) StaffPlan Ltd. 7/14/2009 Allegiance, Inc. Inquisite Inc. 7/14/2009 Blackboard Inc. (NasdaqGS:BBBB) Terriblyclever Design, LLC 7/13/2009 Numara Software, Inc. Criston SA 7/13/2009 Seshachal Technologies Ltd (BSE:531794) Enigma Digital Concepts Pvt. Ltd. 7/10/2009 Geoservices S.A. Petrospec Technologies, Inc. 7/9/2009 Motionsoft, Inc. Belmont Associates, Inc. 7/8/2009 JDS Uniphase Corp. (NasdaqGS:JDSU) Virtual Instruments Corporation 7/7/2009 Marlin Equity Partners, LLC Servigistics, Inc. 7/7/2009 Milestone Group plc (AIM:MSG) JumpStart Wireless Corporation 7/7/2009 AETIA Informatique Cornouaille Informatique Sarl 7/7/2009 Kapsch TIS d.o.o. Ring datacom d.o.o. 7/7/2009 Symphony Technology Group; Elliott Management Corporation; Elliott MSC Software Corp. (NasdaqGS:MSCS) 7/6/2009 Aepona Ltd. Valista, Ltd. 7/6/2009 GWS Gesellschaft für Warenwirtschafts-Systeme mbH SHD Großhandel- und Logistiksoftware GmbH & Co. KG, 7/3/2009 LM Ericsson Telephone Co. (OM:ERIC B) LHS Telekommunikation GmbH & Co. KG (DB:LHS) 7/3/2009 VanceInfo Technologies Inc. (NYSE:VIT) TP Corporation Limited 7/2/2009 i2 Limited Knowledge Computing Corporation 7/1/2009 ITI TranscenData Proficiency, Inc. 7/1/2009 Cybernet Systems Co. Ltd. (TSE:4312) Sigmetrix, LLC 7/1/2009 Cegedim SA (ENXTPA:CGM) Nomi Sweden AB 7/1/2009 Hyland Software, Inc. Valco Data Systems 7/1/2009 Access Intelligence plc (AIM:ACC) Ether-Ray Ltd. 7/1/2009 BasWare Oyj (HLSE:BAS1V) TAG Services Pty Ltd. 6/30/2009 MAVERICK Technologies LLC Program4 Engineering, Inc. 6/30/2009 StrongMail Systems, Inc. PopularMedia, Inc. 6/30/2009 LabVantage Solutions Inc. Life Technologies Corp., SQLLIMS Business 6/30/2009 Global Gaming AB (OM:GGF) Peerialism AB 6/29/2009 Brilliant Arts Multi-Media Holding Limited (SEHK:8130) Gold Asia Technology Limited 6/29/2009 Concerro, Incorporated PortBlue Corporation, CommandAware Hospital Incident 6/26/2009 Toluna plc (AIM:TOL) Greenfield Online Inc., Internet Survey Solutions 6/26/2009 InnovationsKapital; Investor Growth Capital; Via Venture Partners A/S Projectplace International AB 6/26/2009 Emazing Interactive Inc. (OTCBB:EMZG) Emazing Interactive Inc., Prior to Reverse Merger with China Net

48| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 6/26/2009 Erictel S.L. Owasys Advanced Wireless Devices 6/25/2009 ID Business Solutions Ltd. InforSense Ltd. 6/24/2009 Fine Point Technologies, Inc. Pervenio Limited 6/24/2009 Speakerbus Limited PAETEC Communications, Inc., Trader Voice Service Business 6/23/2009 ZeniMax Media Inc. Id Software, Inc. 6/23/2009 Vertical Computer Systems Inc. (OTCBB:VCSY) Priority Time Systems, Inc. 6/18/2009 Panda Security S.L. Panda Software (UK) Ltd. 6/17/2009 First American CoreLogic, Inc. BasePoint Analytics, Inc. 6/16/2009 Crimson Tide Plc (AIM:TIDE) CGA Enterprise Solutions Ltd., Sage Saleslogix Trade 6/16/2009 Jatheon Technologies Inc. NorthSeas Advanced Messaging Technology Inc. 6/16/2009 A9.com, Inc. SnapTell, Inc. 6/16/2009 WestView Capital Partners Wavelink Corporation 6/16/2009 eFridge, LLC KoolTech, LLC 6/15/2009 Softpro Systems Ltd. (BSE:532332) Cura Risk Management Software (Pty) Ltd. 6/15/2009 Beacon Application Services Corporation Newmerix Corporation 6/15/2009 Boeing Co. (NYSE:BA) eXMeritus, Inc. 6/12/2009 Groupe 21; Quadrivio SGR SpA RGI SpA (CM:RGI) 6/11/2009 Golden Gate Capital; Infor Global Solutions, Inc. SoftBrands, Inc. (AMEX:SBN) 6/10/2009 Antenna Software, Inc. Dexterra, Inc. 6/10/2009 Blue Star Capital plc (AIM:BLU) Pedagog Limited and Zimiti Limited and OmniPerception Limited 6/9/2009 IRDI Midi-Pyrénées Visualization Sciences Group, Inc. 6/9/2009 CRIF SpA FLS Services Inc. 6/9/2009 Italian Oven, Inc. (OTCPK:IOVE) Domain Management, Inc. 6/9/2009 Ipswitch, Inc. Hourglass Technologies, LLC 6/8/2009 Document Storage Systems, Inc. Informatix Laboratories Corporation 6/8/2009 Natural Convergence, Inc. NewStep Networks, Inc. 6/8/2009 OutStart, Inc. Hot Lava Software, Inc. 6/4/2009 Intel Corporation (NasdaqGS:INTC) Wind River Systems, Inc. (NasdaqGS:WIND) 6/3/2009 Parametric Technology Corporation (NasdaqGS:PMTC) Relex Software Corporation 6/3/2009 As Helmes MicroLink Eesti AS, Enterprise Resource Planning and Software 6/3/2009 Spencer Pharmaceutical Inc. EmergenSys Corp. (OTCPK:EMGS) 6/2/2009 Informatica Corp. (NasdaqGS:INFA) AddressDoctor GmbH 6/2/2009 Advent Venture Partners The Foundry Visionmongers Ltd. 6/2/2009 CA, Inc. (NasdaqGS:CA) Cassatt Corporation 6/1/2009 National Association Of Investors Corporation ICLUBcentral Inc. 6/1/2009 SS&C Technologies Inc. Unisys Corporation, MAXIMIS Business 6/1/2009 Microsoft Corporation (NasdaqGS:MSFT) Rosetta Biosoftware 5/30/2009 Merge Healthcare Incorporated. (NasdaqGM:MRGE) etrials Worldwide, Inc. (NasdaqGM:ETWC) 5/29/2009 Almerys SAS ENORA Technologies 5/29/2009 Data Systems International, Inc. Unibar, Inc. 5/28/2009 Human Solutions GmbH assyst/bullmer GmbH 5/28/2009 GK Software AG (DB:GKS) SOLQUEST GmbH 5/28/2009 LM Ericsson Telephone Co. (OM:ERIC B) Bizitek Software Development & Internet Technologies Inc. 5/27/2009 EMC Corporation (NYSE:EMC) Configuresoft, Inc. 5/27/2009 38 Studios, LLC Big Huge Games, Inc. 5/27/2009 BSI, Inc. First Advantage Corporation, Supply Chain Security Division 5/27/2009 Good Technology, Inc. InterCasting Corp. 5/27/2009 Iris Capital; Cathay Capital Private Equity DOTsoft, S.A.S. 5/26/2009 ActiveVideo Networks, Inc. Avinity Systems BV 5/26/2009 Gemalto NV (ENXTPA:GTO) O3SIS AG 5/26/2009 Strategic American Oil Corporation (OTCBB:SGCA) 172 Square Mile 3D Seismic Database In South Texas 5/21/2009 Ultra Electronics Holdings plc (LSE:ULE) Tisys SA 5/21/2009 DRS Technologies, Inc. Soneticom Inc. 5/20/2009 Warner Bros. Entertainment, Inc. Midway Games Inc., Substantially All Assets 5/20/2009 Mediware Information Systems Inc. (NasdaqCM:MEDW) SciHealth, Inc. 5/20/2009 Integrated Medical Software Limited IMS Maxims plc, Substantially All Assets 5/20/2009 Schlumberger Limited (NYSE:SLB) Techsia SA 5/19/2009 TeleCommunication Systems Inc. (NasdaqGM:TSYS) LocationLogic LLC 5/19/2009 SinnerSchrader AG (XTRA:SZZ) newtention technologies GmbH 5/18/2009 UFIDA Software Co. Ltd. (SHSE:600588) Maite Technology

49| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 5/18/2009 OptiCon Systems, Inc. (OTCBB:OPCN) Propalms, Inc. (OTCBB:PRPM) 5/18/2009 Merkle, Inc. CognitiveDATA, Inc. 5/18/2009 SofTech International Inc. National Dental Network L.P. 5/18/2009 Geodesic Ltd (BSE:503699) Interactive Networks Inc. 5/18/2009 Bivio Networks, Inc. FlowInspect SpA 5/18/2009 Interactive Intelligence, Inc. (NasdaqGM:ININ) AcroSoft Corporation 5/15/2009 McAfee, Inc. (NYSE:MFE) Solidcore Systems, Inc. 5/15/2009 Emptoris, Inc. Click Commerce, Inc., Contract and Service Management Solutions 5/14/2009 CDC Software Corporation Informance International, Inc. 5/13/2009 Oracle Corp. (NasdaqGS:ORCL) Virtual Iron Software, Inc. 5/12/2009 Data Storage Corp. Novavisions AG, Offsite Backup Service Business 5/12/2009 Velti Plc (AIM:VEL) Ad Infuse, Inc. 5/12/2009 Schlumberger Information Solutions EDS France, several assets including Artemis and Aix Services 5/11/2009 Ixia (NasdaqGS:XXIA) Catapult Communications Corp. 5/11/2009 Omtool Ltd. (OTCPK:OMTL) DocAuto, Inc., iImage Suite 5/11/2009 Artesys SA Naviline Software 5/11/2009 MedCore AB MiniDoc AB 5/11/2009 Bakbone Software Inc. (OTCBB:BKBO) ColdSpark, Inc. 5/11/2009 SAP AG (DB:SAP) Clear Standards, Inc. 5/8/2009 Marlin Equity Partners, LLC Click Commerce, Inc. 5/7/2009 PNC Equity Partners APEX Analytix, Inc. 5/7/2009 Satsafe Security AB Alandia Communication Systems AB 5/7/2009 Medasys SA (ENXTPA:MED) Mega-Bus International SAS 5/7/2009 W3i, LLC VoloMedia, Inc. 5/6/2009 JMT Consulting Group, Inc. Lavine BMC Technologies LLC 5/6/2009 Zed Worldwide, S.A. Player X, Ltd. 5/6/2009 Schober Information Services GmbH Zattoo Europa AG 5/5/2009 Micro Focus International plc (LSE:MCRO) Borland Software Corp. (NasdaqGM:BORL) 5/5/2009 Micro Focus International plc (LSE:MCRO) Compuware Corp., Testing and ASQ Business 5/5/2009 Rogue Wave Software, Inc. Visual Numerics, Inc. 5/5/2009 International Business Machines Corp. (NYSE:IBM) Exeros, Inc. 5/5/2009 Sparxent, Inc. XAware, Inc. 5/4/2009 SAP AG (DB:SAP) Highdeal, S.A. 5/4/2009 Regis Learning Solutions Inc. techniques.org Inc. 5/4/2009 Israel Aerospace Industries Ltd. Analytical Methods, Inc. 5/4/2009 Carlaw Capital II Corp. TrueContext Corporation 5/1/2009 Blackboard Inc. (NasdaqGS:BBBB) ANGEL Learning, Inc. 5/1/2009 Bakbone Software Inc. (OTCBB:BKBO) Asempra Technologies, Inc. 5/1/2009 Rosetta Capital Corporation; The Hawthorne Group Cheetah Technologies, L.P. 5/1/2009 Avaleo ApS Zealand Care A/S, Software Division 4/30/2009 Genetix Group plc (AIM:GTX) SlidePath Ltd. 4/30/2009 CrestPoint Solutions, Inc. KEG Technologies, Inc. 4/30/2009 Big Fish Games, Inc. Grubby Games Inc. 4/30/2009 Equiniti Limited Equiniti ICS Computing Limited 4/29/2009 Trend Micro Inc. (TSE:4704) Third Brigade, Inc. 4/29/2009 LLR Partners Inc. I-Many Inc. (OTCPK:IMNY) 4/29/2009 Blackbaud Inc. (NasdaqGS:BLKB) RLC Customer Centric Technology B.V. 4/29/2009 Expesite LLC Report Hawk, LLC 4/29/2009 Project Playlist, Inc. Total Music, LLC 4/27/2009 Amazon.com Inc. (NasdaqGS:AMZN) Lexcycle, Inc. 4/27/2009 McLeod Software Corporation ILENS Corp. 4/25/2009 Rurbanc Data Services, Inc. New Core Holdings, Inc. 4/24/2009 NTN Buzztime Inc. (AMEX:NTN) iSports, Inc. 4/24/2009 Mutares AG (DB:MUX) SHH GmbH SystemHaus Hemminger 4/23/2009 Telerik AD Omnicore Software GbR, JustCode 4/23/2009 Tekla Oyj (HLSE:TLA1V) 3-Design LLC 4/22/2009 Phase Forward Inc. (NasdaqGS:PFWD) Waban Software, Inc. 4/22/2009 LogLogic, Inc. ExaProtect Technology S.A.S. 4/22/2009 Pipeline Financial Group, Inc. 3D Markets, Inc. 4/22/2009 Giesecke & Devrient Gesellschaft mit beschränkter Haftung SmartTrust AB

50| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 4/21/2009 Inubit GmbH BusinessGlue GmbH, SOA governance business 4/21/2009 WRN Ltd. TSI Broadcast Ltd. 4/21/2009 Explorations Group Inc. (OTCBB:EXGI) ME2 Security, LLC 4/21/2009 Radialpoint, Inc. Casero, Inc. 4/21/2009 Ventyx, Inc. Structure Consulting Group, LLC, nMarket(R) Software Business 4/21/2009 Best Union Company SpA (CM:BEST) Sphere Network, Inc. 4/20/2009 Lumension Security, Inc. Securityworks, Inc. 4/20/2009 ICP - SOFTWARE B.A.Logiciels S.A. 4/20/2009 Cadis Software Limited C8 Software Limited 4/20/2009 Wipro Ltd. (BSE:507685) Nokia Corp., Mobile Broadcast Solutions Unit 4/16/2009 Unify Corp. (NasdaqCM:UNFY) AXS-One Inc. (OTCBB:AXSO) 4/16/2009 Applied Research Associates, Inc. Virtual Heroes, Inc. 4/16/2009 Haemonetics Corp. (NYSE:HAE) Neoteric Technology Ltd. 4/16/2009 Medasys SA (ENXTPA:MED) Thales, hospital information systems integration activity 4/16/2009 Zucchetti Group SPA P.M.C. Srl 4/15/2009 EMA Design Automation, Inc. DesignAdvance Systems, Inc. 4/15/2009 Tango Management Consulting, LLC InSite Analytics, LLC 4/14/2009 Enabling Pty. Ltd. Extend Technologies Pty Ltd., SAP Business One Practice 4/14/2009 KOREM Inc. Primus Geographics, Inc. 4/14/2009 Railcar Management, LLC 10East Corp. 4/10/2009 Equipole Finance Services SAS Eileo S.A. 4/10/2009 Pharmagest interactive (ENXTPA:PHA) Azur Software SARL 4/9/2009 Cisco Systems, Inc. (NasdaqGS:CSCO) Tidal Software, Inc. 4/9/2009 Edustructures LLC National Transcript Center, Inc. 4/9/2009 Kingdee International Software Group Co. Ltd. (SEHK:268) Guangzhou Qisheng Electronics Technology Co., Ltd. 4/8/2009 Tyler Technologies Inc. (NYSE:TYL) Assessment Evaluation Services, Inc. 4/7/2009 Savana Partners, LLC Epitome Systems, Inc. 4/7/2009 Tektronix Texas, LLC Aran Technologies Limited 4/7/2009 Elsevier B.V. Professional Development Software, Inc. 4/7/2009 ClickSoftware Technologies Ltd. (NasdaqCM:CKSW) ClickSoftware India Private Limited 4/7/2009 Iteris, Inc. (AMEX:ITI) Hamilton Signal, Inc. 4/6/2009 Activision Blizzard, Inc. (NasdaqGS:ATVI) California 7 Studios, Inc. 4/6/2009 Trigold Software Solutions Limited Crystal Software Solutions Limited 4/5/2009 Consona Corporation SupportSoft, Inc., Enterprise Business 4/3/2009 Syntellect Inc.; Enghouse Systems Ltd. (TSX:ESL) Trio Enterprise AB 4/3/2009 Vista Equity Partners SumTotal Systems Inc. (NasdaqGM:SUMT) 4/2/2009 matrix42 AG update4u Software AG 4/2/2009 Magnentus Capital AB; Ponderus Technology AB; Raspart Förvaltning Technology Nexus AB (OM:NEXU) 4/2/2009 SunGard Data Systems Inc. Genix Systems AG 4/2/2009 NRT Technology Corporation TNS Smart Network Inc. and Smart Processing Solutions Inc. 4/2/2009 Trivadis AG Trivadis Delphi GmbH 4/1/2009 Accountis Limited InterSoftware UK Limited 4/1/2009 The Siemens Automation and Drives Group Elan Software Systems SA 4/1/2009 ETS Fr Colruyt SA (ENXTBR:COLR) Mitto NV 4/1/2009 TVH Consulting SAS Access Commerce, Enterprise Resource Planning Business 4/1/2009 First Derivatives plc (AIM:FDP) Hologram Pty Ltd. 4/1/2009 Data Dimensions Corporation Olim, LLC 4/1/2009 Computrition, Inc. Common CENTS Solutions, Inc. 3/31/2009 Fidelity National Information Services Inc. (NYSE:FIS) Metavante Technologies, Inc. (NYSE:MV) 3/31/2009 LIGATT Security International, Inc. National Cyber Security 3/30/2009 u-blox Holding AG (SWX:UBXN) Geotate B.V. 3/30/2009 Aveva Group plc (LSE:AVV) iDesignOffice Pty. Ltd. 3/27/2009 Fujitsu Frontech Ltd. (TSE:6945) Fujitsu Transaction Solutions, Inc. 3/26/2009 L'argus de l'automobile Mixad SA 3/26/2009 Parayil & Mann Dealer Services, Inc. DealerUps, Inc. 3/25/2009 Social Solutions, Inc. Esteam, LLC. 3/24/2009 LimeLife, Inc. Tapatap, Inc. 3/23/2009 Asia Premium Television Group, Inc. (OTCBB:ATVG) Globstream Technology, Inc. 3/23/2009 Interventure Holding AG Majority stakes in Uptime services AG and Uptime products AG 3/23/2009 Oracle Corp. (NasdaqGS:ORCL) Relsys International, Inc.

51| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 3/20/2009 Unique Solutions Design Ltd. Intellifit Corporation 3/19/2009 SintecMedia Ltd. Pilat Media Global plc (AIM:PGB) 3/19/2009 PlayTech Cyprus Ltd. Player2Players Ltd. 3/18/2009 Intermedix Technologies, Inc HealthWare Solutions 3/17/2009 NitroSecurity, Inc. Chronicle Solutions, Inc. 3/16/2009 AmeriResource Technologies Inc. (OTCPK:ARIO) ATTO Solutions, LLC 3/16/2009 The Irus Group, Inc. Inferx Corp (OTCBB:IFRX) 3/13/2009 Ross Video Limited Media Refinery B.V. 3/12/2009 Trimble Navigation Ltd. (NasdaqGS:TRMB) QuickPen International Corp. 3/12/2009 ERTH Corporation The SPi Group Inc. 3/11/2009 Descartes Systems Group Inc. (TSX:DSG) Scancode Systems Inc. 3/11/2009 FJA AG (XTRA:FJH) COR AG Financial Technologies (XTRA:COC) 3/11/2009 Foresight Group ICA Group Ltd. 3/10/2009 iFAST Corporation Private Limited ING Platform Services Limited 3/10/2009 Tyler Technologies Inc. (NYSE:TYL) PulseMark, LLC 3/10/2009 Protacon Engineering Oy Metso Automation, Oy, DNAroAd - Roll Tracking System 3/9/2009 Hologram Industries SA (ENXTPA:HOL) Advestigo S.A. 3/9/2009 Teachscape, Inc. Edgenuity, Inc. 3/9/2009 Microchip Technology Inc. (NasdaqGS:MCHP) HI-TECH Software Pty. Ltd. 3/9/2009 Aleri, Inc. Coral8, Inc. 3/9/2009 Radio IP Software, Inc. ipUnplugged AB 3/6/2009 Pax Clean Energy, Inc. (OTCBB:PXCE) Mobile Video Development, Inc. 3/6/2009 Mortgagebot LLC Netupdate, Inc. 3/5/2009 ViewCast.com Inc. (OTCBB:VCST) Ancept Media Server, LLC 3/5/2009 Empower Software Solutions, Inc. Sage Compliance Services, Inc. 3/5/2009 Gemalto NV (ENXTPA:GTO) NXP B.V., Wireless Chip Services Business 3/5/2009 KARL STORZ Endoscopy-America, Inc. Global Care Quest, Inc. 3/5/2009 Triplefin LLC Flintfox International Ltd. 3/4/2009 Genesis Communications Limited Increase CRM 3/4/2009 Atlanta Equity Investors, LLC Empower Software Solutions, Inc. 3/4/2009 Phoenix Interests Inc. (OTCBB:PXIT) Stonewall Networks, Inc. 3/4/2009 AFS Technologies, Inc. Interactive Management Systems, Inc. 3/3/2009 Sungard Public Sector Holdings Limited Performance Pathways, Inc. 3/3/2009 Akcelerant Software, LLC Akcelerant Software Canada ULC 3/2/2009 Bitam, Inc. KPI On Line 3/2/2009 Inmedius Inc Generation21 Learning Systems, LLC 3/2/2009 Protacon Engineering Oy Futeco Oy 3/2/2009 COGES S.p.A. Impulsa Soluciones Tecnológicas SL 3/1/2009 Westmont Resources Inc. Get2Networks, Inc. 3/1/2009 Magellium SAS Générale d' Infographie, Defense Branch 2/27/2009 Avia Investments Plc The Plain Software Company Limited 2/27/2009 QUALCOMM Inc. (NasdaqGS:QCOM) Digital Fountain, Inc. 2/27/2009 Answers Systems Inc. Helm Software, Inc. 2/27/2009 Leica Geosystems, Inc. CT3, Inc. 2/26/2009 Nuance Communications, Inc. (NasdaqGS:NUAN) ZI Corp. (TSX:ZIC) 2/26/2009 Kudelski SA (VIRTX:KUD) OpenTV Corp. (NasdaqGM:OPTV) 2/26/2009 Calypso Technology, Inc. Codefarm Software Limited 2/26/2009 Xiocom Wireless, Inc. RoamAD 2/25/2009 Meridex Software Corp. (TSXV:MSC) Time Search Inc. 2/25/2009 PhotoChannel Networks Inc. (TSXV:PN) WorksMedia, Ltd. 2/25/2009 Foresight Group Diagnos.co.uk Limited 2/24/2009 Robert Stephen Consulting, LLC Meridex Software Corp., Facilities Management Software Division 2/24/2009 Versata Inc. AlterPoint, Inc. 2/23/2009 Wind River Systems, Inc. (NasdaqGS:WIND) Tilcon Software Limited 2/23/2009 AMICAS Inc. (NasdaqGM:AMCS) Emageon Inc. 2/23/2009 Tela Innovations, Inc. Blaze DFM, Inc. 2/23/2009 Robosoft SA PGES 2/23/2009 Visto Corporation Good Technology, Inc. 2/22/2009 Springsoft Inc. (TSEC:2473) Certess, Inc. 2/19/2009 Dassault Systemes SA (ENXTPA:DSY) Intercim, Inc.

52| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 2/19/2009 Explorations Group Inc. (OTCBB:EXGI) Hawk Biometric Technologies, Inc. 2/19/2009 Novell Inc. (NasdaqGS:NOVL) Fortefi Ltd. 2/18/2009 Netezza Corporation (ARCA:NZ) Tizor Systems, Inc. 2/18/2009 SAP AG (DB:SAP) Coghead, Inc. 2/18/2009 CSG Openline BLUEROADS Corporation 2/17/2009 CENTRA (Education & Training Services) Ltd. IDL Systems Ltd. 2/14/2009 - Retalix Ltd. (NasdaqGS:RTLX) 2/14/2009 Helix Health Limited Health Ireland Partners Ltd. 2/13/2009 Esmertec AG (SWX:ESMN) Purple Labs SA 2/12/2009 Informatica Corp. (NasdaqGS:INFA) Applimation, Inc. 2/12/2009 Square Enix Ltd. Eidos plc (LSE:EID) 2/12/2009 Phoenix Medical Supplies Ltd. Computer Systems for Distribution plc 2/11/2009 Anything Trucker, Inc. MyFreightWorld, Carrier Management Division 2/10/2009 Orsus Solutions USA, Inc. Cinario Ltd. 2/9/2009 Telephonetics Plc (AIM:TPH) Eden Origin Limited 2/9/2009 Latis Networks, Inc. ProtectPoint Security, Inc. 2/9/2009 CDC Software Corporation Categoric Software Corporation 2/9/2009 Triplefin LLC Flintfox USA 2/6/2009 Elisa Oyj (HLSE:ELI1V) Trackway Oy, Asset Management and Logistics System Business 2/5/2009 iBrands Corp. (OTCPK:IBRC) Richard Software Services, Inc. 2/5/2009 Descartes Systems Group Inc. (TSX:DSG) Oceanwide USA Inc. 2/5/2009 Sinon Invest Holding GmbH mobile messaging solutions GmbH 2/4/2009 Kantar Group Red Dot Square Solutions Ltd. 2/4/2009 Oracle Corp. (NasdaqGS:ORCL) mValent, Inc. 2/4/2009 Warner Bros. Interactive Entertainment Inc. Snowblind Studios, Inc. 2/4/2009 CrimsonLogic eTrade Services Pte. Ltd. GridNode Pte. Ltd. 2/3/2009 Telvent Farradyne, Inc. Northern Lakes Data Corp. 2/3/2009 Finsbury Solutions Limited Compassoft Corporation 2/3/2009 Educational Options Inc. Siboney Learning Group Inc. 2/3/2009 UBI Soft Entertainment SA (ENXTPA:UBI) Action Pants, Inc. 2/2/2009 GFI Solutions, Inc. Fortsum Business Solutions Inc. (TSXV:FRT) 2/2/2009 Unify Corp. (NasdaqCM:UNFY) CipherSoft, Inc. 2/2/2009 Amcom Software, Inc. SDC Solutions, Inc. 2/2/2009 Access Corp. Radius Software Inc. 1/30/2009 D.I.M.O. Gestion SAS Ithec International SA 1/30/2009 Accuity, Inc. CB.Net Ltd. 1/30/2009 HighJump Software, LLC Insight Distribution Software 1/28/2009 Carl Zeiss Industrielle Messtechnik Gmbh Holometric Technologies GmbH 1/28/2009 SureHarvest, Inc. ScanControl Inc. 1/28/2009 LiveCargo, Inc. CMWare, Inc. 1/27/2009 PRO Medicus Ltd. (ASX:PME) Visage Imaging, Inc. 1/27/2009 Archer Technologies LLC Brabeion Software Corporation 1/27/2009 Cisco Systems, Inc. (NasdaqGS:CSCO) Richards-Zeta Building Intelligence, Inc. 1/27/2009 Nokia Corp. (HLSE:NOK1V) bit-side GmbH 1/26/2009 Smart & Co. SAS La Fourchette 1/26/2009 BasWare A/S Itella Information Logistics AS, Invoice Automation Solution Business 1/26/2009 DemandTec, Inc. (NasdaqGM:DMAN) Connect3 Systems, Inc. 1/26/2009 SVOX AG Siemens AG, Speech Processing Unit 1/26/2009 MeisterLabs GmbH MindMaker 1/26/2009 iBrands Corp. (OTCPK:IBRC) E-Strategic Solutions, LLC 1/24/2009 ADP Dealer Services Group Automaster Oy 1/23/2009 DealerTrack Holdings, Inc. (NasdaqGS:TRAK) American Auto Exchange, Inc. 1/23/2009 Crossknowledge Epistema SARL 1/22/2009 VeriSign Inc. (NasdaqGS:VRSN) Certicom Corp. (TSX:CIC) 1/22/2009 Xactly Corporation Centive, Inc. 1/22/2009 Superwire.com, Inc. (OTCPK:SUPI) Ad Systems, Inc. 1/22/2009 Genesys Telecommunications Laboratories, Inc. SDE Software Development Engineering GmbH 1/22/2009 Mentor Graphics Corp. (NasdaqGS:MENT) Agility Design Solutions Inc., C Synthesis 1/21/2009 Hexagon Metrology, Inc. Technodigit SARL 1/21/2009 Sybase, Inc. (NYSE:SY) Paybox Solutions AG

53| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX G: SELECT 2009 SOFTWARE INDUSTRY MERGERS AND ACQUISITIONS (CONTINUED) Date Buyer Seller 1/21/2009 Manatron Inc. Software Techniques, Inc. 1/20/2009 Riverbed Technology, Inc. (NasdaqGS:RVBD) Mazu Networks, Inc. 1/20/2009 Compliance 360, Inc. Tavilo, Inc. 1/20/2009 Innova31, S.C.R., S.A. Verbio Technologies S.L. 1/20/2009 Duolog Technologies Ltd. Beach Solutions Limited 1/20/2009 UBI Soft Entertainment SA (ENXTPA:UBI) Southlogic Studios 1/20/2009 GenArts, Inc. SpeedSix Software Limited 1/19/2009 QHR Technologies Inc. (TSXV:QHR) Momentum Healthware, Inc., Financial Software Division 1/19/2009 Gemcom Software International Inc. Team Tech Australia Pty Ltd. 1/16/2009 LMI Aerospace Inc. (NasdaqGS:LMIA) Powerway, Inc. 1/16/2009 Vodafone Group plc (LSE:VOD) Central Telecom UK Ltd 1/16/2009 CrimeCog Technologies, Inc. DDP Police Service, Inc. 1/15/2009 BillWise, Inc. Primal Solutions Inc., Substantially all Assets 1/15/2009 International Business Machines Corp. (NYSE:IBM) Outblaze Limited 1/15/2009 Compta SA (ENXTLS:COMAE) Softmaker - Software e Sistemas Informaticos 1/15/2009 Meta4 NV Business T&G SA, Human Resource Division 1/15/2009 Tangoe, Inc. InterNoded, Inc. 1/15/2009 Hale Capital Partners, LP LocationLogic LLC 1/14/2009 Joyent, Inc. Reasonably Smart 1/14/2009 Meez, Inc. Pulse Entertainment, Inc. 1/14/2009 Agerkilde A/S Hea El Og Elektro A/S 1/14/2009 Verisk Inc. D2Hawkeye, Inc. 1/14/2009 Medicity, Inc. Novo Innovations, Inc. 1/14/2009 Harris Computer Systems, Inc. Global Software Corporation 1/14/2009 Petris Technology, Inc. ZEH Software, Inc. 1/13/2009 Ascend Venture Group, LLC; Brand Affinity Technologies, Inc. NextMedium, Inc. 1/13/2009 Three Pillar Software Inc. PKR Internet LLC 1/13/2009 AVG Technologies N.V. Sana Security, Inc. 1/13/2009 Quest Software Inc. (NasdaqGS:QSFT) MonoSphere, Inc. 1/13/2009 Orange Business Services Data & Mobiles S.A. 1/13/2009 Grey Island Systems International Inc. (TSXV:GIS) FleetPoint, LLC and Swiftsure Technologies, Inc. 1/12/2009 Brady plc (AIM:BRY) Commodities Software (UK) Limited 1/12/2009 Optimus S.A. (ENXTPA:MLOPT) EuroWin 1/12/2009 Rally Software Development Corp. 6th Sense Analytics, Inc. 1/12/2009 Quantal International, Inc. Bullrun Financial, Inc. 1/12/2009 Petris Technology, Inc. Intervera, Ltd. 1/12/2009 AbleNet, Inc. SoftTouch Inc. 1/9/2009 Midsummer Capital, LLC; Laurus Funds Inc.; Valens Capital Retail Pro Inc., Substantially All Assets 1/9/2009 ubroadcast, inc. (OTCBB:UBCI) Diamond I, Inc. 1/9/2009 Oleen Pinnacle Healthcare Consulting, LLC Partners in Health Systems LLC 1/8/2009 Business Applications Associates Ltd. Paymetric, Inc., XiBuy 1/7/2009 C-Lock Technology Inc. C-Lock Technology-Canada 1/7/2009 Hypertherm, Inc. MTC Software Inc. 1/7/2009 Clearway Technologies Partners Inc. Monitor Analytics LLC 1/7/2009 Aspect Software, Inc. AIM Technology, Inc. 1/7/2009 Wave-Technology Solutions Group Metronome, Inc. 1/7/2009 Sun Microsystems Inc. (NasdaqGS:JAVA) Q-layer NV 1/7/2009 Nexant, Inc. Excelergy Corporation 1/7/2009 Alexander Gallo Holdings LLC Verdict Systems LLC 1/6/2009 MBI Benefits, Inc. CapMed Corporation 1/5/2009 Mastercard Incorporated (NYSE:MA) Orbiscom Limited 1/5/2009 SolarWinds, Inc. Kiwi Enterprises Limited 1/5/2009 CA, Inc. (NasdaqGS:CA) Orchestria Corporation 1/5/2009 Aptina Imaging, Inc. Chipnuts Technology (Shanghai), Inc., Mobile Phone Software 1/2/2009 International Capital Trust LLC Jobsinsite Inc. 1/1/2009 Toon Boom Animation Inc. Cambridge Animation Systems Ltd. 1/1/2009 Fujitsu Micro-Electronics Europe Gmbh Comneon GmbH, Software Development Centre In Linz

54| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS Company Announcements Summaries Activision Blizzard, Inc. Activision Blizzard, Inc. may look for acquisitions in the intellectual property sector. Robert Kotick, CEO of the firm said that Activision Blizzard is considering buyback and acquisitions worth $3 billion. He added that he wanted the company to focus mainly on development of original content for Nintendo's Wii game console.

Activision Blizzard, Inc. believes that the current market environment will provide acquisition opportunities. Thomas Tippl, CFO of Activision Blizzard, said: “Now turning to the balance sheet. On December 31, we had no debt and approximately $3.1 billion in cash and investments, a slight increase over the prior quarter. In today's capital market environment, we continue to view the strength of our balance sheet as a major competitive advantage and we are putting the cash to work. On our last call, we announced that our Board had authorized up to $1 billion of share purchases and to date we have purchased approximately 13 million shares for approximately $126 million at an average price of $9.68 a share. In addition, we believe a prolonged and challenging macroeconomic environment might provide acquisition opportunities for which we are well positioned with our balance sheet, our more predictable cash flow outlook resulting from Blizzard’s subscription business model, and the backing of Vivendi as a shareholder.”

Adobe Systems Inc. Adobe Systems Inc held its earnings conference call. The company will continue to look for acquisition opportunities. Shantanu Narayen, President and CEO of the company said: “Well, we continue to look for acquisition opportunities. We've said that the sweet spot for Adobe tends to be small technology companies that fill out holes in our portfolio, as well as gets us great D&A talent. But we will continue to look for opportunities to capitalize on the multiple opportunities that we have.”

Adobe Systems Inc. recently held its earnings conference call. The company officials talked about the company’s business and future plans. Shantanu Narayen, President and Chief Executive Officer of the firm said, “We will continue to focus on controlling costs, as we did in Q1, by closely managing variable marketing, discretionary spending, and headcount growth. At the same time, we will continue to make strategic investments that we believe will position us well for the future.”

Adobe Systems Inc intends to make small acquisitions in 2009. The company intends to take advantage of the global economic crisis that has made valuations attractive. Chief Executive of the company Shantanu Narayen said: "There are small technology companies where you get some great technology and great people... we will continue to be aggressive at looking at them." He added: "A lot of companies are finding their valuations reduced or finding it hard to raise capital in these economic times. But we're not bottom feeders, we're looking for interesting companies that are going to help drive the future."

Alibaba.com Limited Alibaba.com Ltd. is confident it will see growth in profit in 2010. The CEO, David Wei told shareholders that the company reported a downfall in net profit since the fourth quarter of 2008 because of higher marketing costs and increased spending on infrastructure and technology. Wei also said the company is still in talks regarding a joint venture in India, and continues to evaluate a separate partnership in the U.S. He added the company is also looking for other acquisition opportunities globally.

Alibaba.com Limited said that the company will look for merger and acquisitions. Maggie Choo, Alibaba’s director for Europe, the Middle East and Africa, said: “Europe, especially the U.K., is a strategic market for us.” “In Europe, Alibaba has just begun to implement a three- year plan. In the first year it will raise brand awareness, in the second it will look for mergers and acquisitions, and in the third it will focus on revenue growth,” Choo added. “Global expansion is our strategy and we are constantly looking at merger and acquisition opportunities,” Choo said.

Alibaba.com Limited will spend more on acquisitions. The company intends to spend at least $200 million on acquisitions and other investments in the next few years. Wei Zhang, head of Alibaba's strategic investment unit stated that Yahoo Inc has committed an additional $200 million to $300 million to Alibaba.com Limited over the next two to three years. She said that the company will focus investments on companies specializing in mobile Internet, electronic payment and other technologies. Alibaba plans to retain a minority stake in companies it invests. Joe Tsai, Alibaba's chief financial officer said: "We felt that it's important for us to have an investment operation where we look at new technologies. We are looking for opportunities that would complement our core business."

Alibaba.com Limited plans to team up with HSBC Holdings plc and Citibank A.S. as it aims to turn its Alipay unit into an international online payment platform, sources reported. David Wei, CEO of Alibaba, said that his firm intends to spend more on marketing, research and development, as well as recruitment this year. He added that the company is also seeking opportunities in acquiring e- commerce companies with new technology.

Alibaba.com Limited intends to increase investments in 2009. The company has a war chest of HKD 7.84 billion. Chairman of the company, Jack Ma Yun said: "We are always looking for acquisition opportunities, so we've conserved cash for potential investment if a suitable candidate comes along." The company’s shares rose by 15.4% to HKD 11.82.

Allied Digital Services Ltd. Allied Digital Services Ltd. said that the company has raised $50 million through a qualified institutional placement (QIP) for acquisitions. Nitin Shah, CMD, Allied Digital, said, “We have gathered about $50 million via QIP. The reason is that the field that we are into i.e. infrastructure management and services (IMS) is growing very fast globally. We wanted to enter into a newer and advance market and that - according to us with our experience, it could be possible only through inorganic growth. So, we have to gather this money basically to look out for some acquisitions and also for expansion of our existing service delivery capacity. We did an acquisition last year about 15 months in USA. It helped us in penetrating into the entire US market. I think we could see a lot of fraction and a good amount of business that we could gather. So we are probably looking out for some additional acquisitions which help us in penetrating in the shortest span. So that is the inorganic growth that we are looking out for.”

Allied Digital Services Ltd. said that the company is looking for acquisition opportunities in Europe and Australia. The company is evaluating firms in the infrastructure management space and expects to close $100 million buys by the next quarter. Nitin Shah, Allied Digital's chairman and managing director, said: “We are looking to buy firms in Europe as part of inorganic growth plans, for which evaluations are underway.” The firm had a cash reserve of about INR 3 billion at the end of the June quarter. The company is also looking to raise some additional capital through options such as debt, equity for the acquisitions.

55| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Asseco Poland SA Asseco Poland SA plans to make acquisitions. Adam Goral, CEO of Asseco Poland SA told Rzeczpospolita that the firm his eyeing further acquisitions in 2010 and big IT projects for the public administration.

Asseco Poland SA said that the company might spend $400 million in the next 2 years to 3 years to acquire more small rivals around Europe. Chief Executive of Asseco Poland, Adam Goral, said: “Asseco Poland is now in discussions on further acquisitions with 17 companies in the Nordics, Southeastern Europe, Austria, Spain, Italy, and Hungary.” “We won't change our strategy of building around small companies,” he added.

Asseco Poland SA is looking at expanding its operations in southeastern Europe (SEE) through acquisitions in Croatia and Romania, Zagreb-based media reported on August 11. "We are planning another four acquisitions, [including] one in Croatia, one in Romania," Poslovni Dnevnik quoted the president of Logos’s managing board, Drazen Pehar, as saying. He added that the company has not taken a decision on the other two acquisition targets. Pehar, who is expected to be named the managing board member of Asseco in charge for the company's regional operations, said the deals should be finalized by September but did not divulge the names of the potential acquisition targets. The new acquisitions will be funded by the European Bank for Reconstruction and Development (EBRD) through some €15 million equity investment in new shares of Asseco SEE and a €7.0 million loan.

The CEO of Asseco Poland SA, Adam Goral told PAP that the company may soon acquire a Danish company and is working on acquisitions in Spain, Germany, Switzerland and Italy, acquisitions on the Polish market also cannot be ruled out. "The probability that we will be joined by the Dannish firm is tremendous." Asseco is also eyeing a new acquisition. "In Germany we are looking for a good firm to take over, preferably in the banking sector," the CEO said. Other markets where the company is interested include Portugal, Italy and Switzerland. "We are working out the Portugese market, but for now there are few firms there worth interest," Goral said. "We are conducting talks on the Italian market; we are also talking to one firm in Switzerland." Despite various acquisitions on the Polish market, Asseco still sees potential for new acquisitions. "There are firms in Poland that we would like to buy, they are operating on the market we are absent at," Goral said. "This is the market that will grow in the following years, in part because of EU subsidies. One of the firms named the price tag, the other one sent documentation."

Asseco Poland SA recently acquired a majority stake in Raxon Informatica. The company paid €15.4 million for 55% stake in the company. It is planning to expend €50 million on future acquisitions in this part of Europe.

Baidu, Inc. Baidu Inc may look at acquisition opportunities. Gong Yu, CEO of Baidu's new video company stated that Baidu did not ruled out the possibility of acquisitions for rapid expansion. The company currently does not have any definite acquisition targets.

Baidu Inc. is looking for acquisition opportunities. Chief Financial Officer of the company, Jennifer Li said: “People approach us and we get to look at a lot of things. Internet is at an early stage of its development. It’s dynamic and we need to stay ahead.” He added that any acquisitions won’t distract the company from focusing on its main search business. There is “huge potential” to increase customers, Jennifer Li said.

BasWare Oyj BasWare Oyj will continue to actively screen potential acquisition targets. These include the strategic segments and the expansion of Automation Services in particular. The firm also plans to reinforce its direct sales operations and develop its partnership network towards a few strong partnerships during 2010 – 2012.

Basware Oyj reported net profit of €3 million for the third quarter of 2009. The company stated that it will continue to review possible acquisition targets during 2009 in order to expand its distribution channel and product portfolio in international markets.

BasWare Oyj announced that its net sales grew by 9.6% to €44, 446 thousand. Its operating profit grew by 71.8% to €3, 738 thousand. The firm said, “Basware has complemented its organic growth with acquisitions. The company will continue to review possible acquisition targets during 2009. The aim of the acquisitions is to expand the company's distribution channel and product portfolio in international markets.”

BasWare Oyj plans to make acquisitions. The firm said that it will continue to actively monitor the possibilities of strategy supporting acquisitions. It added that firm’s acquisition strategy is supported by Basware's strong operative cash flow and balance sheet. BasWare also said that with the acquisitions, it will support the expansion of the distribution channel or enhance the EPP Automation Services offering.

BMC Software Inc. BMC Software Inc. said that the company continues to invest in alliances and acquisitions. Robert E. Beauchamp, President, Chief Executive Officer and Director of BMC Software said, “We continue to invest in our business to enhance our market leadership through internal development, market alliances, and acquisitions, while maintaining our strong financial discipline and controlling expenses. The end result was another quarter of solid cash flow and increased earnings.”

BMC Software Inc. said that the company will continue to look for sensible acquisitions. Bob Beauchamp, BMC Software, President and CEO, said: “On the M&A, our answer to that really hasn't changed since the last conference call. I would say it is fair to say we are more cautious right now in doing acquisitions. It is just like buying a lot of things. Is now the time to buy, or are prices going to continue to come down? We see some of the smaller companies under duress, and other companies are under duress, so we think that prices may have room to improve on some of these other assets out there, that we might be interested in. So we are being more cautious. We are being more financial in how we look at it, to make sure that the numbers work, but we will continue to look at acquisition, as a way to help drive the evolution of the Company when it makes sense. I think it is fair to say we are a little more cautious right now than we have been in previous, certainly in previous years, but about the same as we have been the last couple of quarters.”

56| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries CDC Corp. CDC Corp. said that the company is looking for acquisitions. Peter Yip, Executive Vice Chairman and Chief Executive Officer of CDC Corp, said: “We feel it is strategically important for CDC Games to launch domestic online games as we intend to search for more domestic online games titles as well as investing in domestic game studios. In closing, we are very excited we have monetized a key asset with the completion of CDC Software IPO. This is part of a first phase of our long-term strategy to unlock shareholder value. Our scalable and global infrastructure enables our key businesses like CDC Software to scale out and to grow rapidly, organically, and through acquisitions.”

CDC Corporation announced today that an affiliate of the company has closed the purchase of the Company’s 3.75% Senior Exchangeable Convertible Notes Due 2011 with one Note holder that was announced on March 5, 2009, for cash, as well as signed and closed, today, an additional purchase of the entire remaining portion of the holdings of Notes from another Note holder. Peter Yip, CEO of CDC said: “With our strong balance sheet and present operational performance, we plan to resume pursuing strategic and opportunistic acquisitions for expanding our software platform, such as our recently-announced Categoric transaction, as well as increasing our market share in China for our MMO online games business. We remain confident of our global business which is reinforced by our strong presence in China."

Check Point Software Technologies Ltd. Check Point Software Technologies Ltd held its earnings conference call. The company intends to make acquisitions. Gil Shwed, Chairman and CEO of the company said: “I think we continue to look for good acquisition opportunities. I think as we have seen in the last few years we are ready to do all types of acquisitions from small technology companies, large companies in new markets into existing companies within our core market. I think we already see our investment looking into companies and identifying the strategic potential.”

Gil Shwed, Chairman & CEO of Check Point Software Technologies Ltd. said, “It was accretive and it was I think better than we expected. We also look at acquisitions very, very carefully and we saw very good performance.” He added, “We're looking very actively on more opportunities to acquire companies. Having said that, it is not easy to find very good companies that would fit our vision and would fit our architecture, but in terms of our willingness to acquire more companies, we want to do that. We feel that Nokia is behind us, so we are -- our resources are available to do more deals. And we're actively looking to see what can make sense and fit our vision and strategy.”

Check Point Software Technologies Ltd., which reported strong first quarter results, is looking for acquisitions. The company has recently acquired Nokia's security appliance business. Check Point Chairman and Chief Executive Gil Shwed said: “Nokia allows us to show strong growth this year.” “Following the Nokia deal Check Point is continuing to look for acquisitions,” Shwed added. The company has $1.59 billion in cash and investments.

Check Point Software Technologies Ltd held its earnings call for the third quarter of 2009. Gil Shwed, Chairman and CEO of the company said: “Our plan is to grow and part of growth is through acquisitions. We started to learn how to do it and we’ve very focused on that. The long answer, the main focus of what we have is doing what we’re doing in a healthy way, in the right strategic way complementing our vision, and not do acquisitions for the sake of acquisitions or for the sake of making up numbers.”

Comarch SA Janusz Filipiak, CEO of Comarch SA, said that Comarch eyes an acquisition in France in 2011. “If SoftM becomes profitable next year, as we expect, we will be more inclined to invest in France. I think that the acquisition of a French company should cost a comparable amount to the takeover of SoftM.”

Comarch SA plans to strengthen its position in foreign markets and is launching a software package for SMEs in the German market, Puls Biznesu reported. It was informed that the company also eyes a significant IT project implementation for a big European mobile telecom player and seeks to make acquisitions in Asia, Comarch Software’s CEO, Piotr Piatasa told the daily.

Corel Corporation Corel Corporation announced that Jeff Hastings, President and General Manager, Digital Media has resigned and will be leaving the Company effective March 27, 2009 to pursue other opportunities. Hastings will continue to be involved with Corel in the coming months, working with Vector Capital, Corel's majority shareholder, to identify potential acquisition and partnership opportunities for Corel in the digital media space.

Corel Corporation recently reported its audited consolidated financial statements for the years ended November 30, 2007. The company stated, “We intend to focus our acquisition activities on companies or product lines with proven and complementary products and established user bases that we believe can be accretive to our earnings shortly after completion of the acquisition. While we review acquisition opportunities on an ongoing basis, we currently have no binding obligations with respect to any particular acquisition.”

Cyberplex Inc. Cyberplex Inc. announced that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P., which have agreed to purchase, on a bought deal basis, 9,375,000 common shares of the Company at a purchase price of $1.60 per common share, for aggregate gross proceeds of $15,000,000. The Company intends to use the net proceeds of the prospectus for general corporate purposes and potential acquisitions.

Cyberplex Inc. reported its financial results for the fiscal year ended and fourth quarter ended Dec. 31, 2008 with total revenue of $57.3-million. The company was able to increase its credit facility with the Royal Bank during the quarter from $5 million to $7.1 million. Isaac Osiel, chief financial officer of Cyberplex said: "By securing this increased amount, from one of Canada's leading financial institutions, we have further solidified our capital objectives to ensure sufficient liquidity to support our strategy of continued aggressive organic growth and strategic acquisitions."

57| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Descartes Systems Group Inc. Descartes Systems Group Inc. plans to make acquisitions. Art Mesher, CEO of the firm said, “Our objective is to serve customers and our objective is to return invested capital. Right now we're serving customers doing what we want and we're investing our capital and returning it at a rate of under four years and to me that's a pretty good recipe..." He added, “We are always buying companies. We are always in due diligence. We're a consolidator. I think we've bought 10 or 11 over the past few years. ” He also said, “We introduced a frame work in September called Resources In Motion Management framework which really represents the three pillars of our acquisition strategy and we're just continuing to chop down that tree. Our geographic interests in terms of where we're comfortable, we continue to want to manage our risks in foreign markets carefully so I wouldn't be expecting that we would do anything Herculean in a market where I only have seven employees and we'll just continue to proceed cautiously and carefully forward-looking at small, medium and large acquisitions across those three pillars.”

Descartes Systems Group Inc is planning a discounted issue of common shares to raise CAD 40 million. The company plan to use the proceeds for general corporate purposes and for potential acquisitions.

Descartes Systems Group Inc. said that the company is very actively looking for acquisitions. In a call with Analyst, Arthur Mesher, Chief Executive of Descartes Systems, said: “Descartes is extremely active in its attempts to acquire companies within the $10 million range in the coming quarters.” “The company is currently interested in sectors like wireless GPS, homeland securities and supply chain execution,” Mesher added.

Descartes Systems Group Inc. recently held its earnings conference call. The company officials talked about the company’s business and future plans. When asked about acquisitions, Art Mesher, CEO of the firm said, “Our core strategy for developing our business is clear. We have a buy and build strategy. We have built and bought solution and businesses in three distinct markets, which we believe are converging: the global trade management market, the mobile resource market, and the supply chain execution market. We concentrate on running businesses that generate cash flow. We look to develop our business by using that cash flow to buy and build in these markets. Then we operate with what we bought or built, generate more cash, and continue to invest that cash in buying more companies. He added, “We continue to generate large quantities of cash and we've used our cash now to complete two more acquisitions. We've grown and developed our business, we've reinvested our cash flows, and we continue to accelerate in the worst of economic times.” eBay Inc. John Donahoe, Chief Executive Officer of EBay Inc. said that the firm is considering partnerships and acquisitions in smaller countries where classifieds are the preferred way for buyers and sellers to connect. He added, “I’m going to be very aggressive looking for opportunities to strengthen that portfolio, either organically or through acquisitions. We have the financial strength and capacity to do a sizeable acquisition. When we see an opportunity that will really strengthen the portfolio, we’ll move.”

Bob Swan, SVP and CFO of eBay Inc. said, “We have a wonderful global footprint. The Gmarket acquisition protects and expands an important market for us in Korea, but also we believe will allow us to expand in Asia more broadly over time. Latin America, we own 18% of a wonderful company, MercadoLibre, who's the leading player, and we're comfortable with that 18% interest. Any the other region of the world where we are relatively underrepresented as Eastern Europe, and we continue to look for ways to grow in Eastern Europe, either organically and/or acquisitively, and we will continue to evaluate those over time. That is the core eBay business. In terms of adjacencies, we made an acquisition last year for classifieds in Denmark that we think was a good addition to our portfolio, a strategically good return on capital. Over the long haul we'll continue to look for adjacent kind of offerings that leverage our core businesses that help us compete outside the US more effectively.”

EBay Inc. is looking to make strategic acquisitions and will use its offshore cash for the purpose. Bob Swan, CFO of the company said: "Continuing to use offshore cash to grow through acquisitions will be a priority."

Ebix Inc. Ebix Inc. is looking at acquisitions to accelerate its growth process. “We will make a few acquisitions, and coming back to the second question on acquisitions, we clearly will make a few acquisitions. You could see us make possibly, you will -- you could see us go after two kinds of companies. One are relatively smaller acquisitions, a kind of acquisition we have made in the past, which tend to be, have to - have always been accretive. We have never made an acquisition that was not accretive on day one. And then there is, there are larger opportunities. You could possibly see us. And clearly, going after some larger acquisitions, but the only case in which we'll go after a larger acquisition is only if we see a slam-dunk situation,” said Robin Raina, Ebix, Inc’s Chairman, CEO, and President. Ebix, Inc. recently reported its financial results for the fourth quarter (Q4 '08) and year ended December 31, 2008. Ebix’s President and Chief Executive Officer, Robin Raina, commented, “We are pleased with these results as they reflect the continued success of the company in 2008. We look at these results as a step forward towards establishing Ebix as the dominant infrastructure exchange services player in the global insurance markets.” Raina said, “We believe that the present economic time serves as an opportunity to make some symbiotic accretive acquisitions at the right costs. We continue to generate strong cash flows and believe that we can put that cash to good use by reducing our debt and also making some sensible acquisitions.”

Electronic Arts Inc. The CEO of Electronic Arts Inc., (EA) John Riccitiello said that the digital videogame market will overtake the traditional console and packaged goods business in 2010. "It's new to compete in that sector, so when people think of games they traditionally think of the Xbox, the PlayStation and the Wii, and they forget about all these online services that are out there – subscription, microstransactions, games they find on Facebook or if they go to Pogo," Riccitiello told Reuters. "If you add all that stuff up, it's almost half of the industry now. It's about 40% - 45%. Next year it's likely to be a larger share of the total industry and it'll be bigger than the console games all put together," added Riccitiello. "From the perspective of Electronic Arts, when we look at M&A we look for three things. We're constantly trying to conquer new territory in particular on the digital side, so when you ask about deals, we're mostly looking at the digital side, we're mostly looking at compatible organizations from a culture perspective and of course you need to agree on price. And those are three hurdles that are often difficult to reach," he admitted.

Electronic Arts Inc. announced on August 11, 2009 that the company is continuing to look at smaller-scale acquisitions and rubbed off interest in any blockbuster deal. The company said it was interested in certain regions. Chief Financial Officer of Electronic Art, Eric Brown, said: “Electronic Arts is underweighted in Asia relative to its global sales.” The CFO did not reveal whether the company was looking to buy anything in Asia. “The company was interested in deals that would allow EA to buy franchises or online publishing technologies to move more into the consumer-to-consumer marketplace,” Brown said. “Companies that fit into these categories generally have valuations or market caps of less than $1 billion,” he added. The company has $1.8 billion in cash, equivalents and short-term investments. Shares of Electronic Arts fell 2.2% to $20.29 in early afternoon trading.

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries ePlus Inc. EPlus Inc. plans to look for acquisitions. When asked about potential acquisitions plans, Phil Norton, CEO of the firm said, “The pricing on acquisitions still has not equaled the reality yet. We have reviewed several transactions and pricing is still out of whack a little bit. However, in general, transactions where there is revenue less than $100 million and that they are geographically in places where we are not, that they have significant cost savings that we would be able to enact. And also, we are also looking at smaller companies that may have specific capabilities in both engineering and in product sales in areas in the country where we are already established.” He added, “For the most part, the companies we would be looking at are not driven by stock prices since they are not public. And if you look at the state of the finance market when it comes to CIT and GE and the distributors, they are all being very cautious on credit and accounts receivables. And therefore, that is the biggest driver for most of the people that we are looking to acquire, that they would be challenged from a credit standpoint and that their ability to get liquidity or to borrow is limited somewhat.”

EPlus Inc’s SVP said in company’s Earnings Conference Call that “Capturing organic growth opportunities within our customer base and adding new customers by leveraging our existing branch network, telemarketing channel, and e-commerce platform remains a top priority. We continue to review potential acquisition targets which could be a strategic fit. Our strategies include expansion into new geographic markets, tuck-under acquisitions to supplement existing branches, or VARs with specific technology focuses which can be leveraged nationwide. The values which are core to our daily business operations also apply to acquisitions. Our core values are being fiscally conservative, credit oriented, and most importantly, whether investing in a new technology initiative or business opportunity, having a clear path to accretive earnings and a moderate to high return on investment. We have been looking at many acquisition opportunities and will continue to do so until we find a target that meets our objectives.”

Formula Systems Ltd. Formula Systems Ltd. reported on November 18 that third-quarter net income rose 37% on 7.9% lower revenue. Net income reached $3.9 million, or 27 cents a share, from $2.9 million, or 16 cents, in the year-earlier quarter. Revenue slipped to $117.8 million from $127.8 million. Because "the vast majority of Formula's revenues are generated in shekels," revenue fell as the Israeli currency strengthened against the U.S. dollar, Formula said. Chief Executive Guy Bernstein said in a statement that Formula "is positioned well to seize interesting merger-and-acquisition opportunities compatible with our strategy and current portfolio of companies."

Formula Systems (1985) Ltd. announced that it has filed a draft prospectus with the Israeli Securities Authority and the Tel Aviv Stock Exchange relating to a proposed public offering of debentures in Israel. The company plans to use the net proceeds of the offering for general corporate purposes, which may include future acquisitions and financing its operating and investment activity.

Formula Systems (1985) Ltd. recently announced its results for the fourth quarter and year ended December 31, 2008. Revenues for the fourth quarter totaled $153.8 million. Guy Bernstein, CEO of Formula, said, "I am pleased with the fourth quarter and year end results. The company continued to increase its revenues and profits throughout the fourth quarter and 2008 despite the current economic downturn. In 2008 all our subsidiaries reported revenue growth together with positive cash flow and operating profits. We will continue to maintain tight controls over costs and remain focused on long term growth of the Formula Group. With over $150 million in Formula and its subsidiaries, our group is well prepared to navigate this turbulent period in the global environment and to continue to explore new acquisitions, compatible with our strategy and current portfolio companies."

Fortinet Inc. Fortinet Inc. plans to make acquisitions. The firm priced shares in its initial public offering above expectations. The 12.5 million shares priced at $12.50 according to an underwriter, who declined to be identified, and the IPO raised about $156.3 million. Fortinet had expected shares to price between $9 and $11, according to a regulatory filing with the Securities and Exchange Commission. Fortinet will raise more than $50 million, which it has said it will use for working capital, developing new products and potential acquisitions, among other things.

Fortinet Inc., which applied on August 10, 2009 to raise $100 million in an initial public offering, is looking to use the funds for product development and potential acquisitions.

Geodesic Ltd Geodesic Limited is planning to become a mobile virtual network operator (MVNO) in India. "MVNO is an interesting option that we are looking into. We have products in the value added services (VAS) space. With airtime we would complete the stack," Kiran Kulkarni, managing director, Geodesic Ltd, told DNA Money. Geodesic is also seeking to acquire a company in Europe for about $15 million by December.

Geodesic Ltd might look for suitable acquisitions. The firm is seeking Europeans firms in the collaborations space for acquisitions. Kiran Kulkarni, managing director of the firm said that company plans to utilize its $125 million foreign currency convertible bonds to fund the acquisitions.

59| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Google Inc. Google Inc. said that acquisitions are turned on again. Google expects to do one small deal a month instead of hiring new staff. Google Chief Executive Eric Schmidt said, “It's clear that the worst is behind us. What we see at Google is some level of improvement and what is more important is we see it not just in the United States but outside the United States.” The Chief added that the acquisition activity was returning to normal at Google. “Acquisitions are turned on again at Google and we are doing our normal maneuvers, which is small companies. My estimate would be one-a-month acquisitions and these are largely in lieu of hiring. There may be larger acquisitions, but they really are unpredictable,” Schmidt said.

Google Inc. is looking to expand through acquisitions. Eric Schmidt, CEO of Google has said that "the worst is behind us" and that Google has "begun seriously looking at acquisitions again." In an interview with the Nikkei, Eric said Google is looking at acquisitions to expand its cloud computing business. It wants venture-stage firms with potential for growth.

Google Inc plans to acquire small technology companies in order to enhance its technology portfolio. Eric Schmidt, Chief Executive of Google said in an interview with the Fox Business network: “We have been (looking to acquire). We have been wandering around looking at all of the different companies. With the big ones we haven't come across anything we've particularly liked. We are definitely talking to a number of smaller companies but we've done that routinely.”

The Financial Times reported quoting Eric Schmidt, Chief Executive and Chairman of Google Inc that the company has decided not to acquire a newspaper. Eric Schmidt stated that Google had considered buying a news publication but is now unlikely to do so because potential targets are either too expensive or have too many liabilities. He added that a newspaper acquisition is also unlikely because Google is "trying to avoid crossing the line between technology and content." There has been speculation that Google could acquire struggling news organizations.

Google Inc. continues to look at acquisitions. The company said in a SEC filing, “Given the consolidation occurring in the online advertising industry, it is reasonable to expect that Google may in the future spend considerably more to acquire companies in this sector.” GSI Commerce Inc. GSI Commerce Inc. plans to make acquisitions. The firm announced the sale of 10 million shares of its common stock in a secondary public offering. Of the total, 1.8 million shares will come from the King of Prussia Company, and the remaining 8.2 million shares are from current shareholders. GSI said it would use proceeds from the shares it is selling for working capital and possible acquisitions. GSI Commerce Inc. said that the company will continue to look for acquisitions, but ruled out large acquisitions in the near term. Michael Conn, GSI Commerce’s EVP, Finance and CFO, said: “I would add, we do continue to evaluate potential acquisition, but we do not expect any large acquisitions in the near-term.”

Industrial & Financial Systems IFS AB Alastair Sorbie, CEO of Industrial & Financial Systems IFS AB said, “Also we have a number of times referred to our strategy. And that strategy is to grow our business organically, to improve our internal processes and improve efficiency in our business, but also to grow by acquisitions as well as organic growth. And in August this year we acquired MultiPlus Solutions, a Norwegian company, offshore company, which I'll talk about in a few minutes time. But that was also an event which happened in quarter three. Generally speaking, if we look at the year-to-date figures I think that is more indicative of the state of our business.”

Industrial and Financial Systems IFS AB (IFS) held its earnings conference call. The company is looking for acquisition opportunities. Alastair Sorbie, CEO of the company said: “So we're just, the expectation is that we are proceeding in the same basis. We are growing our underlying organic business. And you can see on the rolling 12 that the EBIT margin has gone from 4% to 8% in that time and all the other factors including cash and EBIT are improving. So our organic business is tracking even though the recession is upon us. However, we also are still actively seeking to do acquisitions. We haven't stopped in that process. We are engaged in that activity and therefore that will contribute also to our goals being achieved. But all we're saying with that statement is that we have to be realistic and say that we hadn't factored in at the time we made the prediction that there would be an economic downturn of the scale we've seen in the last 12 months.”

Industrial & Financial Systems IFS AB (IFS) will look at acquisitions for growth. Ian Fleming, Managing Director, IFS, Middle East, Africa & South Asia told Emirates Business, “Our strategy is to double our earnings in a five-year period and embark on an acquisition strategy. The company will embark on an acquisition strategy and look at products that complement our solutions.” He added, “Going forward the agenda would be to be cautious. Therefore, the company would be careful with its cash position. There are good bargains available but we are not a product collector and are not looking at collecting maintenance.”

InfoSpace Inc. William Lansing, the President and CEO of Infospace Inc., said in a conference call, “I’m interested in growing InfoSpace organically as well as through acquisitions. We have a strong balance sheet and cash with which to make acquisitions. We remain focused on businesses with a good growth profile and positive cash flow. We believe we have a smart acquisition strategy that makes sense and reasonably confident that we’ll have some traction with our M&A strategy within the year.”

Will Lansing, President and CEO of InfoSpace Inc. said, “As I said in the past, I'm interested in growing InfoSpace through both organic efforts and through acquisitions. We have a strong balance sheet and cash with which to make acquisitions and the market providers like ourselves continues to improve. Initially, we are targeting small tuck-in acquisitions of businesses that can build our brain trust at the Company, and bring in consumer Internet marketing expertise. Ideally they will enable us to strengthen our search business or our search monetization engine will strengthen them. The common denominator is that we are looking for tuck-ins with great consumer Internet talent that are or will quickly be profitable. We continue to actively seek bigger opportunities that have attractive characteristics, good growth potential, good margins, a fair price, and preferably in but not limited to the consumer Internet space. Our efforts in M&A will be no less careful than the acquisitions and asset dispositions of the past that resulted in unlocking shareholder value.”

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Infotech Enterprises Ltd. Mr. BVR Mohan Reddy, Chairman & Managing Director of Infotech Enterprises Ltd. had an informal interaction with the media on November 25, 2009 on the sidelines of a NASSCOM conference. The Company said that is looking to acquire two companies in the US during the current financial year. The buyouts could be in the range of $10 million - $20 million each; this would be funded from the cash surplus of the Company. The Company is looking to acquire candidates that could complement its domain knowledge and add to its present strengths. The Company's focus was on improving its presence in the US.

Infotech Enterprises Ltd. plans to make acquisition. Chairman and Managing Director of the company, B.V.R. Mohan Reddy stated that Infotech Enterprises Ltd is in talks for acquisitions in the U.S. and Europe. The company is scouting for acquisitions in the price range of $10 million to $20 million in the engineering software services segment. The company has $87 million in cash to fund acquisitions. Infotech's shares rose by 4.3% on the Bombay Stock Exchange.

Infotech Enterprises Ltd. continues to seek acquisitions. Krishna Bodanapu, senior vice-president of the firm said that the firm is planning to close “two good-sized acquisitions” in the aerospace domain in the next six months. He said, “We have decided to significantly build on where we are good at – the aerospace vertical. Accordingly, we have restarted the process of identifying companies. We are realistically looking at two acquisitions with each deal being anywhere between $30 million and $50 million.” Infotech may look for firms with right set of skills and nearness to customers in the US. It may also look at firms that will help increase its competency in terms of delivery in China, Romania, India and Russia in the areas of geographic information systems and engineering within the design space. The company raised $75 million in 2007 through private placement of 15% of its equity stake. These funds may be utilized for acquisitions. Mr. Bodanapu said, “We have also been accruing cash ($10 million in the first quarter of FY09).” He added, “The proposed acquisitions are expected to strengthen our aerospace vertical, which sees an annual sp

Infotech Enterprises Ltd has admitted that a few customers of Satyam Computer Services had approached it. According to Mr B.V.R. Mohan Reddy, Chairman and Managing Director, all these enquiries are related to the services areas where Infotech is strong. Mr. Reddy informed that his company, which had a cash pile of INR 3 billion, was on the lookout for a possible acquisition. "We are looking at an appropriate opportunity that would complement our core strengths," he added.

Innodata Isogen Inc. Innodata Isogen, Inc held its earnings conference call. The company may look at acquisition opportunities. Jack Abuhoff, Chairman and CEO of the company said: “Finally, we see considerable opportunity for strategic acquisitions and are addressing these in a systematic and consistent way.”

Innodata Isogen Inc held its earnings conference call. The company may look at acquisitions opportunities. Jack Abuhoff, Chairman and CEO of the company said: “It's a good question, Perry. And what we're seeing is much the same way that we're seeing now in an environment where we can very attractively hire talent. We're also seeing an environment where much more attractive valuations -- we can look at companies that might make sense as acquisitions. We're continuing to do that. But I'll emphasize we're going to be very selective. We're going to be very careful. Acquisitions will need to pass the test of assertiveness, of strategic fit, culture fit. And only then will we proceed. But we're seeing some -- really a return to attractive valuations, which could present an opportunity for us.”

Internet Brands, Inc. Robert Brisco, CEO of Internet Brands, Inc. said, “We acquired four websites for about $7 million. In general, we expect our acquisition activity will range anywhere between $3 million and $10 million per quarter depending on the opportunities we see. As we have been spending less over the course of the years, the amounts per quarter become more lumpy, but in all cases we only acquire properties that are immediately accretive and significantly so. Acquisition pricing seems to have rationalized over the summer and fall. We continue to acquire efficiently when the targets represent a good fit with our operating platform. Over time, as our organic growth initiative accelerate we expect acquisitions to count for even smaller amounts of our growth, that is we'll have higher relative ratios of organic growth, and spending levels to represent smaller amounts of our free cash flow.”

Internet Brands, Inc. plans to make acquisitions. Bob Brisco, CEO of the firm said, “Turning now to acquisitions. In the second half of 2009 we deliberately slowed our investment rate in response to financial market crises. We have since seen market valuations for targets considerably decline, and we expect them to stay that way. We have done six acquisitions in Q4 and Q1 for a total outlay of less than $4 million. We intent to remain acquisitive, but we will spend less since the average deal size is declining, the result of reduced pricing. We are also now of the view that our investment pace for acquisitions will further moderate in future years. The reason for this is that the early success of our organic growth initiative suggests that we should be able to extend our platform using smaller assets. Exceptions to this might be a few anchor properties as we continue to enter new verticals.”

Intuit Inc. Intuit Inc. said that the company is looking for acquisitions. Neil Williams, CFO of Intuit said, “We expect to generate strong cash flows, in line with our operating income and maintain a strong balance sheet. We continue to evaluate internal and external investments against a risk adjusted return of 15% to 20% over a five-year horizon. Our priorities are to invest cash in internal growth opportunities, infrastructure that enables growth, and strategic acquisitions and partnerships. We also expect to continue to repurchase Intuit securities in the market.”

Intuit Inc. may look for more acquisitions. Brad Smith, President and CEO of the firm said, “We still fundamentally see this company as growing double digits organically, supplemented with acquisitions. I think the reality we're dealing with now, the same reality that most companies are, we're in a pretty tough macro economic environment. So when you don't have the new data for starting up at the normal rate, you see the charge volume down in our payments business, you see banks struggling to stay afloat; 77 have failed in the first part this year alone.”

Intuit Inc intends to invest more than $45 million in India in fiscal 2010 (beginning August), to fuel its expansion and enlarge its product portfolio. Intuit’s President and Chief Executive Officer, Brad Smith confirmed the plans but did not give any details about the nature of funding. "We have about $1 billion on our balance-sheet and we are looking at making acquisitions and entering into strong, local partnerships," Smith said.

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries JDA Software Group Inc. Hamish Brewer, CEO of JDA Software Group Inc. said, “That was, obviously, an important factor for us going that process of looking for a new CFO. And I think we have been pretty public about the fact, that we want to go through acquisitions -- clearly we have got -- we ran into difficulties last year with the overall global credit market. But I think that as that market stabilizes, we've said this many times, I think publicly, we are actively going to be looking for opportunities to pick up new companies and drive our business forward.”

JDA Software Group Inc plans to make acquisitions. The firm said, “We Will Continue to Actively Look for Strategic Acquisition Opportunities in 2009. We are disappointed that our proposed acquisition of i2 Technologies was terminated in December 2008. We believe this termination was necessary due to the adverse effect of the continuing credit crisis. The ultimate credit terms available in the underwritten credit facilities would have resulted in unacceptable risks and costs to the combined company. We continue to believe that acquisitions are an integral part of our overall growth plan and that the current environment is likely to create other acquisition opportunities at reasonable prices. As a result, we are actively looking for strategic acquisition opportunities in 2009 that can deliver the kind of results that we achieved in the acquisition of Manugistics Group, Inc., and drive significant accretion for the Company even in these tough economic times. However, without improvement in the availability and terms of credit for acquisitions, we may not be able to successfully pursue and complete significant acquisition opportunities.”

K3 Business Technology Group plc K3 Business Technology Group plc, which has raised £1.5 million, is looking to use the funds for acquisitions. The company said: “The stock had also been placed with new and existing institutional investors and the proceeds would be used for complementary acquisitions and for working capital purposes.”

K3 Business Technology Group plc said in a filing with London Stock Exchange (LSE), “Given K3's dominant presence in its core markets, the Directors view the Group's long term growth prospects very positively and, in addition, are continuing to seek complementary acquisitions in line with strategy.” K3 Business Technology Group plc may continue to consider complementary acquisition opportunities. The firm reported full-year 2008 profit before taxation of £3.94 million, compared to £.67 million in the prior year. Adjusted profit before tax rose by 25% to £5.92 million from £4.72 million in the last year.

Kingdee International Software Group Co. Kingdee International Software Group Co. Ltd. seeks to grow. Xu Shaochun, chairman for the company said, “Kingdee plans to Ltd. acquire two or three companies this year to consolidate its leadership in the management software industry.” He noted that the lingering financial crisis provides rare mergers and acquisitions (M&A) opportunities for outstanding companies. The company will be cautious when merging or acquiring companies abroad, taking M&A costs, management expenses, and other factors into consideration, Mr. Xu said. He added that Kingdee plans to spin off several of its outperforming operations and get them listed on the stock market in the future. However, the company has not worked out a timetable for the listing.

Kingdee International Software Group Co. Ltd. said that it plans to spin off Kingdee Middleware Co and issue an initial public offering of the firm on the forthcoming domestic Growth Enterprise Market. Kingdee Middleware will use the money the IPO raises to expand distribution channels and for mergers and acquisitions, said Feng Jicheng, general manager of Kingdee Middleware.

Lawson Software, Inc. Lawson Software, Inc. said that the company is evaluating strategic acquisition opportunities. Harry Debes, President, CEO and Director, Lawson Software said, “We are also evaluating strategic acquisition opportunities. Now, I know that as soon as a CEO says this, or any company says this, people immediately get concerned, because we know the history of M&A hasn't always been rosy. But I think we've hopefully earned some credibility at Lawson in our ability to, first of all, to integrate a very complicated and somewhat messy integration between two quite different organizations. It took a little while, but we ultimately got there and have delivered good value.”

Lawson Software, Inc. said in Form 10-K filed with Securities and Exchange Commission (SEC), “As of May 31, 2009, we had $414.8 million in cash, cash equivalents and $214 million in working capital. Our most significant source of operating cash flows is derived from license fees, maintenance and consulting fees related to services provided to our customers.” It added, “We believe that cash flows from operations, together with our cash and cash equivalents, will be sufficient to meet our cash requirements for working capital, capital expenditures, restructuring activities, investments and share repurchases for the foreseeable future. As part of our business strategy, we may use cash to acquire companies or products from time-to-time to enhance our product lines, which could have a material effect on our capital resources.”

Lawson Software, Inc. said that the company will make use of its cash for acquisitions in order to take advantage of the falling asset prices. “This is an environment that might present some very interesting opportunities for us to make some strategic acquisitions,” said, Lawson Chief Financial Officer, Robert Schriesheim. “While we have nothing imminent, we’re willing to be patient and we’ve got the balance sheet that enables us to take advantage of this economy,” he added. Lawson Software is looking for companies that serve a similar niche, like health care providers. “For acquisitions of companies with revenue of $25 million to $75 million, Lawson is likely to use its cash,” Schriesheim said. The company had $308.2 million in cash and equivalents at the end of the third quarter in February. The company expects to generate another $100 million in cash flow during the fourth quarter.

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Longtop Financial Technologies Limited Longtop Financial Technologies Limited announced that it intends to offer, subject to market and other conditions, 3,700,000 American depositary shares (ADSs), representing 3,700,000 ordinary shares of the Company. Longtop intends to grant the underwriters an option to purchase up to an additional 555,000 ADSs. Deutsche Bank Securities Inc. and Morgan Stanley & Co. International plc will act as joint bookrunners for the offering. Longtop plans to use the net proceeds of the offering for potential acquisitions and for general corporate purposes. The Company’s management will retain broad discretion over the use of proceeds, and the Company may ultimately use the net proceeds for different purposes.

Longtop Financial Technologies Limited continues to seek acquisitions. The firm announced unaudited financial results for the quarter ended June 30, 2009, which is the first quarter of its fiscal year ending March 31, 2010. Adjusted Net Income for the quarter ended June 30, 2009 of $10.7 million or $0.20 per fully diluted share, represented an increase of 36.6% year on year as compared to Adjusted Net Income of $7.8 million in the corresponding year ago period and exceeded Company guidance of $10 million. Unrestricted cash balances at June 30, 2009, were $215.1 million, giving the Company significant resources for potential acquisitions in the still fragmented financial IT services sector in China.

Longtop Financial Technologies Limited reported un-audited financial results for the fiscal fourth quarter and fiscal year ended March 31, 2009. The company intends to look for acquisition opportunities. Derek Palaschuk, CFO of Longtop said: "Our strong results underscore the sales momentum, recurring revenue structure and operating leverage of our Company's business model, as well as our solid execution. Looking ahead, the attractive market opportunity calls for continuing our strategy of investing back into the business and grasping consolidation opportunities through acquisitions that will help make Longtop the leading IT service provider in China's financial services industry."

Longtop Financial Technologies Limited said that the company will use its $236 million in cash to look for acquisitions. Weizhou Lian, CEO of Longtop Financial Technologies, said: “Our Insurance segment will continue to grow at a healthy rate because insurance companies IT development lags a number of years behind banks and they must continue to spend to manage their business effectively. I also see opportunity for acquisitions in the insurance space to supplement our customer base. While most of our growth will continue to be organic in 2010, we will selectively use our $236 million in cash to look for quality acquisition candidates.”

LoopNet, Inc. LoopNet, Inc. said that the company has not set its eyes on any specific acquisition target, but is looking for acquisitions. Rich Boyle, Chairman and CEO of LoopNet, said: “ We don't have specific M&A targets that we're willing to talk about at this point, but one would be looking at acquisitions that we think expand the range of services we provide to our customers or expand the scale of our marketplace. We have been active acquirers in the past and are certainly actively evaluating a number of things right now. And so something that we're very focused on and hope to be successful in, but we are -- part of what is -- the timing issues have to do with we're a very disciplined bunch in terms of how we go about that. And then in addition to that, we have on an ongoing basis been making investments in the business on an organic sense. There's a number of things going on that -- this year in terms of aggregating more for lease spaces would be an example of areas where we're building not just tools, but investing in business processes and executing up the scale of that to try to grow the overall marketplace. And so we'll continue to drive in some of those or

LoopNet, Inc. plans to make acquisitions. Rich Boyle, Chairman & CEO of the firm said, “In addition, we're continuing to look at what we think are some interesting acquisition opportunities.”

Manhattan Associates, Inc. Pete Sinisgalli, CEO of Manhattan Associates, Inc. said, “We would like to be more acquisitive, but as we've said on a couple of these calls, we're fairly disciplined about our strategy and the role acquisitions play in our strategy. We believe the world is looking for a solution provider to provide a complete suite of supply chain solutions on a common supply chain process platform, and there's real value to be gained by customers from that, so we would look primarily for acquisitions to be complementary to our footprint. We are not excluding anything, so we'll certainly evaluate opportunities to improve shareholder value, but as a general strategic direction, we would be looking for those things that are complementary to our product and technology direction. We continue to invest in meaningful time and energy evaluating different possibilities, but as you pointed out, we haven't done anything of any size recently. We would like to change that, but we'll continue to be disciplined about our approach to M&A.”

Manhattan Associates, Inc. recently held its earnings conference call. . When asked about acquisitions, Pete Sinisgalli, Manhattan Associates’ President and CEO said, “We would be very open to finding a complementary product category or vertical market expertise that would allow us to further differentiate our solutions from the market space. We're constantly kicking around different potential opportunities, and as most of you probably know in this economic environment, there are probably more distressed properties that are on the market than under normal conditions. So we're trying to be aggressive looking at what's available. And we'll be aggressive if there is something that makes good sense for us. So we are looking at those opportunities.” With regard to buying a smaller services company, he said, “While there are a few specific supply chain services companies, there aren't that many that would be a very good match to our specific focus. But we're open to any and all opportunities to increase the value of our franchise and increase the value of the services and solutions we bring to our customers.”

Manhattan Associates, Inc. plans to make acquisitions. Pete Sinisgalli, CEO of the firm said, “I think that over the balance of 2009 there will be more opportunities for acquisitions at a more favorable price. And we do have a very strong balance sheet, so we will continue to be quite aggressive and opportunistic for those that match up to our strategy.”

MICROS Systems, Inc. MICROS Systems, Inc. said that the company will continue to consider acquisitions. Tom Giannopoulos, President and CEO, Micros System, said: “We're always looking at acquisitions, valuations are favorable, I would say at this particular time, so we'll see what we can do.”

Tom Giannopoulos, CEO of MICROS Systems, Inc. said, “And, as far as acquisitions, the same words apply. We're always looking. We always have a list. We have some potential buys. We're not going to do anything stupid, and acquire somebody that will destroy our business model. So, yes, if the -- let's say the optimism that everybody feels today, depending on what news you read, continues, then we'll resume the stock buyback program. And then we'll see what happens with acquisitions. But we're going -- honestly, we're not going to sit on our cash and just sit there for a long time. We'll do something.”

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Microsoft Corporation The CFO of Microsoft Inc., Chris Liddell, said that the company is weathering the global financial crisis by cutting costs but at the same time spending more on research and development. He said at a conference that Microsoft remains one of the world's most profitable businesses, as it reported a net profit of $20.4 billion for the year to June from revenue of $58.4 billion. Microsoft is in the enviable position of having gone into the financial crisis with a very healthy balance sheet of about $30 billion in the bank. "[Since the financial crisis] we have focused enormously on cash because we think it's not only important from a liquidity point of view, but there are going to be a lot of acquisition opportunities ... in the next five or ten years, which are going to be phenomenal in terms of driving growth for us as a company," Liddell said.

Microsoft Corporation announced that it plans to issue up to $3.75 billion in debt in the first public bond offering. The company intends to use the net proceeds of the offering to fund acquisitions. The company stated: "The net proceeds from the sale of the notes will be used for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of our capital stock, and acquisitions."

NIIT Technologies Ltd. Arvind Thakur, Chief Executive of NIIT Technologies Ltd. stated that it is looking at acquisitions in order to add new technologies to its existing line of operations. He said: "Size is not important; our balance sheet can leverage whatever is required (for acquisitions). Fit is most important; it must fit well and strengthens our position that we are currently focusing on."

NIIT Technologies Ltd. plans to make acquisitions. Arvind Thakur, CEO of the firm said, “We are looking at acquisitions all the time. The last acquisition we had made was in January 2008 but we are in talks all the time.”

Novell Inc. Novell Inc. recently held its earnings conference call. The company officials talked about the company’s business and future plans. When asked about acquisitions, Ron Hovsepian, President and CEO of the firm said, “I think our intentions actually just remain the same in terms of what we have shared with you in the past and the criteria by which we are looking through those pieces has not changed in terms of strategic fit, financial fit and operational fit. Those three dimensions haven’t changed or the categories. So we still remain focused on those things that would fit in there that would help continue to drive and accelerate the company.”

Novell Inc. said that the company continues to look for acquisition opportunities. The company is looking to fill its product line through acquisitions. Ron Hovsepian, CEO of Novell, said: “The Company will look at acquisitions in the areas of open source software as well as software for data centers and identity management.” “The company's cash, cash equivalents and short-term investments were $1.1 billion as of October 31, 2008 and Novell plans to deploy some of that capital to acquire companies,” Hovsepian added. Omniture Inc. Josh James, CEO of Omniture Inc. said that the firm might be making several acquisitions of other companies or products because prices have fallen to acceptable levels. He added, “I think over the next few quarters there are several deals we have in the pipeline.” Michael Herring, chief financial officer of the firm said, “We continue to grow our market share overall.”

Omniture Inc. said that the company has a strong balance sheet for additional acquisitions. Josh James, CEO and Cofounder of Omniture, said: “In closing, 2008 was another incredible year of growth and progress for Omniture and our customers. We believe we've been successful in transforming from a web analytics company to an optimization company with solid proof points to that affect as I mentioned earlier. We have a strong balance sheet with access to capital for additional growth acquisitions.”

Oracle Corp. Oracle Corp. said on October 15 that it may look into making another computer-hardware acquisition. Such an acquisition is “not beyond the realm of possibility,” President Charles Phillips said at a meeting of analysts in San Francisco. Chief Executive Officer Larry Ellison, who spoke at the same meeting, ruled out the possibility of acquiring a consulting-services firm. “We are a manufacturer and a developer of technology, and that’s what we want to be,” Ellison said. “I think we might make more acquisitions after Sun.”

Oracle Corp. announced the pricing of its sale of $1.5 billion of 3.750% Notes due 2014, $1.75 billion of 5.000% Notes due 2019 and $1.25 billion of 6.125% Notes due 2039. The offering is expected to settle on July 8, 2009. Oracle intends to use the net proceeds from the offering for general corporate purposes and future acquisitions, including the proposed acquisition of Sun Microsystems, Inc. and acquisition-related expenses.

Oracle Corp. seeks to grow. Oracle’s president, Safra Catz, who is in Israel, spoke at the annual Oracle Day, discussing recent and future acquisitions. It was reported that Oracle has decided to go on an aggressive acquisition spree. Catz said she will be happy if Oracle buys more in Israel, adding, "We are actually looking at something in Israel right now."

Parametric Technology Corporation Parametric Technology Corp held its earnings conference call. The company may look at acquisition opportunities. Jim Heppelmann, President and COO of the company said: “We have a strategy to grow organically. We have the means to grow organically. We may make acquisitions, particularly the technology tuck-ins we've been doing, which fundamentally show up down the road as organic growth. But we don't have a predetermined goal to acquire half of that growth or something like that. I would say our pre-determined goal, if there is one, is to acquire none of it, to grow it all organically. We'll keep that acquisition option open when we find a special piece of technology, or if some situation presents itself that's too good to pass up for one reason or another.”

Parametric Technology Corp. was recently present at Goldman Sachs Technology and Internet Conference. The company officials talked about the company’s business and future plans. When asked about acquisitions, Steve Horan, Parametric Technology’s Corporate VP and CIO said, “We're going to buy back around $50 million of stock this fiscal year. And then we'll continue to look at acquisitions; largely small tuck-in technologies. And that's largely because kind of the disconnect today that continues to exist in terms of valuations and expectations of higher end customers.”

64| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Perficient Inc. Jack McDonald, the Chairman & Chief Executive Officer of Perficient Inc., said in a conference call, “We continue to be confident in our capacity to manage to any kind of an economic situation. We do have a flexible cost structure, low CapEx requirements and again are positioned on with good operating leverage as we start to see an up tick. We are again beginning to look more closely at acquisitions, and we are rebuilding that pipeline of deals with focus on early 2010, again we’ll see what happen. We are going to play it by years and we go through here, but our target would be to really start looking at executing acquisitions again early next year, if we continue to see signs of recovering in the market and our currency is in a position to fund accretive deals.”

Mr. John McDonald, President and CEO of Perficient Inc. said that the company plans to continue M&A for growth after stock prices recover.

Polaris Software Lab Ltd. Polaris Software Lab Ltd. plans to make acquisitions. When asked, “Your Company has INR 4 billion in cash. What do you plan to do with it?,” Arun Jain, Chairman & CEO of the firm said, “We are looking for acquisitions but are yet to find the right fit. A lot of time goes in evaluating these targets. This year, we are targeting two acquisitions, either for account expansion or to enter a new geography.”

Polaris Software Lab Ltd. continues to look for acquisitions. Mr. Arun Jain, Chairman and Chief and Executive Officer of the firm said, “It would be difficult to comment precisely on the size of acquisition and timeline. We have a team working on strategic deals and examining potential targets.” He said, “By both means, the acquisitions will be in line with our focus in financial technology space and must bring in IP (intellectual properties) that fits or complements our product portfolio.”

Polaris Software Lab Ltd. has announced its fourth quarter results. The Polaris management said in an interview with CNBC-TV18 that the company expects to sustain an earning per share (EPS) of INR 15 and a marginal revenue growth in FY10. The management further said that the firm is looking at strategic acquisitions to tap new geographies and plans to invest INR 3.4 billion for acquisitions. The company has good pipeline of about $100 million in solution deals.

Polaris Software Lab Ltd. seeks to grow with the help of acquisitions. Polaris Software Lab's Q3 FY09 net profit stood at INR 0.37 billion. With regard to firm’s cash, Arup Gupta, President and COO of the firm said, “The cash on the book has improved substantially simply because given the current market conditions we focused on invoicing in time and collecting in time. As a result of which, our collections have seen substantial improvement and that is what is reflecting in the cash in the books. This quarter we have acquired SEEC, the insurance company with SOA (service-oriented architectures) components and we will continue to look at further acquisitions as we go forward wherever it makes sense, wherever there are synergies, possibly adding it to the IP area. So, we are continuing to look at acquisitions as we go forward.”

Progress Software Corp. Progress Software Corp. said that the company will continue to look for acquisitions. Bud Robertson, Senior Vice President of Finance and Administration and CFO of Progress Software said, “We’ve talked at the Board level and at this particular time the Board has stated the cash is for growing the business and I’m sure dividends always come up and I’m sure it will come up. Right now again to grow the business and look for acquisitions.”

The CEO of Progress Software Corp., Rick Reidy said that the company is pallning plans to strengthen sales from Asia to 10% of revenue by 2012 as it expands in developing countries. The company is planning to invest in the region and may make acquisitions to increase sales.

The CFO and SVP of Progress Software Corp., Bud Robertson said in a conference call, “We're projecting cash flow for the year to be in the range of probably $80 million to $100 million, which is where we're expecting it to be. Cash flow will be -- the cash generation will be used for both acquisition opportunities, as well as for share buybacks. Right now we are building -- as you know we are building some cash up and we expect to, as we go forward, use that cash as we always have. Number one priority has always been technology and products that allow us to continue to grow the business and then we also, obviously, use it for our stock buybacks and that's consistently what we've done and that's what we plan on doing.”

Quest Software Inc. Quest Software Inc. said that the company will continue to look for smaller acquisitions. Vinny Smith, Executive Chairman of Quest Software, said: “And so we balanced and reviewed those three options, and for us we anticipate continuing to do smaller acquisitions. We do look at time to time at larger acquisitions that cost hundreds of millions of dollars. We haven't done any to date, but we know that we're going to do smaller deals, and we need to keep enough powder dry and cash to be able to do those stock. So far us, we know we can draw down our cash, and still continue with our acquisition strategy that we have used in past years.”

Quest Software Inc. plans to look at acquisition opportunities in India. The firm is believed to be looking at taking its Indian operations into the next level of growth through the inorganic route. Krishnan Thyagarajan, MD of the firm said that Quest plans to buy a product company in the target range of $50 million - $200 million. He added, “We are looking at acquiring at a company with some good IPs and specializing in either traditional systems development and services or the virtualization realm where we want to ramp up faster.”

RCG Holdings Limited. RCG Holdings Limited reported that revenues in the first six months of the year rose 31.4% to HKD 1,293.7 million. ‘China is the key driving force in economic growth,’ deputy chief executive officer Dato’ Lee Boon Han told Sharecast. The group will continue to seek to grow both organically and by acquisitions. Chief financial officer, KC Chong told Sharecast that when considering acquisitions; it was more a case of finding companies that offered collaborative opportunities. ‘If a company has a licence for a product in a particular country where we want to expand, and the product fits our area of expertise, we will look at it,’ Chong noted.

RCG Holdings Limited said on March 12 that it is considering potential merger and acquisition targets to better endow itself to penetrate certain markets. The CFO of RCG Holdings, KC Chong told Dow Jones Newswires: "We're looking at potential M&A targets that will give us the advantage of being able to penetrate certain markets." He said this could imply companies with technology that compliment existing products of RCG. He did not reveal the markets the company is interested in, but he did say that RCG was presently focusing on its anti-counterfeit systems. He said: "I think there's a huge potential there, particularly in the financial and logistics sectors."

65| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Reckon Ltd. Reckon Ltd. plans to make acquisitions. The firm announced that a leading Tier-1 operator from the Asia Pacific (APAC) region has selected Redknee's InBill solution to manage its wholesale billing with its Mobile Virtual Network Operator (MVNO) partners through Redknee's service bureau operations. Lucas Skoczkowski, Redknee's CEO said, “This new contract further advances Redknee's strategy of growing our business both organically and through acquisition, as we focus on expanding our global customer footprint and increasing recurring revenue.”

Reckon Ltd. said that the company will focus on consolidation and organic growth in 2009 and will consider relevant acquisition opportunities. The company said: “Whilst primarily focusing on consolidation and organic growth in 2009 the Company will continue to consider relevant and appropriate acquisitions which are earnings accretive and maximize shareholder value.”

Salesforce.com Salesforce.com plans to make acquisitions. The firm announced its intention to offer $500 million aggregate principal amount of convertible senior notes due 2015 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Act). Salesforce.com also expects to grant the initial purchasers of the notes an option to purchase up to an additional $75 million aggregate principal amount of the notes to cover overallotments. Salesforce.com expects to use a portion of the net proceeds for the cost of the convertible note hedge transactions after such cost is offset by the proceeds of the warrant transactions described above, and to use the remaining proceeds for general corporate purposes, including funding possible investments in, or acquisitions of, complementary businesses, joint ventures, services or technologies, working capital and capital expenditures.

Salesforce.com said that the company is always looking at acquisitions. Parker Harris, the co-founder of Salesforce.com, said, “I'm not sure I agree with the last comments, but we're always looking at acquisitions. If you look historically, most of our acquisitions have been technology acquisitions that were a small-scale. Even InStranet that we just did was small-scale in relation to the size of the Company. We will continue to look for acquisitions of all sizes. Some might be accretive. The challenge for me is what does that mean to the technology.”

Marc Benioff, Chief Executive of Salesforce.com said that the firm is seeking acquisition opportunities. He added that Salesforce wants to acquire firms that can boost its own portfolio of products on customer service, sales automation, and on technology that will allow businesses to craft their own Web-based software. Mr. Benioff said that he is always looking to make acquisitions. He stressed that he was not restricting his search to companies of any particular value. He added that his company has about $1 billion in cash reserves. He noted, “The size of the deal is not as important as the quality of the technology and the team.”

Marc Benioff, the founder and CEO of SalesForce.com Inc., said in a conference call, “This is an environment where acquisitions are very exciting but companies that are fully compatible with our strategy, as I'm sure you know, are not that easy to identify. So we are constantly looking for more acquisitions, of course, and we are very fortunate to find a good one with InStranet, we had a great one with Corral, which was content management. We had the one where did our Google ad words integration. You know, we found a lot of really cool companies, but they are hard to find and, for us, we delivered in the year more than 210 million additional cash, and I think that as we look at that, we'd love to find strategic places for that eventually, and that should be in growing the revenue and becoming more competitive through technology.”

SAP AG Boersen-Zeitung reported, citing Leo Apotheker, CEO of SAP AG that the firm aims to expand through organic growth and will only target “smaller” acquisitions that add complementary technologies. The firm’s shares increased 2.5% to €31.65.

SAP AG is looking for acquisition opportunities; however the company is not interested in hardware. Chief Executive of the company, Leo Apotheker said: "We are not in the hardware business. I do not see why you want to be in the hardware business." The company had said in June that it would continue to make acquisitions and could spend €5 billion on deals. He said: "Until June we bought a few companies, not that many... In the first-half 2009 we bought probably less companies than in the first-half 2007, now it's not because there are not interesting targets. We keep looking." He added: "We will always be a fair buyer and a fiscally responsible buyer."

Le Figaro reported citing SAP AG’s Chief Executive Officer, Leo Apotheker as saying that the company could spend up to €5 billion ($7 billion) for acquisitions. “We have €2.5 billion at our disposal and could raise a similar amount,” he said. “We have built a model of mixed growth. SAP will continue to have organic and non-organic growth,” he added. He noted that the company will not follow Oracle Corp’s path which acquired Sun Microsystems Inc. “I don’t think that a software writer becomes more competitive by dealing in hardware,” Apotheker said. “Instead it becomes a conglomerate,” he noted.

Shanda Interactive Entertainment Ltd. Shanda Interactive Entertainment Ltd. plans to acquire more digital entertainment platforms and game content developers to diversify its revenue stream. Shanda spun off Shanda Games in September. Grace Wu, Shanda's chief financial officer told investors in a conference call that Shanda is keen to use its $1.6 billion cash pile on more acquisitions. He added, “We will consider acquiring more game content developers and other digital entertainment content players.”

It was reported that Shanda Interactive Entertainment Ltd. plans to raise as much as $800 million in a U.S. IPO for its games unit. Chen Tianqiao, Shanda’s founder said in the past that he would like to ultimately transform his company into a diversified media firm. The firm said that it will use the IPO proceeds to fund acquisitions and joint ventures, as well as for capital expenditure.

Sina Corp. Sina Corp. announced that the subscription for ordinary shares by New-Wave Investment Holding Company Limited, pursuant to the agreement entered into between Sina and New-Wave in September 2009, has been completed. The company has received gross proceeds of $180 million, which it plans to use for future acquisitions and general corporate purposes.

Sina Corp said that a group led by its management team would buy around 10% of the company for $180 million. The company said the funds could be used for future acquisitions and corporate purposes.

66| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Software AG Software AG plans to make “larger” acquisitions every two to four years. Chief Executive Officer of the company, Karl-Heinz Streibich said: “We want to become bigger. We could be stronger in the U.K., in Scandinavia, in France, Italy, and eastern Europe, in the Middle East and in Asia.” The company intends to acquire companies similar in size to its acquisitions of IDS Scheer and WebMethods. IDS Scheer was acquired for €477 million and WebMethods was acquired for $456 million. Karl-Heinz Streibich said the company does not plan acquisitions in the short term in 2010 unless there is a “super opportunity”.

Software AG said that its net income rose 23% in the third quarter of 2009. The firm said that its net income for the July-September period rose to €38 million from €31 million in the third quarter of 2008. Arnd Zinnhardt, Chief Financial Officer of the firm said that nearly €40 million in revenue in the third quarter came from IDS Scheer. He added that the firm would work to integrate Scheer over the next year and would consider making future acquisitions in 2011 or 2012, but did not talk specifically about what sort of deals it was considering. He said, “We want to do the current integration right; we want to see how the combined Scheer and Software AG products do together.”

Karl-Heinz Streibich, Chief Executive Officer of Software AG said that he plans to expand the firm into Eastern Europe and Asia with the help of purchases. He added that the firm will resume takeovers once it has absorbed IDS Scheer AG. He noted that the future acquisitions may be similar in size to IDS Scheer or WebMethods Inc. He added, “Size plays an important role in the software business to reach profitability and visibility in the market. Once we have paid back our loans for IDS Scheer in two to three years, we are free again for new loans and more acquisitions.” He also said, “Consolidation always takes place, and it is important that smaller companies don’t remain small but grow.” Software AG reported net income of €28.9 million for the second quarter. Sales rose by 5% to €176.4 million.

Software AG, which reported a 6% rise in its earning before income and tax to €38.1 million, said that the company will consider acquisitions this year. Chief Executive of Software AG, Karl-Heinz Streibich, said: “It is possible that the company would make some this year.” “We're always in talks.” The company did not identify any particular acquisition targets, but said that it can spend up-to €300 million to €400 million on takeovers.

SolarWinds, Inc. Solarwinds Inc held its earnings conference call. The company plans to look at acquisition opportunities. Mike Bennett, Chairman and CEO of the company said: “We are looking at not only deepening our capabilities in network management, but at addressing areas of infrastructure management that are quickly becoming relevant to our target customer base. With that in mind, we are actively investigating new areas to target for organic development or acquisition opportunities. Now, let me turn it over to Kevin to walk through the quarterly results in detail, as well as our outlook for the remainder of 2009.” Kevin Thompson, President, COO and CFO of the company said: “In order to both respond to the demand of our existing customers, as well as to take advantage of the opportunity to take share in the mid-market and the enterprise, we will continue to expand the breadth of the Orion product family. We expect that this future expansion will likely come from a combination of organic development and acquisitions.”

SolarWinds Inc. has set the price range of $9.50 to $11.50 a share for its initial public offering. In a registration statement filed with federal securities regulators in March 2008, SolarWinds said it planned for a $250 million IPO, saying it would use part of the proceeds to pay off $102.5 million in long-term debt and $20 million to fulfill obligations to its original shareholders. The rest would go toward general corporate purposes and possible acquisitions, the filing said.

Solera Holdings Inc. Solera Holdings Inc. said that the company is looking for acquisitions. Kamal Hamid, Director of IR, Solera Holdings, said: “Now, let me tell you about a few of our key priorities for fiscal year 2010. One, consummating strategic acquisitions that are active in our pipeline; two, continuing to increase the breadth and value of our core software offerings, allowing us to continue grow of revenue per claim; three, continuing to invest in targeted geographic expansion for our futures growth. On priorities one and two, we view acquisition in product development in parallel as we evaluate the IRR of buy versus build. Our acquisition and new product development strategies are very focused on increasing the size and value of our core offerings, while delivering immediate ROI to our clients.”

Tony Aquila, Founder, Chairman and CEO of Solera Holdings Inc. said, “On the acquisition front, I want to update you on where we are with the second large deal mentioned in our November prospectus. Despite working this transaction for many months, we elected to discontinue our efforts during the quarter due to an inability to bridge a valuation gap with the target. We remain very focused on certain product and service extensions to our core offering, but we will remain very disciplined in evaluating each acquisition opportunity.” It added, “On the expense side, we continue to identify opportunities to further reduce waste. An example of these is the planned consolidation of two of our European data centers. We may be able to capture several million dollars in synergies through this effort.”

SS&C Technologies Inc. SS&C Technologies Inc. said that the company has increased its cash position this year in order to consider acquisitions. Patrick Pedonti, SVP and CFO of SS&C Technologies said, “We increased our cash position this year to give us the ability to take advantage of further potential acquisitions. We're also seeing a lot of acquisition opportunities. So these candidates are across the spectrum of our business units and we probably are still looking at 10 to 15 potential acquisitions a quarter.”

SS&C Technologies Inc. plans to make acquisitions. The firm announced results for the quarter ended June 30, 2009. Revenue on a GAAP basis for the second quarter of 2009 was $67.3 million. This represents a decrease of $4.9 million, or 6.8%, from revenues over the same period in 2008, with $3 million of the decline resulting from the negative impact of foreign exchange and acquisitions contributing $4.1 million. Net income, on a GAAP basis, for the second quarter of 2009, was $3.5 million. Bill Stone, Chairman and CEO of SS&C Technologies said, “We will continue to use cash to acquire new businesses, and pay down debt and deleverage our business. Our consolidated total leverage, as defined in our senior credit facilities, is now 3.3 times consolidated EBITDA compared to 6.8 times when we went private.”

SS&C Technologies, Inc announced results for the quarter ended March 31, 2009. The company plans to acquire new businesses. Bill Stone, Chairman and CEO of SS&C said: "Our consolidated total leverage, as defined in our senior credit facilities, is now 3.3 times consolidated EBITDA compared to 6.8 times when we went private. We plan to use cash to acquire new businesses and we are seeing many opportunities to buy great businesses at prices unseen over the past few years. We are very diligent and conservative in evaluating new opportunities and we believe this strategy has delivered excellent financial results, during good times and bad."

67| 2009 ANNUAL SOFTWARE INDUSTRY EQUITY REPORT www.softwareequity.com

APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries SXC Health Solutions, Corp. SXC Health Solutions, Corp. announced on September 17, 2009 the pricing of its previous public offering of common shares. SXC will sell 4,500,000 common shares at a price to the public of $41.50 per share. The offering was increased from the previously announced offering size of 3,500,000 common shares. In connection with the offering, SXC has granted the underwriters a 30-day option to purchase up to an additional 675,000 of its common shares at the public offering price to cover over-allotments, if any. The offering is expected to close on September 23, 2009, subject to customary closing conditions. SXC expects to receive net proceeds from the offering of approximately $176.6 million (or approximately $203.3 million if the underwriters exercise their over-allotment option in full), after deducting the underwriting discounts and commissions and estimated offering expenses. SXC intends to use the net proceeds from the offering for general corporate purposes, which may include financing potential acquisitions and strategic transactions, funding capital expenditures and providing working capital to enhance capital and maintain financial flexibility.

SXC Health Solutions, Corp. said that the company is well placed for future acquisitions. Mark Thierer, President and CEO of SXC Health, said: “Looking briefly at some operational highlights; our PBM ops team has done a truly exceptional job, the integration of NMHC. With the closing of the final two sites in the month of July, we have successfully now brought the NMHC integration effort to a close. We delivered on our promises and in fact significantly exceeded our original synergy commitments finishing the integration two full quarters ahead of schedules. The professionalism speed and effectiveness, which our team carried out the integration, were key factors in our ability to generate our recent strong financial performance and I want to publicly thank our operations and IT teams for a job very well done. I believe our successful integration experience here positions us well for future acquisitions.”

SXC Health Solutions, Corp. said that the company will be disciplined in its approach towards acquisitions and would consider an acquisition if it fits well with the company. Mark A. Thierer, President and Chief Executive Officer of SXC, said: “But we are very active, candidly with an acquisition map that we have laid out and it includes today tuck-in targets in specialty pharmacy, regional PBMs, Medicaid tools that would add to our fee-for-service Medicaid model. And so what we’re seeing is actually a unique opportunity from a valuation standpoint. So I think our track record here on digesting acquisitions is good and from an acquisition standpoint, we will be disciplined but we will act if the valuation is right and it fits into the product line.”

Symantec Corporation Greg Hughes the Group President of Enterprise Product Group at Symantec Corporation, said in a conference call, when asked about acquisitions, “Well, in security, there's continued opportunity to fill out the portfolio there. That's been an area where Enrique's talked about priority for our acquisitions, going forward, doing technology tuck-ins around that. In next generation information management, what we're doing in the offline data management space, software as a service and that form factor. So, those are the three areas where we are looking at acquisitions internally.”

Symantec Corporation plans to make acquisitions. Enrique Salem, CEO of the firm said that the firm will utilize acquisitions to add products in security, services delivered over the Internet, systems management and virtualization. He noted that the firm has recently acquired Swap Drive and Message Labs. These are examples of how he is using acquisitions to add such products. He added, “Private company expectations on valuation are still too high. We can afford to be patient.”

TechTarget, Inc. TechTarget, Inc. said in Form 10-K filed with Securities and Exchange Commission (SEC), “We raised a total of $91.9 million in gross proceeds from the offering, or $83.2 million in net proceeds after deducting underwriting discounts and commissions of $6.4 million and other offering costs of approximately $2.3 million.” It added, “We believe that our existing cash and cash equivalents, our cash flow from operating activities and available bank borrowings will be sufficient to meet our anticipated cash needs for at least the next twelve months. Our future working capital requirements will depend on many factors, including the operations of our existing business, our potential strategic expansion internationally, future acquisitions we might undertake, and the expansion into complementary businesses. To the extent that our cash and cash equivalents and cash flow from operating activities are insufficient to fund our future activities, we may need to raise additional funds through bank credit arrangements or public or private equity or debt financings. We also may need to raise additional funds in the event we determine in the future to effect one or more additional a

TechTarget, Inc. said that the company is delaying its release of fourth quarter and 2008 financial results in order to finalize its review of the period over which it has historically recognized revenue from its webcast offerings. Estimated revenues for the fourth quarter of 2008 are $25.1 million. The company is however looking for acquisitions. Greg Strakosch, Chairman and CEO of TechTarget, said: “Continue to take advantage of our balance sheet and our strengthening competitive position that will make us more attractive to companies looking to be acquired.” “Despite the challenging economic conditions, we are adjusted EBITDA- positive, have a very strong balance sheet and are very well-positioned for the future. We plan to continue to invest aggressively during the downturn to take advantage of the shift of advertising dollars to online marketing that demonstrates ROI,” he added.

TeleCommunication Systems Inc. TeleCommunication Systems, Inc. intents to commence an offering, subject to market conditions and other factors, of $90 million aggregate principal amount of convertible senior notes. The company plans to use a portion of the net proceeds of the offering to pay for the cost of the convertible note hedge transactions. The company will use the balance of the net proceeds of the offering for general corporate purposes, including working capital. In addition, the company may use the remaining net proceeds for investment in or acquisition of businesses, products and technologies that are complementary to its business.

TeleCommunication Systems Inc. said that the company will consider accretive acquisitions. Tom Brandt, SVP and CFO of TeleCommunication, said: “To consider accretive acquisitions that will result in some consolidation of the communication technology spaces where we are strong, we will update guidance data if we're added to the company through acquisitions.”

Tencent Holdings Ltd. The President of Tencent Holdings Ltd., Chi-ping Lau said that the company will accelerate the pace of its merger and acquisitions and may conduct direct investment and joint investment to expand overseas. Lau noted that Tencent will keep scouting for potential foreign M&A opportunities and has already opened representative offices in Vietnam, India, South Korea, and the U.S. Tencent would like to seize opportunities in the global financial meltdown and partner with other companies in related fields that has great potential, said Lau. However, Tencent will not lower its criteria for potential M&A deals at a time when more and more M&A opportunities are being thrown up because of the global financial crisis. The firm will examine the feasibility of the deals by evaluating its own technology, talent and business performance, according to Lau.

Tencent Holdings Ltd plans to list in China after regulators modify current rules. Ma Huateng, Tencent’s Executive stated that at end- March the company had a war chest of about $877 million in cash, which it could use for acquisitions. He said: "The Company is retaining the cash for mergers and acquisitions. We've been doing some small scale acquisitions, with some investing directly and others in cooperation with private equity. We will seek opportunities in China and Asia, with a focus on handset applications and online game development and other technology projects."

Liu Zhiping, President of Tencent Holdings Ltd. said during a conference call with investors following the release of the company's 2008 financial report on March 18, that the economic climate provides good opportunities for making acquisitions. He added that Tencent intends to buy an Asia-based game developer in 2009. Tencent's net profit totaled CNY 869.1 million for the forth quarter of 2008, up 17.9% quarter-on-quarter.

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries The Knot, Inc. The Knot, Inc. reported financial results for its third quarter and nine months ended September 30, 2009 with net revenue of $28.2 million. The Company’s balance sheet reflects cash and cash equivalents of $82.9 million and short-term investments of $46.0 million. Chief Financial Officer of the company, John Mueller said: "We plan to use our cash to make acquisitions as opportunities arise and strategic investments in product development to leverage our brands and technology and continue growing the Company over the long term."

The Knot, Inc. plans to make acquisitions. The firm reported financial results for its second quarter and six months ended June 30, 2009. The Knot reported net revenues of $29.5 million compared with net revenues of $28.7 million for the second quarter of 2008, an increase of 3%. Revenue from national and local online advertising programs increased 6% over the prior year's second quarter driven by a 7% increase in local online advertising revenue. Operating income for the second quarter of 2009 was $3.1 million, an increase of 10% compared to operating income of $2.8 million for the second quarter of 2008 driven by revenue growth and tighter control over operating expenses, which were unchanged year-over-year. John Mueller, Chief Financial Officer of the firm said, “We grew revenue primarily through online advertising and the acquisition of an e-commerce company that we completed in May. This revenue growth and decreases in legal, travel and entertainment, and bad debt expense have generated a 10% increase in operating income over last year's quarter. We will continue to focus on opportunistic acquisitions and discretionary expense control in

TOTVS S.A. Totvs SA, which may look at acquisitions opportunities in order to beat its revenue growth forecast this year. Jose Rogerio Luiz, Totvs’s vice president of finance stated that the company expects to maintain 19% revenue growth in 2009 and “has the means to continue this growth in a consistent manner. We see consistent organic growth, and acquisitions just boost this growth process.” He added that the company may consider increasing financing from Brazil’s national development bank for “transformative” acquisitions. Totvs had received a BRL 204.5 million loan from BNDES in 2009. Jose Rogerio Luiz said that the company “will make use of BNDES if we see an acquisition that makes sense in terms of accelerating growth.” Totvs’s shares rose by 0.5%.

TOTVS SA intends to expand its franchising program in Mexico, Argentina, Colombia, Uruguay, Paraguay and Venezuela this year. The company is also looking for acquisition opportunities. TOTVS' executive VP, José Rogério Luiz stated that the company has been recording consistent organic growth, in order to complete its offering "sometimes we have to add other abilities in terms of skills or new software. So Totvs is looking at bring within its umbrella companies that can help us expand our own capabilities." He stated that the company will be involved in more acquisitions in the next 12-18 months.

Trend Micro Inc. Eva Chen, CEO of Trend Micro Inc. said, “We actually just - at the beginning of the year we acquire a company from Canada, Ottawa, and they specialize in hardening and protecting the servers on the Internet cloud. So we are announcing that product called Thief (ph) Security to protect the servers in the Internet cloud. So we are taking that security to protection for the cloud. So any technology or good company that feeds into that direction, we will consider those.”

Trend Micro Inc. plans to make acquisitions. Eva Chen, CEO of the firm said that it is considering acquiring technology firms related to data centers to grow its business. She noted that the firm would not make acquisitions just for the sake of market share. She said, “When we come upon a small company with new innovative technology, we have to see if the technology has been successful around the world. It has to be workable, and should complement our solutions.” She also said, “It will provide new opportunities for us; hence, Asia-Pacific will be our biggest growth potential as not only are they shifting their business, they will also be looking for added security.”

UFIDA Software Co. Ltd. UFIDA Software Co. Ltd. plans to speed up Mergers and Acquisitions (M&A). Wang Wenjing, chairman and president of the firm said that UFIDA Software sets an aim to edge into the top three global management software providers list in five years. He added that the firm spent around CNY 500 million on M&A in 2008. He also said that more money will be set aside in 2010. Mr. Wang said, “This time, UFIDA Software is poised to stand toe-to-toe with global big names like SAP AG and Oracle Corporation at its 20th anniversary in 2012.” To achieve the target, the fimr is about to hire more than 1,000 talents in the second half of 2009. He also said, “UFIDA Software will capitalize on the industry recession to strengthen investment in R&D, M&A, and fast-growing operations, as the local management software developers appear to gain their ground after the global financial crisis takes its toll on the global software industry.”

UFIDA Software Co. Ltd. seeks to grow. The company’s profit in the last year increased 20.7% to $68.54 million. It said that it will be on the look out for merger and acquisition opportunities this year and will continue to expand its software park.

VeriSign Inc. VeriSign Inc expects to report double-digit revenue growth in 2011. The company stated it will not look at big acquisitions in 2010. However the company may do some small acquisitions. Chief Executive of the company, Mark McLaughlin said: "When I look into 2010, I don't see any big acquisition on the horizon for VeriSign. We might do some small deals in order to accelerate our product roadmap, but nothing transformational." VeriSign Inc may make small acquisitions. James Bidzos, founder and interim CEO of VeriSign stated that the company has $1.29 billion in cash. He stated that VeriSign would consider making share buybacks with the cash in the future and might also make small acquisitions. Possible acquisitions would be the result of a "buy versus make" decision, he said. James Bidzos said: "We're not looking to grow revenue through acquisitions. Small acquisitions will be used to buy technology rather than make it."

Vocus Inc. Rick Rudman, CEO of Vocus Inc. said, “I think as we look at those various options, we have always felt that acquisitions would be the best use of our cash, to the extent that we can find obviously, acquisitions that are appealing to us." He added, “Generally as we have looked out at acquisitions, we have really been focused on three things, geographic expansion, so finding a company that fits once again into our strategy that's in geography that we want to be in. And we have talked about what those geographies are, generally the larger economies in the world. Secondly, you'd call it a consolidation. That would be buying a company that maybe has one of the products that we have that is a subset of what we do, essentially where we are buying a customer base and rolling that into what we do. And then the third area would be a new module of some kind, similar to when we bought PRWeb. So those are really the three types of acquisition opportunities that we are looking for, and generally speaking I guess we will never say never, but generally speaking, we would expect these acquisitions to be accretive immediately or shortly thereafter.”

Vocus Inc. seeks to grow with the help of acquisitions. With regard to firm’s future plans, Vocus said, “We intend to identify and acquire companies which would either expand our solution's functionality, provide access to new customers or markets, or both.”

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APPENDIX H: SELECT 2009 CORPORATE ANNOUNCEMENTS - SEEKING SOFTWARE ACQUISITIONS (CONT’D) Company Announcements Summaries Wayside Technology Group, Inc. Simon Nynens, Chairman, President and CEO of Wayside Technology Group, Inc. said, “The cash position enables us to handle large finance deals, ensure that we have sufficient cash, cash on hand for the quarterly dividends, and also enables us to consider acquisitions should we find a good company that is well-managed yet has distressed ownership.”

Wayside Technology Group, Inc. plans to make acquisitions. Simon Nynens, CEO of the firm said, “The current dividend yield is approximately 8.4%. Our company's balance sheet is exceptionally strong with the ability to pursue acquisitions. The current economic environment could provide a good pipeline of acquisition opportunities. We support our stock, and despite the current market conditions, we are excited about our long-term future.”

WebMediaBrands Inc WebMediaBrands Inc is actively looking for acquisition opportunities. The company is also making investments in organic activities. WebMediaBrands may announce an acquisition by early to mid December 2009.

WebMediaBrands Inc said that the company is looking for acquisition opportunities. Alan Meckler, President, Chairman and CEO of WebMediaBrands said: “Additionally, we will be seeking appropriate acquisitions of services that could be sold to our readers and/or to be communities that can gain and grow by being able to offer our job board, freelance marketplace online courses and trade shows.”

WebMediaBrands Inc recently held its earnings conference call. The company officials talked about the company’s business and future plans. When asked about acquisitions, Alan Meckler, WebMediaBrands’ Chairman and CEO said, “While we are certainly pressing ahead with our organic efforts, we are always looking for appropriate acquisitions and believe that there are attractive properties available that will nicely fit into our model at reasonable valuations. Our recent April acquisition of the Brandsoftheworld.com is already brewing good ad sales results. The massive traffic from this site also aids us by providing a wonderful arena to advertise our new Freelance Connect service, our job boards, our events, and our online education offerings.”

Yahoo! Inc. Ari Balogh, Chief Technology Officer of Yahoo! Inc. said that the firm is looking to buy companies that will allow it to become a bigger player in social networking sector. He said, “It's a good time to be buying now.” He noted that the valuations have come down from what they were six to nine months ago. He added that Yahoo had conversations with companies about partnerships and "more interesting" possibilities. He also said, “I can guarantee you there will be some acquisitions, and we will do some stuff in-house.”

Yahoo! Inc. intends to look at acquisitions cautiously. Yahoo's chief financial officer, Blake Jorgensen recently said at a Goldman Sachs investor, "At that point, the economy truly tightened dramatically and, most importantly, the access to credit had almost disappeared; we made a decision along with our board to be very careful with our cash." Yahoo may be careful, but it is looking for cheap acquisitions. "We do a great job of managing the cash, and our view was that this is going to be very powerful to us, particularly in a world where there are quite a few assets out there trading at very low prices," Jorgensen said at the conference.

Zensar Technologies Ltd. Zensar Technologies Ltd., which is looking to generate INR 2 billion from its domestic business this financial year, plans to spend INR 1 billion on acquisitions. Vice-Chairman and CEO of Zensar Technologies, Ganesh Natarajan, said: “We are also looking at spending INR 1 billion into acquisitions that would help us double our revenues. We are looking at companies in the knowledge process outsourcing (KPO) and remote infrastructure space, with a turnover of around INR 1 billion.”

Zensar Technologies Ltd. plans to make acquisitions. The firm reported a 20% jump in its first quarter net profit to INR 2.35 billion, largely due to an increase in operational efficiencies. Its consolidated net profit grew 20.2% to INR 2.97 billion, while consolidated revenues grew 9% to INR 2.292 billion. Harsh Goenka, chairman of the firm said that the company is scouting for acquisitions within the next year and is targeting companies with revenues of INR 750 million – INR 1250 million. He added, “It's a good time to acquire companies, and one of the decisions that we have taken is to look at some global acquisitions in our chosen areas.” Zensar is keen to acquire companies in infrastructure management and data centre outsourcing space. Ganesh Natarajan, managing director of the firm said, “We have a healthy pipeline in excess of $30 million for the next quarter...and if we bag these deals, we'll cover most of our budget for the next year.”

Zensar Technologies Ltd. has big plans for its business process outsourcing (BPO) business. RPG Group Chairman, Harsh Goenka said, "We plan to get into the hi-end of the BPO business." The RPG chief said that following the global meltdown, we are not actively hunting for acquisitions. "However, if a good opportunity presents itself, we will definitely look at it," he added.

Zylog Systems Ltd. Zylog Systems Ltd. announced on January 4, 2010 that the company would be considering an acquisition of a company in Canada. Decision on the acquisition will be taken by the board in a meeting scheduled on January 9, 2010.

Zylog Systems Ltd. is looking at acquisitions to accelerate its growth process. Chairman and CEO Sudarshan Venkatraman said in an interview with Economic Times that the company was looking for more acquisitions in the US and Asia-Pacific. “We are looking at acquisition targets in the US and the Asia-Pacific as a way to get the US government business. We will also take the products and solutions of companies acquired by us to other governments and other countries,” he said. The company is looking to make a couple of more acquisitions in the e-governance services and solutions space to acquire newer customers and provide cross-selling opportunities. He added, “We will continue to be on the look out for newer markets, verticals and solutions. Diversification in Wi-Fi market will ensure strong foothold in the ever-growing telecom industry in India.”

Zylog Systems Ltd. plans to acquire two overseas companies by the end of 2009. Mr. Ramanujam Sesharathnam, Managing Director and Chief Operating Officer of Zylog Systems said that the company was in talks with a couple of companies with revenues of less than $10 million in the e-governance and managed governance sector.

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